Casinos Funding Maryland Education

Good news! Casinos had a record breaking fiscal 2018, earning revenues in the billions and contributing nearly $500 million to the Maryland Education Trust Fund (see CBS 8/18). Or is it good news?

Maryland voters were duped into believing that casino revenues would add money to education budgets, but the legislation included no requirement that the funds would be supplemental. So while the education budget received $500 million in funding from casinos, that simply allowed the state to redirect $500 million it otherwise would have had to use for education and use it for other budgetary shortfalls. Casino money does not change funding formulas or the overall pile of money schools receive. So much for the good news story, though as I explain below, lawmakers are working to fix this problem.

But there is more bad news when you consider the economics involved here. First, from whose pockets is this $500 million really flowing? I suspect the clientele of Maryland casinos is more tourist-driven than, say, Midwest riverboat gambling, but a general truth is that lower and middle class people spend more on gambling than the wealthy do. This has been shown about Maryland and other lotteries (Carpenter, Perlman, & Norris, 2010; Wisman, 2006). A 2011 baseline study prior to slot machine expansion (https://bha.health.maryland.gov/POPULATION_BASED BEHAVIORAL HEALTH/Documents/SpecProjsVetsGambling/gambling201_0610.pdf) shows that Marylander gambling frequency (includes lottery and other forms) is negatively correlated with education and income, and that a weekly gambler spends an average of about $550 per month, a multiple of what is spent by less frequent gamblers. So, while specific Maryland casino patron analysis is lacking here, it is reasonable to assume that much of the state’s gambling revenue is coming from lower socioeconomic groups, which then have less money in their pockets to spend on students’ food, care, and educational needs.

Second, who benefits from the $500 million? I argue that the state is making a choice between funding budget shortfalls with casino revenue and funding them by raising revenues from income, sales, and real estate taxes. If this is the trade off, then clearly the wealthy benefit more from this casino-driven funding structure. In essence, casino revenue becomes a wealth redistribution scheme from the poorest to the wealthiest.

The August CBS report fails to mention the constitutional amendment upon which Marylanders will vote next month, supposedly solidifying a transition to casino-based revenues as supplemental education funds “in addition to the state funding provided through the funding formulas established in the bridge to excellence in public schools act of 2002…”. See the ballot wording here: https://ballotpedia.org/Maryland_Question_1,_Gambling_Revenue_Dedicated_to_Education_Lockbox_Amendment_(2018). Will passage of this amendment rectify the original legislation to be as the voters intended? Or are minimum funding formulas still alterable enough to allow creative budget maneuvers that would take away education funds in the future? Even if funds do eventually provide a windfall for needed capital expenditures in the school systems, there is still the issue that this funding comes out of the pockets of poorer residents. What will be the ongoing ramifications of gambling as a wealth redistribution mechanism in Maryland?

Links:

https://baltimore.cbslocal.com/2018/08/08/maryland-lottery-and-casinos-break-records/

https://baltimore.cbslocal.com/2018/02/01/maryland-casinos-schools/

https://www.washingtonpost.com/local/md-politics/maryland-lawmakers-move-to-ensure-that-all-casino-funds-go-to-education/2018/04/07/1721fc2e-3a73-11e8-9c0a-85d477d9a226_story.html?utm_term=.0c90b2190e02

https://wamu.org/story/18/08/28/fact-check-hogans-lockbox-maryland-governor-taking-little-much-credit-school-funding/

References

Carpenter, R. E., Perlman, E. L., & Norris, D. F. (2010). Who pays for the Maryland lottery?: Evidence from point of sale data. Journal of Gambling Business & Economics, 4(1), 31.

Wisman, J. D. (2006). State lotteries: Using state power to fleece the poor. Journal of Economic Issues (Association for Evolutionary Economics), 40(4), 955.

America's Achievement Gap

The education system is extremely difficult to change because it was built on inequality to begin with. While I do support school-centric reforms, focusing too intently on those reforms alone can actually mask the real need and call for systemic reforms. If you take a look at the infographic created by the Schott Foundation and the National Education Policy Center, two particular obstacles that schools in poorer areas face are ongoing history of discrimination and current policies that fail to educate or enrich. I believe educators can help bridge school-centric reforms with systemic reforms. At the school level, teachers can impact student learning through their instructional approach; however, I think it’s equally important for teachers to expose the inequalities that make up our system. Unless we raise leaders to identify the issues and tackle the system, the system is only going to perpetuate itself. So why would students even consider taking on this challenge? Freire (1993) put it best:

Students, as they are increasingly posed with problems relating to themselves in the world and with the world, will feel increasingly challenged and obliged to respond to the challenge. Because they apprehend the challenge as interrelated to other problems with a total context, not as a theoretical question, the resulting comprehension tends to be increasingly critical and thus constantly less alienated. Their response to the challenge evokes new challenges, followed by new understandings; and gradually the students come to regard themselves as committed.

Teacher Challenge: How are you going to utilize your pedagogy and curriculum to foster education as a practice of freedom as opposed to a practice of domination?

Freire, P. (1993 [1970]). Chapter 2 of Pedagogy of the Oppressed (52-67). New York: Continuum.