The Casino shell game

Hopes of school districts hitting the proverbial jackpot are set to take a significant hit if analysis conducted by the Cincinnati inquirer prove accurate.

“This is all a big shell game,” said Warren County Administrator David Gully. “We’re not really getting anything. All the new money we’re getting is going to be offset by cuts in the Local Government Fund.”

Gully was referring to state budget cuts through mid-2013 that severely slashed funding to counties and local communities in order to close an $8 billion budget gap.
Tax projections also depend on whether slot machines open at Ohio’s seven racetracks. Local governments can count on a 27 percent reduction in projected tax proceeds if that occurs because “racinos” are expected to dip into casino profits. The low end of The Enquirer’s analysis includes that scenario.

That scenario is now certain, with the Governor signing SB386 which will allow racetracks to offer slot machines. Ohio schools are likely to received just 39% of what was promised in 2009, which wasn't big money to begin with. In 2009 projections were that $327,441,791 would flow from casino to local tax juridistions, but now just $130,452,323 is expected, a massive drop of $196,989,468

School officials are skeptical about how much money they’ll receive and what it will mean to their budgets.

Consultants have told school districts to expect $21 per student for 2012 and up to $80 per student when all casinos are open.

“It’s not big money, although it sounds like a lot to the average Joe,” said Randall Bertram, treasurer at Northwest Local Schools, the second-largest school district in Hamilton County with about 9,000 students.

Northwest, which is laying off 56 people on Aug. 1, including 21 teachers to trim $3 million from the payroll, is hoping to get about $1 million a year in tax revenue from the casinos. That’s still only 1.25 percent of an $80 million general fund budget in a district that axed $16 million from its spending since 2005, Bertram said.

The further fear, which materialized with the lottery revenues, is that casino revenues will further supplant state funding

“It took one or two biennium budgets and it’s in the same bucket of money as everything else,” Bertram said of lottery proceeds. “We don’t know how long this is going to last. It’s almost like stimulus money. You hope you get it, and you hope you can do good with it. You don’t rely on it.”

Here's a district by district breakdown of expected revenues.

Casino Revenue Analysis