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FREQUENTLY ASKED QUESTIONS ABOUT
Proposition A, The Schools First Initiative
ABOUT THE INITIATIVE’S SCHOOL FUNDING BENEFITS
How will Prop A, the Schools First Initiative, provide increased funding for Missouri schools?
Missouri’s riverboat casinos currently pay a 20% state tax. Ninety percent of these revenues are dedicated to education and the remainder is distributed to the cities or counties where riverboat casinos are located. The Schools First Initiative increases this tax to 21%. It also updates Missouri’s casino regulations by eliminating the state’s outdated $500 chip limit regulations. These changes will allow Missouri to compete on an equal basis with other states to attract casino visitors and increase the total revenues subject to the 21% tax.
How much new funding will the initiative provide to Missouri schools?
The official fiscal analysis by the Missouri State Auditor determined that the Schools First Initiative will provide $105 to $130 million in new revenues each year for K-12 schools statewide. That’s a total of more than $1 billion every 10 years.
How will these new funds help our schools?
Missouri schools currently pay the 43rd lowest teacher salaries in the nation and rank 38th in per pupil expenditures. Many of our schools are unable to attract experienced teachers or meet education progress goals. And, Missouri’s dropout rate for grades 9 through 12 has increased every year since 2003. There is no single solution to our schools’ funding needs, but the Schools First Initiative will help. It will provide more than $100 million per year in new funds that schools can use to attract and retain experienced teachers, reduce student-teacher ratios and improve the quality of education for our children.
How does the initiative ensure that the tax revenues from casinos will go to schools?
The Initiative creates a special, dedicated fund for casino tax revenues, called the Schools First Elementary and Secondary Education Improvement Fund. It clearly specifies that these revenues can only be used to fund elementary and secondary education. It also specifically prohibits the legislature from using the casino revenues to replace or supplant any other education funds. And, it requires annual audits of education funds by the State Auditor to ensure that funding for schools is being increased and used as intended by the Initiative.
OTHER STATE AND LOCAL BENEFITS PROVIDED BY THE INITIATIVE
Will the initiative protect or increase any other state and local revenues, in addition to the revenues that go to schools?
Yes. Missouri casinos also pay a $2 dollar per visitor excursion fee that currently generates over $50 million each year. Half of those revenues are used by the state to help fund early childhood education programs, veterans’ services and other statewide programs. The other half goes to local governments. By getting rid of Missouri’s unpopular chip limit regulations, the initiative will increase the number of visitors to Missouri casinos. This will provide millions in new revenues each year for early childhood education, veterans’ services and other state programs and millions more for local government services, such as law enforcement, fire and emergency services, and road repairs.
Are there any other tax benefits from the initiative?
Yes. Missouri casinos also pay hundreds of millions in property taxes and corporate income taxes each year. By updating the state’s casino regulations so Missouri can compete on an equal basis with nearby states in attracting casino visitors, the initiative will protect and potentially increase those important tax revenues.
How does the initiative benefit our economy?
Missouri casinos directly provide over 12,000 good-paying jobs with benefits. They also help support thousands of other jobs at local businesses that provide goods and services to casinos and their visitors. Tourism is a vital part of the Missouri economy and casinos are a leading tourist attraction, drawing some 25 million visitors a year. The initiative will allow Missouri casinos to attract more visitors – thus protecting and increasing the jobs and economic activity casino gaming provides to our state and to the local communities where casinos are located.
ABOUT MISSOURI’S SO-CALLED “$500 LOSS LIMIT”
What is this $500 limit and how is it enforced?
The 1992 law allowing riverboat casinos in Missouri included an unusual regulation that prohibits a casino visitor from buying more than $500 in chips during any two-hour period. This old regulation is generally called the “$500 loss limit” – even though it’s actually a limit on how many chips a casino visitor can buy, not on how much they can win or lose. To enforce this so-called loss limit, state regulators require Missouri casino visitors to get special player tracking cards that let the state government monitor how many chips they buy.
Do other states have chip limit or player tracking card regulations?
No. There are no such regulations in any other state or country. Iowa briefly had a chip limit like Missouri’s but repealed it back in 1994 after it became clear that Iowa was losing visitors and revenues to neighboring Illinois casinos that did not have a chip limit. Once the chip limit was removed, Iowa successfully recaptured both the lost visitors and revenues.
How do casino patrons view Missouri’s chip limit and player tracking card regulations?
As stated by the Missouri Gaming Commission, many casino patrons view them “as intrusive, patronizing, frustrating, confusing and inconvenient.” When people first come to visit a Missouri casino, they often have to stand in line for extended periods of time to get a player tracking card. And, they have to get separate cards for each Missouri casino they want to visit. Understandably, many people dislike this complicated red tape. They also feel it is an invasion of their personal rights and privacy to have the state government monitor how many chips they buy.
Have these regulations reduced the revenues our state receives from casino gaming?
