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.”