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.”

Posted by Gary Henery on Dec 19 2012. You can follow any responses to this entry through the RSS Feed. Both comments and pings are currently closed.