McIntosh, Conway will push amendment putting Maryland casino revenue in 'lockbox' for education

Two leading General Assembly Democrats plan to introduce a constitutional amendment that would put the state’s share of revenue from its casino gambling industry in a “lockbox” for public schools.

Del. Maggie McIntosh, who chairs the powerful House Appropriations Committee, said the amendment would ensure that gambling taxes are not used to finance the state’s K-12 educational funding formula but to enhance it. The Senate co-sponsor, Sen. Joan Carter Conway, noted that education is the only spending priority required in the Maryland Constitution.

McIntosh said in an interview Friday that the proposal would help keep a promise made to voters when they approved casino gambling in Maryland in 2008 and expanded it in 2012 — that the state’s share of the revenue would go largely to improve education.

“Voters believed that money was safe, that it could not . . . be raided,” McIntosh said. “The public really feels they were gamed in this.”

In fact, nothing in the legislation passed by the Democrat-dominated legislature with the support of then-Gov. Martin O’Malley required that school spending rise along with the growth in gambling revenue.

Local education aid in recent years has been nearly flat even as Maryland’s six casinos have prospered. Money from gambling taxes has flowed into the Education Trust Fund — but from there into the general fund. The casino revenue in effect has made it easier to maintain education spending required by state law, but the money has not led to increased per-pupil funding for schools.

When Baltimore schools were slated for cuts in state aid a year ago because of declining enrollment, McIntosh said, she received complaints from city residents.

“I started hearing constituents saying, ‘What has happened to the gaming money?’ ” she said.

McIntosh said the legislation would put the amendment on the 2018 ballot for voters to decide.

Conway, a Baltimore Democrat, chairs the Senate committee that deals with education issues and is a strong ally of Senate President Thomas V. Mike Miller. McIntosh is closely aligned with House Speaker Michael E. Busch. McIntosh said she hopes the two top Democratic leaders will include the proposal in their legislative agenda for the 90-day session that begins Jan. 10.

Busch, an Anne Arundel County Democrat, called McIntosh’s proposal “an idea we should explore” but wouldn’t commit to backing it. He pointed to the challenges Maryland faces in adjusting to the new federal tax bill signed by President Donald J. Trump Friday and possible cuts to health care programs.

“You got to have money to fund the other programs,” Busch said.

Miller said through a spokesman that “we’re open to the issue and look forward to the discussion of its merits this session.”

McIntosh said she also hopes to win the support of Republican Gov. Larry Hogan, who has been outspoken about his opposition to diverting money from funds set up for specific purposes into the big pot of money known as the general fund.

Hogan spokesman Doug Mayer said the governor doesn’t normally take positions on pending legislation early in the process, but said his boss will be paying close attention to the effort.

“Overall, the administration is eager to see the details and will certainly give this all due consideration,” Mayer said. “We look forward to discussing it with Delegate McIntosh.”

However, Senate Republican Leader J. B. Jennings said he questions why McIntosh and Conway are proposing the idea.

“Governor Hogan has funded [education] at historic levels his entire three years in office,” said Jennings, who represents Baltimore and Harford counties. “I don’t see the necessity.”

Aid to local governments for K-12 education, allocated according to a formula, is one of the largest components of Maryland’s $43 billion annual budget. In the current budget, Maryland is spending nearly $6.4 billion for that purpose.

Maryland casinos generated $1.4 billion in revenue during the budget year that ended June 30. Of that, the casinos kept $814 million and paid the rest in taxes. The biggest beneficiary of those taxes was the Maryland Education Trust Fund with $451 million. Smaller portions of money are dedicated to such purposes as support for the horse racing industry, neighborhood improvement in Park Heights, aid to local governments and treating gambling addiction.

McIntosh said her proposal would not affect the money set aside for purposes other than education. She said the amendment would call for a long phase-in period so the state could make budget adjustments.

Conway said the proposal would leave to the governor the question of which other programs to cut.

“We don’t want education to be secondary,” she said.

Benjamin Orr, executive director of the Maryland Center on Economic Policy, said McIntosh’s idea “has potential” but that he need to see the details. He said a commission headed by former University of Maryland Chancellor William E. “Brit” Kirwan is likely to recommend that the state raise an additional $2 billion or more to pay for public schools.

McIntosh declined to connect the two issues.

“I would never characterize this as a silver bullet to fund Kirwan,” she said. “We’re not talking about that much money.”

An earlier version misstated the amount of revenue the casinos kept during the budget year that ended June 30. The Sun regrets the error.

mdresser@baltsun.com

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