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Bill would give entirety of state’s Oxford Casino profits to schools

Posted April 10, 2013, at 2:04 p.m.
John Morrison of Lewiston reacts as the slot machine he is playing racks up points at Oxford Casino in July.
Russ Dillingham | Sun Journal
John Morrison of Lewiston reacts as the slot machine he is playing racks up points at Oxford Casino in July.

AUGUSTA, Maine — If a bill aimed at fixing an imbalance in state funding for public education moves forward at the Legislature, the town of Oxford would be out of luck.

So would Oxford County, dairy farmers, University of Maine students and two of the state’s American Indian tribes.

Under the bill, LD 18, authored by Rep. James Campbell, I-Newfield, instead of divvying up its share of the profits from the Oxford Casino in a so-called cascade of revenue that was approved in a statewide referendum, the state would instead use all the revenue to fund K-12 public education.

Last year that was about $14.8 million.

Because the casino opened in June the revenue for 2012 is based on just seven months of operations.

Campbell said his bill is meant to see the state pay the full 55 percent it’s obligated to under state law. The bill also calls for additional state general fund spending for education.

But for the town of Oxford, which gets 2 percent of the revenue the casino shares with the state, the shift would be “devastating,” Town Manager Michael Chammings told lawmakers on the Legislature’s Education Committee on Monday.

Chammings said his town supports the state funding 55 percent of public education but is opposed to losing its share of the casino revenue, which was about $1.4 million in 2012.

He said that amount is about the same the town needs to cover higher costs of public safety and other services because there’s more traffic to the town because of the casino.

Chammings also noted that the bulk of the state’s Oxford Casino revenues already go toward K-12 education and higher education. He said 46 percent of the casino’s net slot machine revenue goes to the state and 32 percent of the net slot machine revenue is directed to education accounts.

“The bulk of the money from Oxford [Casino] is intended to go to education and that’s where we want it to go,” Chammings said.

The town opposed giving up all the revenue it gets because it has its own investment costs associated with recruiting the casino, developing sewer and water systems to support a possible expansion and related business growth in the town, Chammings said.

Campbell and others told the Legislature’s Education Committee a lot of focus was being paid to what the state owes its 39 hospitals for MaineCare debt — estimated at about $486 million — but little is said about what the state owes its schools.

He charged Gov. Paul LePage and former Gov. John Baldacci with ignoring the state’s obligation in statute to pay 55 percent of the cost of K-12 public education in Maine. LePage’s budget proposal uses the money from casinos for education still, it just doesn’t direct it all to the general purpose aid formula for K-12 public schools.

“The bottom line is they are violating the law,” Campbell said.

He said his bill moves money from special revenue funds currently paid by the casino to cover about $38 million of $183.2 million in new revenue for K-12 public schools in Maine over the next two years.

Campbell said until the state gets to that match amount for its public schools he intends to “fight and fight and fight to stop any other education funding.”

LePage Communication Director Peter Steele said the governor’s office would let the Legislature finish its work on the bill before commenting on it.

Those supporting the measure said the referendum voters passed to allow the Oxford Casino included a portion of funds to go to public schools, but rather than roll them into the school-funding formula LePage’s administration has decided to use them for other purposes.

Lois Kilby-Chesley, a teacher and president of the Maine Education Association, the statewide teachers’ union, said Monday that the MEA supports Campbell’s bill. She said the closest the state ever got to funding 55 percent of public school costs was in 2008 when it financed 53.8 percent.

“But since that time, each year we have fallen further behind,” Kilby-Chelsey said. She said under LePage’s current two-year budget proposal, state funding for K-12 will drop to below 45 percent.

She said the message the Legislature sends when it fails to fund schools at 55 percent is either cut programs, raise property taxes or do both.

“None of these three choices is good for communities, none is good for teachers, none is good for property owners and essentially, none is good for students,” Kilby-Chelsey said.

She said the MEA would also support a state constitutional amendment that would make school funding at 55 percent a constitutional requirement. Another bill before lawmakers would put that question to voters statewide, if approved.

Those in opposition to using all of the state’s Oxford Casino share for public schools said it’s not that they are opposed to the state fully funding its share but that the shift of casino revenue would also have consequences.

“Maine’s dairy farmers are concerned about our children and their ability to get a quality education in this state and following through with the commitment to fully fund education,” Julie Marie Bickford, executive director of the Maine Dairy Industry Association, said. “We are very aware of the impact of state funding or the lack of funding on our local schools and communities.”

She said her industry already pays about $10 million a year in local property taxes and 1 percent of the state’s share of the Oxford Casino revenues currently goes to a dairy farm stabilization fund to create a “safety net” for farms.

That fund can be used by farmers who fall on hard financial times to help them save their farms or get through a difficult period.

While they support the state funding its full share of schools, they worry about the unintended consequences of Campbell’s bill, including what the loss of that revenue would mean for dairy farms, Bickford said.

“We are concerned that LD 18 creates more problems than it solves,” Bickford said. “The money that the Oxford Casino contributes through its cascade of payments to state and local governments and other industries offsets money that would otherwise come directly out of the state’s general fund.”

Campbell and other lawmakers in support of the bill said they intended to use the measure as a means to move the conversation forward on school funding.

Besides Chammings and Bickford, others testifying against the bill were representatives from the Maine Department of Education, the University of Maine System and Oxford County.

The committee will likely vote on the bill in the weeks ahead. If it is approved it would also need to be reviewed and approved by the Legislature’s budget-writing Appropriations Committee, because it includes state general fund spending.

 

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