Gambling at Arapahoe Park racetrack is not a winning solution for education
Author: Claire Levy - August 1, 2014 - Updated: August 1, 2014
Using gaming money for education is hardly a winning solution.
I don’t know where to begin with this article expressing my profound dismay over the prospect of Colorado resorting to gambling to pay for education.
Evidently, the Arapahoe Park racetrack isn’t making as much money as Rhode Island-based Twin River Worldwide Holdings Inc. would like it to make. Profits in their home state are diminishing because Massachusetts is expanding gaming and they need to look elsewhere for revenue. So they are riding the back (pun intended) of Colorado’s tragically underfunded education system in the hope of finding new riches.
So what’s wrong with this? K-12 level education needs more money and Coloradans won’t vote for a tax increase, so isn’t this the perfect solution? Here are just a few problems.
Public education is called “public education” because it is a basic obligation of government. Everyone needs it and everyone benefits from it, regardless of whether they have a child in school. It is the classic example of something that should be paid for by taxes so that everyone shares the cost just as everyone shares the benefit. With gaming, we off-load that obligation to just a few. Those few are often lower income people who would not even have any tax liability. So it becomes a regressive and unfair form of taxation — someone else pays for what all of our kids need.
And how much money will this proposal generate? Will it really “solve” our education funding problem? If Colorado is going to circumvent existing restrictions on gaming, which require the host communities to approve it before the rest of the voters get to weigh in, let’s at least hope it solves the problem. Legislative Council thinks gaming in Arapahoe County could conceivably generate $114,000,000. That’s a large number until you put it in the context of need. Since 2007, per pupil funding for K-12 education has fallen to $1.1 billion less than what would have been required under Amendment 23 to keep pace with inflation and pupil growth. The legislature struggled mightily this session to decrease that amount and found $110,000,000 in one-time money. There is no guarantee of anything close to that amount from the racetrack, though. Schools get whatever a 34 percent tax on adjusted gross proceeds generates. The racetracks would have to bring in over $350,000,000 to even approach making the projected paltry contribution to education.
But really, what’s the harm in trying? Maybe this will be a huge success. And, it will keep the ailing Arapahoe Park racetrack alive. The racetrack only operates 39 days a year. With up to 2500 slot machines, blackjack, poker, roulette and craps 365 days a year, the racetrack would become a full-fledged casino, dwarfing Black Hawk’s largest casino, and occasionally run a few horse races. All it needs is a horseracing license for five years before applying to host a casino. The amount this initiative will generate for education and the inconsequential role of horse racing in this scheme exposes it for what it is: a moneymaker for the racetrack owner.
Why should Black Hawk, Central City and Cripple Creek have a monopoly on gaming? Well, the voters keep rejecting ballot initiatives to expand it to other communities. And, they’ve rejected a proposal similar to this one overwhelmingly. So evidently, the voters don’t want casinos outside these mountain towns. Casino gaming was originally conceived as a way to preserve these mining towns because they were an important part of our heritage. The main beneficiary of limited stakes gaming was historic preservation. Now, community colleges also get a small piece of the pie. When Arapahoe, Pueblo and Mesa Counties get into the act, historic preservation funds, education funding, and funds for other uses from the casino towns will stop flowing.
Gilpin County and Teller County and the gaming towns have experienced huge impacts from gambling. They’ve had to build new jails, upgrade roads, increase water and sewer capacity, add law enforcement officers, expand social services, stop drunk drivers, and on and on. Fortunately, the constitution allocates a portion of the existing gaming revenues to the impacted counties. The proposed initiative doesn’t make similar provisions for Arapahoe, Pueblo and Mesa Counties. They are allowed to impose an impact fee, which existing law already allows any local government to impose to offset the impacts of a development. But unlike existing power, the constitutional amendment requires the fee to be set by negotiation so the racetracks have to agree to the fee! Imagine if we all got to negotiate the amount of our tax liability. This initiative actually takes away powers the counties already have.
It’s a bad idea. It doesn’t solve our funding problems. It buys into the idea that a few people should foot the bill for services we all need. The voters have rejected two tax increases for education but that doesn’t mean we should throw in the towel. The need is too great to resort to the horse track and then walk away from it.
Claire Levy, executive director of the Colorado Center on Law and Policy, represented HD13 in the legislature from 2007 through 2013 and most recently served as the vice-chair of the Joint Budget Committee and chair of the House Committee on Appropriations.