Ohio officials debate options on casino funds

10/29/2009

COLUMBUS - Voters have yet to weigh in on the issue, but some Ohio senators already are questioning whether the state could use casino money to help patch its leaky budget.

Gov. Ted Strickland's administration countered yesterday that even if voters approve Issue 3 on Tuesday, there's no guarantee that a total of $200 million in one-time licensing fees would arrive in time to help the state dig out of its $851 million budget hole.

While this discussion was taking place in the Statehouse, opponents of Issue 3 rallied outside the Statehouse while a competing rally in favor of the ballot issue was held four miles away.

The Senate Finance Committee has before it a House-passed bill that would delay this year's final 4.2 percent increment of a five-year, 21 percent cut in the personal income tax. That would generate an estimated $844 million.

The hole was created in the state's K-12 education budget last month when the Ohio Supreme Court ruled that the governor and lawmakers could not avoid a voter referendum on a plan to introduce and tax slot machines at the state's seven horse-racing tracks by using the budget to authorize them.

As the Republican-controlled Senate committee explored alternatives to the tax rollback, some discussed supplanting one source of gambling revenue that won't immediately materialize, racetrack slots, with gambling revenue that has yet to materialize, casinos.

Voters will be asked on Tuesday to authorize four Las Vegas-style casinos on specific sites in Toledo, Columbus, Cleveland, and Cincinnati with nearly all of the revenue generated by a 33 percent tax on casino revenue after payouts go to counties, school districts, and larger cities.

One exception would be a one-time, upfront licensing fee of $50 million from each casino that would be paid to the state but earmarked for regional job-training efforts.

"Putting this money into K-12 education could be consistent with what the language in the constitutional amendment is to encourage, economic development," said Sen. Mark Wagoner (R., Ottawa Hills), a committee member. "The intention of the evidence-based model [for education reform in the state budget] was that we're preparing Ohioans for the jobs of the 21st century."

Ohio Budget Director Pari Sabety, however, noted that the proposed constitutional amendment appears to make "explicit linkage" between that money and local job-training efforts.

"My sense is that there are many regional economic development organizations around this state that have a variety of views of what this sentence means about support for their efforts at a local level," she said.

Sen. Dale Miller (D., Cleveland) questioned whether lawmakers could back off on the financial commitment to school districts and local governments in the current budget if Issue 3 passes and starts delivering in terms of tax revenue.

"We don't know, assuming the constitutional amendment is approved by the voters, when the casinos will get built," said state Tax Commissioner Richard Levin. "That's not a decision of the state. … Unlike the [licensing] fees that are up front, casino tax revenues don't begin coming in until the casinos are up and running and there is actually gambling going on in the casinos."

Contact Jim Provance at: jprovance@theblade.com

or 614-221-0496.