Casino operators want voters to think Amendment 50 will be boon to education - Colorado Politics

Casino operators want voters to think Amendment 50 will be boon to education

Author: - September 19, 2008 - Updated: September 19, 2008


Casino operators are going to spend whatever is necessary to cram their Amendment 50 down the throats of Colorado voters.

Why? It will allow casino gambling 24 hours every day with bets 20 times greater than now permitted.

This will increase the value of their Colorado real estate, their own annual salaries, provide higher dividends for shareholders, gain better control over who oversees their operations and hide their good fortune behind an easy touch: Colorado community, local district and junior colleges.

Community colleges have been part of our education system for 41 years, and Amendment 50 would add 78 percent of a second tier of new tax revenue that the state would receive from casinos to “help” the colleges.

That money, however, would not necessarily increase the budget for the colleges. Their budgets are determined by the Joint Budget Committee, which will have the option of substituting the new income for funds that otherwise would have come out of the state’s general revenue fund.

The new first-tier money would go to the gaming commission and other administrative agencies and also would increase income to other entities on the receiving end of casino money, including the general revenue fund and the Colorado Historical Society.

According to the 2008-2009 state budget (2008 session laws, page 2822) the community college appropriation would be $293 million (in round numbers), divided between:

(1) $149 million from the student share of tuition and academic and facility fees, and

(2) $144 million from student stipend payments, the College Opportunity Fund Program fee-for-service contracts and college-level curriculum development.

The local district junior college general fund appropriation is $16 million.

The Legislative Council research staff on Amendment 50 assumes $100 maximum bets over a five-year period would result in $300 million in additional tax revenue at a 20 percent tax level. That money comes from $1.5 billion in additional net taxable casino revenue, or “profits.”

Of the $300 million, the research team estimates community colleges and junior district colleges would receive $227 million, averaging about $45 million per year.

That sounds like a lot of money that — according to the constitutional amendment — would “supplement existing state funds for student financial aid programs and classroom instruction programs.”

“To supplement existing state funds.” In the Concise English and Oxford Illustrated Dictionaries it means “an addition supplying deficiencies.” “Existing,” means “actual or current.”

The Legislature is not required to provide a separate budget sum greater than the preceding year’s with casino tax revenues added to make it an even greater sum.

To do that would have required language similar to Article 9, Section 17 (1) on education, stating in Amendment 50 something like “the state funding for community colleges shall grow annually at least by the rate of funds received under Amendment 50 adopted by the electors in November 2008.”

The Legislature has the authority under our constitution to create a deficiency for community colleges, to be made up from gaming tax funds as a supplement to a thinner, but existing, appropriation.

Now, that’s great for every other recipient of state appropriations (including departments ranging from Agriculture to Treasury) who can, in future years, once the spotlight is turned off, gain all or part of the $227 million. But that is not how Amendment 50 will be sold.

You will hear these sums boasted as being an addition “on top” of the “regular” community college budget. And the community colleges will be climbing over each other to urge passage of Amendment 50.

States that were sold on voting lotteries into law “for education” have seen this technique result in a loss of other state revenues for education that have been replaced by lottery net tax revenues.

On Oct. 7, 2007, the New York Times ran a full-page expose on the failure of additional funding for education through lotteries. One quote is worth repeating:

“Legislators merely substitute general revenue funds with lottery dollars so the schools don’t really gain any additional funding,” said O. Homer Erekson, dean of the business school at the University of Missouri in Kansas City, who co-wrote a national study on lottery money and school financing.

More on Amendment 50 next week.

Jerry Kopel served 22 years in the Colorado House.

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