Ohio’s 24-year quest to find a constitutional school-funding formula appears headed for yet another roadblock – this one courtesy of the state’s powerful casino interests.
Back in 2009, the casinos drafted themselves a constitutional monopoly, then paid for the campaign to get voters to approve that monopoly by making promises they never kept. The biggest broken promise: Casinos would bring in $4 BILLION in revenues during their first five years of operations. After 6 years, however, the revenue had barely topped $1 billion.
Casinos have their hands out again, this time asking to oversee legal sports betting.
Advocates for public education should be opposed to this idea for several reasons. One big reason: If casinos get their way, Lottery profits – which go to education – would likely be adversely affected.
According to research from Pew Charitable Trust, states have seen their lottery profits suffer with the arrival of competition from new forms of gambling. The explosive growth of casinos hurt some lotteries especially hard, such as ones in West Virginia, where gamblers are drawn to the state’s own casinos, as well as new ones in nearby Maryland and Pennsylvania.
William Phillis, Ohio’s premier expert on school funding, cited Pew’s studies that show casinos tend to pirate Lottery profits during his 2019 testimony in favor of making sports betting a Lottery product – rather than put casinos in charge.
“If Ohio chooses to allow sports betting, it must be structured in way that provides a sizeable and sustainable funding stream for primary and secondary education. To achieve that goal, sports betting must be a lottery product, so the net proceeds help fund public schools,’’ testified Phillis, the long-time Executive Director of the Ohio Coalition for Equity & Adequacy of School Funding, the entity that successfully sued to declare Ohio’s funding plan unconstitutional. “I see no public purpose in allowing the casinos to oversee sports betting,’’ he said. “While I am not crazy about lotteries either, at least the Ohio Lottery helps pay for public schools.’’
Money from the state Lottery represents just a small percent of Ohio’s spending on primary and secondary education but it still transferred about $1.2 billion to the Lottery Profits Education Fund in fiscal year 2019. If Lottery profits suffer, it is very unlikely that legislators would make up the difference.
The fight over who should control sports betting comes amid a promising new school -funding formula – but one that requires a multi-year phase-in. Early last year, Ohio appeared eager to try and fund it. The new formula was crafted under the leadership of Republican Bob Cupp, Ohio’s new House Speaker, and Democrat John Patterson, a former state representative.
For about three years, the two sought input from all interested parties, planned to determine a base cost for educating a student based on school district demographics and even proposed direct funding for the always controversial topics of charters and school vouchers. Their so-called Fair School Funding Plan gained the support of several educational organizations who, in a joint letter, described the plan as “a school funding system that meets the needs of all Ohio’s students in the 21st century.”
Then COVID19 caused an economic downturn that resulted in cuts to education.
With Cupp holding the Speaker’s gavel and Patterson gone from the Ohio House, a new team is taking over the task of searching for a way to pay for the promising new formula. Gov. DeWine told reporters said his budget proposal intentionally did not propose a new funding formula, “knowing that both the House and Senate both had significant ideas and were well along in their process of developing a new formula.”
In addition to finding money to pay for schools with the virus still raging, the legislators’ task is complicated by the similarities between those who favor allowing casinos to oversee sports betting and those who supported the nuclear bailout law that is at the center of an on-going FBI investigation.
ProgressOhio released a memo that said, “casinos appear to be poised for a big win with help from the same policymakers, lobbyists and consultants who supported the nuclear bailout law now at the center of the FBI’s ongoing bribery investigation.’’
The ProgressOhio list includes:
Lobbyist Leah Pappas represents both FirstEnergy and casino interests; and lobbyists Brooke Cheney and Victor Hipsley who represent casino owners and developer Jacobs Entertainment and bailout beneficiaries the Ohio Coal Association. (It overlooked lobbyist Adam Hewitt who represents Penn National Gaming and unions that backed the casino ballot issue and the nuclear bailout).
Former House Speaker Jo Ann Davidson sits on the Ohio Casino Control Commission. She also served on the board of Empowering Ohio’s Economy, a dark money group financed mostly by AEP. It funneled money to another dark money group, Generation Now, which entered a guilty plea last week to federal racketeering charges that it was the vehicle through which the bribes to Householder flowed that helped to finance the nuclear bailout.
Former state Sen. John Eklund served as lead sponsor of a Senate bill to put sports betting under the Casino Control Commission. He is senior counsel at the law firm Calfee Halter & Griswold that also employs Pappas. The firm also worked for Partners for Progress, FirstEnergy’s dark money entity.
Gov. Mike DeWine – while still a candidate – appeared reluctant to allow sports betting. Then he teamed up with Jon Husted as his lieutenant governor. DeWine now wants to bring sports betting to Ohio – and put the casinos in charge.
This is the same Jon Husted who has the distinction of being the ONLY person to receive an honorary degree from ECOT. While serving as Ohio House Speaker, Husted led a successful effort to eliminate the Legislative Office of Education Oversight – the ONLY independent agency tasked with evaluating education programs. Husted recruited long-time ally Sam Randazzo for the job of chair of the Public Utilities Commission of Ohio, but Randazzo stepped down after the FBI raided his condo. And Husted convinced the governor to tap former FirstEnergy lobbyist Dan McCarthy to be his chief lobbyist.
If you don’t want to hurt public education and don’t want to hand casinos yet another monopoly, please contact Gov. DeWine. He’s clearly listening to the wrong people.