What Mr. O'Malley specifically objected to is the repeated contention in ads from the No on Question 7 campaign that money from his plan to legalize table games at Maryland's casinos and add a sixth casino in
And, technically, it is true that the vast majority of the state's share of revenue from Maryland's casino gambling program goes into an education trust fund that was established when slots were legalized four years ago. To the extent that ads paid for by
But that's not the whole story. Ads sponsored by MGM and the other interests who want to build a casino in Prince George's County say Question 7 means "millions for Maryland schools, guaranteed." However, to the extent that they imply that approving Question 7 means hundreds of millions more for Maryland schools — and they certainly give that impression — they are nothing more than Las Vegas casino hooey.
Here's why: The level of state spending on education is determined by a variety of state laws, most notably the 2002 Bridge to Excellence Act, better known as the Thornton Law. Neither the original 2007 slots legislation nor the gambling expansion bill passed this year change the formulas that determine how much the state sends to each county or how much each county is required to spend on its schools. The money from gambling does not come in on top of the Thornton-mandated spending. It just allows general tax revenues that would otherwise have been spent on the schools to go somewhere else. Theoretically, the state could use the slots money to increase total education funding, but it has never done so.
What one could say is that the money pouring into the education trust fund — the state is on pace to collect $263 million this year, out of a total schools budget of about $7 billion — has reduced the pressure to make cuts to education in the face of the prolonged economic slowdown and chronic budget shortfalls in Annapolis. But Mr. O'Malley and the General Assembly have resisted making cuts to education, no matter what the state's fiscal situation, so the real impact has likely been to stave off reductions to other programs and to lessen (though not eliminate) the need to raise taxes.
Maryland is not out of the woods yet when it comes to its budget problems. There is a gap of about $500 million between projected state revenues and spending for the foreseeable future, and it might be worth it to expand gambling even if the money isn't really going to improve conditions in Maryland schools — if, that is, the governor and General Assembly had gotten a good deal for the taxpayers.
But they didn't. When Maryland passed its slots program in 2007, lawmakers decided that the state should keep 67 percent of the total proceeds, and the casinos would get 33 percent. The state estimates that approving Question 7 would increase total gambling revenues in the state by about $653 million once the Prince George's casino is fully up and running. Of that, casino owners will get about 75 percent, and the state will get 25 percent.