Yes. Studies by the Missouri Gaming Commission show that the chip limit and player tracking card regulations make Missouri casinos less attractive to visitors than casinos in neighboring states. This has increasingly reduced the number of visitors who come to Missouri casinos and revenues casino gaming provide to our state, particularly as casino gaming has increased in states bordering Missouri. The Missouri Committee on Legislative Research summed up the impacts by saying that “the loss limit results in less gaming tax revenue for education, fewer tourists and less admission fee revenue for veterans, the National Guard, college student loans and the early childhood development programs.”
What will happen to Missouri casino revenues in the future if the chip limit and player tracking card regulations are not eliminated?
Missouri gaming officials estimate that Missouri casinos will lose $180 to $200 million per year in revenues to the new casinos being built in Kansas if our state’s chip limit regulations are not removed. The Missouri Gaming Commission estimates this would reduce the school revenues provided by Missouri casinos by up to $45 million per year. And, since new Indian casinos are being built in Oklahoma and Illinois is considering a major expansion of casino gaming, Missouri could face even bigger revenue losses in the years ahead.
Why hasn’t the state legislature eliminated the chip limit and player tracking card regulations?
Basically, it’s because of Jefferson City politics as usual. Almost every year bills are introduced to eliminate Missouri’s outdated chip limit and player tracking card regulations. Every year, those bills are blocked by a few powerful, conservative politicians.
Doesn’t the $500 chip limit actually reduce problem gambling?
No. Since Missouri is the only state that has a so-called loss limit, it would have a lower percentage of problem gamblers if the loss limit actually reduced problem gambling. But, in fact, Missouri has the same small percentage of problem gamblers as other states (about 1% of casino patrons). Iowa is only other state that ever had a loss limit like Missouri’s. When Iowa repealed its loss limit in 1994, there was no increase in the reported incidences of problem gambling. The former director of Iowa’s treatment program for problem gamblers told a Missouri legislative panel that the loss limit was difficult to enforce and “simply did not deter the problem gambler.” After extensive study of this issue, the Missouri Gaming Commission has concluded that “no one has presented any evidence that the loss limit deters people from becoming problem gamblers.”
ABOUT THE INITIATIVE’S LIMIT ON CASINO LICENSES
What does the initiative’s limit on the number of casinos do?
Currently, there is no limit on the number of riverboat casinos allowed in Missouri. The initiative limits the number of casinos in Missouri to the 12 that are already built plus those currently under construction. Since there is one new casino currently under construction in Lemay, near St. Louis, that sets a cap of 13 casinos.
Why is a limit on casinos included in the initiative?
The initiative is designed to protect and increase the revenues casinos provide to our schools and other state and local services. Missouri casinos already face major new competition from casinos in neighboring states. At this point, adding more casinos within Missouri would make it even harder for each casino to stay profitable – and would not necessarily increase the total revenues our state receives from casino gaming.
ABOUT THE YES FOR SCHOOLS FIRST COALITION
What is the YES on A Coalition?
We’re the official campaign committee organized to support Prop A, the Schools First Initiative. Our coalition includes Missouri teachers, parents, concerned citizens, and civic and business groups.
How can I join the Coalition to show my support?
You can join online – and get more information – by visiting our website, YESforSchoolsFirst.com.
Is there any cost to join?
No. There’s no cost or obligation to become a member and, by joining, you will help us show we have broad, statewide support. If you would like to donate any time or money to help our campaign, please call our Coalition toll-free at 800-817-3507.
Do Missouri casinos support the Schools First Initiative?
Yes. The Missouri Gaming Association, which represents all casino companies operating in Missouri, has unanimously endorsed the Schools First Initiative.
Do any casinos oppose the Schools First Initiative?
None have publicly expressed opposition to date. However, it’s possible that casinos in other states may fund a campaign against the initiative, because they want to prevent Missouri casinos from competing with them on an equal basis for casino visitors.
SOURCES
Missouri State Auditor’s Office, Fiscal Note (07-21)
Impact of $500 loss limit repeal, 1% AGR Tax Increase and Kansas Gaming, Missouri Gaming Commission, 1-8-08
Schools First Elementary and Secondary Education Funding Initiative, Fiscal Review Services, 1-07-08
NEA Research, Estimates Database, 2006
Missouri State Auditor’s Report, 8-22-02
Missouri Department of Elementary and Secondary Education, press release, 8-14-07
Missouri Department of Elementary and Secondary Education, 11-2-07
The Schools First Elementary and Secondary Education Funding Initiative, Proposed Act, 2008
Missouri Session Laws, 1991, H. B. 149, § A(§ 1), adopted by referendum, effective 11-03-92
Shaun Darby, “Missouri’s $500 Loss Limit: Show Me a Good Reason for Keeping It,” Gaming Law Review, 11-6-07
Missouri Gaming Commission, Annual Report to the General Assembly, FY 1995 – 2007
Committee on Legislative Research, Oversight Division, Fiscal Note, 02-23-07
Missouri Gaming Association, “State of the Industry 2006”
Governor’s press releases on tourism, 1-30-08 and 10-4-07