The 2017 Amy Poehler/Will Ferrell movie “The House” pretty well encapsulates what happened with Maryland casino money and education funding. The actors play Kate and Scott Johansen, whose daughter Alex has her heart set on going to the same college they did, Bucknell. They can’t afford it, and various reasonable efforts to find the money (scholarships, finding Kate a job, asking Scott’s boss for a raise) don’t pan out. So, instead, they wind up opening an underground casino in a friend’s house to make money for the tuition.
Absent a few zany plot twists involving a severed finger and an accidental house fire, that’s pretty much what happened here. Back in 2002, Maryland leaders approved a big increase in spending on education that they had no way of paying for, and when the bills came due, they decided to open up a casino (five, actually, then later a sixth) to get the money. (The passed a bunch of tax increases, too.)
Did the Johansens use their casino to provide more or better education for their daughter than they had promised all along? No. Actually, you could argue that it just allowed them to keep making mortgage payments and buying groceries while Scott used his salary to send Alex to college. Likewise, Maryland leaders did not and never intended to provide more or better education than they had already promised as a result of the casino funding. It merely allowed them to keep paying for health care, environmental protection, public safety and all the other things state government does while meeting their legal obligations to fund the schools.
There’s nothing inherently wrong with that. Money is fungible for the state of Maryland, just like it is for the Johansens. It’s just that when Maryland lawmakers put the question of casinos on the ballot in 2008 (and again for a casino expansion in 2012), it is distinctly not the impression they gave to voters. In their public statements, and especially in the massive advertising campaigns casino interests funded, the pitch was slots for tots, not slots to meet general government operations.
Technically, it is true that gambling money — approaching a half-billion dollars a year now — goes into an Education Trust Fund and is spent on education. But that’s nowhere close to how much the state spends on schools under its legally required funding formulas (about $6.6 billion this fiscal year). So what the Education Trust Fund has really done is to allow the state to dedicate less of its other tax revenues to schools, thus giving it more to spend on other things.
Now Maryland’s leaders are acting like they’ve gotten religion on the idea that casino money should be used the way a lot of voters thought it was all along — to provide more funding for schools than they would have anyway. They put a constitutional amendment on the ballot, Question 1, to create a “lockbox” for casino revenues, and they’re fighting over who should get the credit (Democrats or Gov. Larry Hogan) for what must be a wildly popular idea.
We hate to break it to you, Maryland, but you’re being taken for a ride again. And that’s not altogether a bad thing. Let us explain.
The text of the ballot question says the amendment would require the governor to use casino money for supplemental education funding “in an amount above the level of State funding for education in public schools provided by the Bridge to Excellence in Public Schools Act of 2002 (otherwise known as the Thornton legislation)” with a phase-in period over the next four years.
Pretty straightforward, right?
No. Here’s the thing: Maryland is in the midst of a re-evaluation of the Thornton formulas through the work of a new education commission chaired by former University System of Maryland chancellor William E. “Brit” Kirwan. Unfortunately, the Kirwan commission has not yet finalized its recommendations or put a price tag on them, but it’s a safe bet they’ll run into the billions per year of additional spending on schools. Figuring out how to act on (and pay for) the Kirwan Commission’s recommendations is going to be the preeminent topic for the next governor and General Assembly, and by the time Question 1 fully phases in, the Thornton formulas will no longer apply. Governor Hogan knows it. His Democratic opponent, Ben Jealous, knows it. The leaders of the General Assembly know it. If the voters don’t? Oh well.
Here’s the thing: The sneaky terms of this amendment are actually what make it a reasonable and responsible thing to do. We should be deciding how much to spend on our schools not based on how much people gamble but on what it costs to provide Maryland students a world-class education. The new Kirwan formulas should give us that answer, and the lockbox amendment would force the state to start setting aside more money to pay for it. We’ll almost certainly need to find more money when Kirwan is fully phased in than the lockbox will force us to provide, but it’s a start. Kind of like if the Johansens had started saving for Alex’s college education before taking her to visit Bucknell.