Casino revenue windfall an illusion

Tuesday, December 25, 2012

Mazzi: Casino revenue windfall an illusion

By LENNY C. LEPOLA

News Assis­tant Man­ag­ing Editor

Dur­ing a brief con­ver­sa­tion in his office last week, Big Wal­nut Local School Dis­trict Super­in­ten­dent Steve Mazzi and dis­trict trea­surer Feli­cia Drum­mey dis­cussed what Mazzi called the illu­sion that estab­lish­ing casi­nos in Ohio would be a wind­fall for the state’s school districts.

Dur­ing the cam­paign to allow casino gam­bling in Ohio one north­ern Ohio news­pa­per said Ohio schools would “… hit the jack­pot” because of casino rev­enue; and dur­ing the Big Wal­nut school district’s levy cam­paign peo­ple who opposed the levy were ask­ing dis­trict admin­is­tra­tors and board of edu­ca­tion mem­bers what they were going to do with “… all the gam­bling money.”

Mazzi said a month ago he was lis­ten­ing to a talk seg­ment on WNCI where the dis­cus­sion was about how casino rev­enue is help­ing Ohio schools.

“I called in and told them we are receiv­ing $21 per stu­dent in the first dis­burse­ment in Jan­u­ary, times 3,000 stu­dents,” Mazzi said. “That doesn’t even take care of one first-year teacher’s salary and ben­e­fits, so when they say we’ll have all that money com­ing in, it really isn’t enough to do much of anything.

“Even take a place like Olen­tangy with 10,000 stu­dents,” Mazzi con­tin­ued. “You’ve got a lot more stu­dents, sure, but then you look at their expenses and $160 mil­lion bud­get – it’s not going to be a wind­fall for them, either.”

Drum­mey said the county has received casino rev­enue, but dis­burse­ments have not been made to school dis­tricts yet.

“That $21 per stu­dent we should receive in Jan­u­ary is not a guar­an­tee, that’s from an esti­mate of casino gross rev­enue from the state,” Drum­mey said. “Our pay­ment in August of 2013 is esti­mated to go up to $71 per stu­dent, but casino rev­enues are down. In June and Sep­tem­ber the Toledo casino rev­enue was down 9.6 per­cent, and that’s an esti­mate by the Ohio Depart­ment of Taxation.”

Drum­mey did note that the Cleve­land casino rev­enue is up 5 per­cent, but the state fore­casts that total casino rev­enues will be down 1.2 percent.

“But the point is, we haven’t received any­thing yet,” Drum­mey said. “We are antic­i­pat­ing a dis­burse­ment two times a year. In Jan­u­ary if we see $21 per stu­dent, that’s $63,630. If we get an August dis­burse­ment of $71 per stu­dent we’ll receive $278,760, but that’s in the next fis­cal year.

“We have a $28 mil­lion annual bud­get,” Drum­mey con­tin­ued. “We have $2.3 mil­lion a month in finan­cial oblig­a­tions. Even at the higher num­ber, $278,760 spread over six months it only adds a lit­tle over $46,000 to our rev­enue stream each month. I wouldn’t call that a windfall.”

Drum­mey said Mike Sobul, Granville Exempted Schools Trea­surer, who is the retired Sec­tion Chief for Fore­cast­ing and Spe­cial Projects at the Tax Analy­sis Divi­sion of the Ohio Depart­ment of Tax­a­tion where he was respon­si­ble for tax esti­ma­tion, has said to down­grade Big Walnut’s Jan­u­ary esti­mated dis­burse­ment from $21 to $19, and the August dis­burse­ment could be as low as $50 to $55 per student.

Mazzi said com­pli­cat­ing the sit­u­a­tion and mud­dy­ing the prover­bial waters is the State of Ohio’s his­tory of giv­ing one thing and tak­ing some­thing away from another fund­ing source.

“Through­out the cur­rent finan­cial cri­sis the state has been reduc­ing the guar­an­tee, which means our fund­ing from the state is below what we got last year,” Mazzi said. “We got one per­cent less from the state each year in fis­cal 2011 and fis­cal 2012. At the same time the state accel­er­ated the phase-out of the Tan­gi­ble Per­sonal Prop­erty Reim­burse­ment that was sup­posed to be phased out by 2019. Those dol­lars are now gone.”

Drum­mey said the fed­eral stim­u­lus plugged a 6 per­cent gap in the reduc­tion in school fund­ing, but the state failed to fill that gap when the stim­u­lus ended.

“Look­ing back it’s not an under­state­ment to say we went through a per­fect storm,” Drum­mey said. “It’s going to be inter­est­ing to see what the new school fund­ing for­mula looks like. We’ll know in March when the state bien­nial bud­get is released, and it takes effect in July — at least it’s sup­posed to. But last time it wasn’t known until July of ‘09 and we had to start fis­cal 2010 before we knew how much money the school dis­trict would get from the state.”

As the con­ver­sa­tion came full cir­cle Drum­mey and Mazzi began search­ing for ways to put what casino rev­enue would mean to Big Wal­nut in terms that every­one could understand.

Drum­mey said if the dis­trict receives $21 per stu­dent in Jan­u­ary applied to the cur­rent fis­cal year it would rep­re­sent two-tenths of one per­cent of the district’s cur­rent fis­cal year bud­get; if a $71 per stu­dent dis­burse­ment mate­ri­al­izes in August that would rep­re­sent nine-tenths of one per­cent of the next fis­cal year’s budget.

“A school dis­trict bud­get is no dif­fer­ent than a fam­ily bud­get, just big­ger,” Drum­mey said. “Look at it like a per­son mak­ing $52,000 a year would. Under the $71 per stu­dent for­mula the casino rev­enue would give him $468 addi­tional dol­lars per year, or $39 a month, or $9.75 per week. For some­body whose fam­ily bud­get is based on a $52,000 per year income that would not be called a windfall.”

Mazzi said he’s con­stantly hear­ing peo­ple say: “Look at all this money schools are get­ting from casinos”.

“It’s not really all that much, it doesn’t even replace what the state has already taken away from us,” Mazzi said. “It’s an illu­sion, that’s what I call it. The illu­sion is that the state is pro­vid­ing a wind­fall from the lot­tery and casi­nos for schools, and it’s just not the case.”


http://sunburynews.com/2012/12/mazzi-casino-revenue-windfall-illusion/