Casino revenue likely to address state budget gap/'raiding' designated funds not uncommon

OXFORD HILLS —  Around $14 million in casino revenue intended to supplement K-12 education will probably be used to help close a $112 million gap in the 2013 state budget.

According to local legislators, "raiding" designated funds, although unpopular, is a budgeting reality.

In 2010, voters approved the Oxford Casino in a referendum that pledged 46 percent of net revenue from slot machines and 16 percent of table game net revenue to state programs.

Twenty-five percent of the slot machine portion and 16 percent from table games was earmarked to supplement K-12 education funding.

According to Department of Education spokesperson David Connerty-Marin, because the casino didn't open until the state budget for 2013 was finalized, the revenue was never applied to a particular fund.

Now that money will be devoted to the state's General Fund to overcome a budget gap primarily caused by a revenue shortfall and higher-than-expected MaineCare spending.

"For the purpose of the supplemental budget ... there was a need to use that for the general fund," Connerty-Marin said.

By utilizing the casino funds, the state is able to prevent further cuts to state aid to schools that could come from spending curtailment, Connerty-Marin claimed. 

In December, Governor Paul LePage ordered a $35 million curtailment order to deal with state revenue shortfalls, which is now part of the 2013 supplemental budget. Around $12.58 million of the curtailment came from general purpose aid to school districts.

According to Rep. Tom Winsor (R-Norway), a member of the Legislature's Appropriations and Financial Affairs Committee, committing the casino revenues to offset the revenue shortfall is likely.

On Monday, Winsor said the committee had unanimously approved 60 or 70 percent of the items in the supplemental budget and should have final recommendations by Friday or Saturday.

The supplemental budget still needs to pass through the legislature, but Winsor estimated the measure would be included.

He acknowledged that reallocating the the money was "a shell game," but said he wasn't concerned the move set a bad precedent, noting that "raiding" dedicated funds isn't uncommon.

"It's budgeting reality," Winsor said, recalling that the Fund for Healthy Maine, which receives money from settlements with big tobacco companies, has regularly been tapped by the state since it was established in 1999. 

Senator Jim Hamper (R-Oxford), whose district covers Oxford Hills, said school districts shouldn't feel the pinch if the funds are appropriated.

Budget realities often conflict with how funds are initially dedicated, Hamper said. Dedicated funds were regularly used for different budget items.

"Is it [casino revenue] any more sacred than any of the other designated funds that we have? No. Unfortunately, that's the budget process," Hamper said.

"I would love to say every designated pot of money was never going to be touched other than for the purpose for which it was intended, but that's not the way it happens."

Connerty-Marin said the governor's proposed 2014-2015 biennial budget maintained the casino revenue's dedication to education, but couldn't anticipate how the legislature might alter the proposal.

Oxford Casino spokesperson Scott Smith, on Monday, would say only that Oxford Casino was proud of the way the 2010 casino bill was written and where the state's portion of revenue was intended to go, but respected the legislative process.