- Maryland casinos won $145.23 million in April of 2019, but $0 last month, as all six gaming properties were closed by COVID-19. MGM National Harbor and the five other Maryland casinos remain.
- Maryland’s casinos brought in more than $542 million to fund the education trust fund in the fiscal year 2019. That’s an all-time high. The proceeds for the education trust fund, known as the lockbox, increased $46 million compared to the last fiscal year, according to the state’s lottery and gaming agency’s annual report released Monday.
Maryland Casino Revenue Education
The highly controversial Baltimore Sun has an article by Luke Broadwater and Erica Green pushing teacher union talking points in an attempt to undermine Governor Larry Hogan. They suggest our schools are not receiving a promised expansion in revenues from Maryland casinos. The article is filled with fuzzy math and completely misleads the readers on education funding and casino revenues.
There are many things wrong with their central argument:
Maryland lawmakers gave final approval Friday night to a measure that would allow voters to decide whether all of the state’s casino money should be spent on K-12 public education.
In the seven years since the first of Maryland’s six casinos opened, they have pumped $1.7 billion into the state’s Education Trust Fund — the financial windfall that advocates for gambling promised would go to the state’s public schools. But over that time, state funding for public schools has increased by less than half that amount — and some jurisdictions, including Baltimore, have suffered funding cuts.
The numbers are not based on reality. Instead, the state has increased education spending by over $127 million on top of all revenue brought in by the Maryland casinos.
Operating Budget analysis on the Maryland General Assembly website provide the following information on state spending (figures in millions, based on fiscal year spending):
FY 10 actual education spending $5,230.619
FY 11 actual education spending $4,876.168 (change -354.451)
FY 12 actual education spending $5,595.815 (change 719.647, total 365.196)
FY 13 actual education spending $5,447.325 (change -148.490, total 216.706)
FY 14 actual education spending $5,581.049 (change 133.724, total 350.430)
FY 15 actual education spending $5,751.551 (change 170.502, total 520.932)
FY 16 projected ed spending $5,818.305 (change 66.754, total 587.686)
FY 17 projected ed spending $5,905.108 (change 86.803, total 674.489)
There are no exact figures for FY 16 because the current budget analysis has not yet been released. FY 17 will be a projected until the year has finished and all changes can be accounted for.
During Governor Hogan’s administration, education revenues have increased by $153.557 million.
Here are the Education Trust Fund Revenue numbers:
Between Fiscal Years 2012 and 2013, revenues increased by just under $200 million. Between Fiscal Years 2013 and 2014, revenues increased by less than $50 million. Between Fiscal Years 2014 and 2015, revenues increased by roughly $60 million. They were flat between Fiscal Years 2015 and 2016.
The various increases in casino revenue represent the amount of money brought in by the casinos. Revenue, as a whole, is flat. The only increases in revenue were based on an expansion of gambling: opening of a new casino, adding table games, and other changes.
In FY 2012, education spending was increased by $719 million when casino revenues were expected to bring in over $200 million. However, FY 2013 education spending was decreased by $148 million because the casinos actually only brought in $100 million and other revenue was down. Discounting that, only the loss of $48 million can be attributed at this point.
Ultimately, casino revenue shows up in the next budget. In FY 2014, education then increased by $133 million as casino revenue increased $190 million. That is a difference of $57 million, or a total of $105 million money from casinos possibly diverted from education spending.
By FY 2015, education spending increased by $170 million as casino revenue increased by $30 million. That is a $140 million difference, which means that education money increased by the $105 million not previously spent and another $35 million from other funds.
This change becomes greater in FY 2016 with a $66 million increase in spending and a $60 million increase in casino revenues. This means that $41 million were being taken from other funds. By FY 2017, the education spending increased by $86 million with no revenue increase, representing a $127 million increase in education spending from other funds.
Taken in a different way, Broadwater claims that Education Trust Fund Revenue has increased $1.75B since 2010. Taken together, the total education spending increase is $2.358B (each year subtracted by 2010’s figure then added together). Based on that calculation, education spending has increased by $600 million above what casinos have brought in.
Taken side by side, education spending has dramatically outpaced the increase in casino based revenues because there is no possibility for expansion once the National Harbor Casino opens unless a 7th location is added. Under Governor Hogan, education spending has increased by $127 million when casino revenues are discounted.
The only reason to make outright false claims about education spending is to put pressure on Governor Hogan to increase his already record education spending. It also allows them to support the possible candidacy of former Delegate Healther Mizeur, who has no reason to be quoted in an article on current spending.
Desmond Smith
Latest posts by Desmond Smith (see all)
- 2019 Legislative Session of the Maryland General Assembly Begins - January 11, 2019
- Maryland Democratic Party Governor Candidate Melts Down - August 8, 2018
- Explainer: Who Controls the Baltimore City School Board - January 14, 2018
Related Articles
Less than a year after Maryland voters overwhelmingly passed “Question 1: The Gambling Revenue Dedicated to Education Lockbox Amendment,” Baltimore politicians are proposing to divert money from it to pay for the reconstruction of the Pimlico Racetrack.
Maryland Casino Money For Education
The plan is part of an agreement to give still more public money to the owners of Pimlico for facilities renovation. The arrangement is intended to keep the Preakness Stakes at the northwest Baltimore track. Yet, from 2010 through 2018, Maryland’s horse racing industry, including breeders and the harness racing tracks, have already received $415 million in state financial support. Of that about $66 million has gone to racetrack facilities.
According to the Baltimore Sun: “Crucial to the plan is convincing lawmakers to extend the life of a subsidy for the tracks called the “Racetrack Facilities Renewal Account.” The state’s casinos each pay a certain percentage of their slot machine profits into the fund, which is used for upgrades at the tracks.
Trending: Red Maryland Candidate Survey: Dalbin Osorio for Montgomery County Board of Education
“Backers of this new Pimlico and Laurel proposal want to use that money to help pay off $348 million worth of bonds, to be issued by the stadium authority, that would finance most of the $375.5 million redevelopment. But casinos are only required to pay the money for 16 years after they open. So, the racetrack renewal money will start running out in 2026 and be gone after 2032. For the plan to work, lawmakers would have to change state law to extend the payments from casinos to cover the 30-year payback of the bonds.”[i]
Buried in this description is the bottom line. Extending the length of time payments are made to pay for racetrack facilities comes with a cost to education. Payments that would have begun flowing to education as soon as 2026 will instead be earmarked to continue subsidizing racing through at least 2050.
A Baltimore Sun editorial let its boosterism get the better of it by brazenly misrepresenting the proposed deal. The paper ignored that money will come at the expense of the “lockbox” for education.[ii] At a minimum, this means that a further $119 million will now be diverted from Maryland education to support horse racing.
Do not let their attempted sleight of hand surprise or fool you. They already warned us.
Last year, during the consideration of the “Casino Lock Box for Education” referendum, a skeptical Baltimore Sun editorial explained how easily the “Lock Box” could be breached, commenting: “We hate to break it to you, Maryland, but you’re being taken for a ride again.”[iii]
Truer words are rarely spoken by the Sun.