Tuesday, February 13, 2001

Lawmakers gamble with education funding

Ohio weighs multistate lotto, video machines against moral issue

By Spencer Hunt
Enquirer Columbus Bureau

        COLUMBUS — Lawmakers looking for millions to fund schools could put video gambling machines at racetracks, or they could help Ohio join a multistate lottery like Powerball.

        Or, troubled by the moral issue of using gamblers to fund education, they could do nothing at all.

        Consensus is nowhere to be found at the Ohio General Assembly in the wake of Gov. Bob Taft's controversial proposal for a multistate lottery to raise an estimated $70 million in new funds for schools.

        As Ohio's lottery director prepares to push for the governor's plan in Columbus Wednesday, legislative leaders face at least three factions of lawmakers and allied interests who have very different gambling agendas.

        Senate President Richard Finan, R-Evendale, says a multistate lotto such as Powerball or the lesser-known Big Game would revive sagging Ohio Lottery revenues. But he won't guarantee lawmakers will pass the governor's plan.

        “It's too early to tell where this is going to go,” Mr. Finan says.

        Other lawmakers, including Sen. Louis Blessing, R- Cincinnati, want to install video lottery terminals at the state's seven racetracks. That could boost school funding $233 million a year and prop up the horse racing industry.

        “I'd prefer to (pass) both the multistate lottery and the video lottery terminals,” Mr. Blessing says.

        Meanwhile, religious groups morally opposed to gambling claim to have 50 of the state's 132 lawmakers on their side.

        Freshman Rep. Larry Flowers, R-Canal Winchester, wants his colleagues to pass a bill that would freeze all gambling proposals while the state examines the lottery's effects on Ohio families.

        “I just think it sends the wrong message to young people that we are going to gamble to pay for their education,” Mr. Flowers says.

        They have to do something. The state faces an Ohio Supreme Court-imposed June 15 deadline to improve the way the state funds public schools.

        Mr. Taft wants to spend $808 million over the next two years on a plan that he says would satisfy the court. That plan, contained in his two-year budget proposal, assumes $70 million will come from a multistate lottery that Ohio has not yet joined.

        State lottery officials have seen sales dwindle for four straight years as Ohioans play for the bigger jackpots for Powerball and the Big Game, offered in Indiana, Kentucky, West Virginia and Michigan.

        The Kentucky Lottery estimates 10 percent of its revenues come from Southwest Ohioans who play Powerball. That's money the Taft administration wants to keep in the state.

        “This is an effort to stabilize the lottery's declining revenues to improve education,” says Kevin Kellems, Mr. Taft's spokesman. Ohio Lottery Director Dennis Kennedy is expected to echo the governor in testimony before the House Finance Committee on Wednesday.

        The amount of money the Ohio Lottery has generated for schools has dropped in the past few years. In the 1997 fiscal year, it provided $748.5 million. In 2000, the lottery generated $686 million.

        By law, lottery revenues — after paying prizes and meeting expenses — go to the schools. Since its inception in 1974, the lottery has sent more than $9.7 billion to education.

        West Virginia also offers video gambling machines at two horse tracks and two dog racing tracks. The devices, essentially state-monitored video slot machines, now account for more than two-thirds of West Virginia's lottery revenues.

        The four tracks collected $279.8 million in net proceeds from video lottery terminals from July 1, 1999, to June 30, 2000. The state figures to easily break that record this year, already collecting more than $221 million from July 1, 2000, through Jan. 27.

        At the urging of Ohio's seven racetracks, some lawmakers are now privately asking why Ohio shouldn't do the same thing.

        The state could collect up to $778 million a year from track-operated video gambling, according to one estimate. That would create an annual $233 million in profits that could go to schools.

        Racetrack owners would use their cut to revive their businesses and to increase the cash awards needed to attract horse breeders and owners to the races.

        Jack Hanessian, general manager of River Downs racetrack near Cincinnati, says tracks must lure customers away from nearby riverboat gambling casinos to stay in business.

        “(River Downs) is an ideal place to do something like this. Gambling is going on here already,” Mr. Hanessian says.

        But he also acknowledges that lawmakers may be leery of the idea.

        “You have to get over the moral problem,” he says.

        In the governor's office, Mr. Kellems had little to say about video lottery machines. “There are concerns on the part of a number of people throughout the administration,” he says. He would not elabo rate.

        The Rev. John Edgar, leader of an anti-gambling task force for the Ohio Methodist Church and the Ohio Council of Churches, says his group will work to convince lawmakers that lottery initiatives are a threat to families.

        “The lottery is one form of gambling that's in everybody's neighborhood,” Mr. Edgar says. “The lottery is the front door to gambling addiction.”

        Mr. Edgar says his group is counting on 15 senators and up to 35 state representatives to back Mr. Flowers' bill to halt lottery proposals. At least that many had promised to back a similar bill that was introduced, but never advanced, last year.

        Mr. Flowers says he's not sure where the state would find the $70 million the governor says he needs for schools. But he insists the state should not turn to the lottery for the money.

        “I'm not a do-goody individual,” Mr. Flowers says. “But I think we can do better.”


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