Hogan Budget to Take Back $372,000 from Casino ‘Impact Aid’ in Cecil County

January 29, 2015
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Governor Larry Hogan’s recently proposed Fiscal 2016 state budget would cut local impact aid to counties and communities where gambling casinos are located, including a $372,000 hit on Cecil County’s aid from the Hollywood Casino in Perryville.

An analysis of the budget proposal by the General Assembly’s non-partisan Department of Legislative Services said that the budget proposal would re-direct over $3.8 million in Fiscal 2016 statewide from local casino impact aid to the state’s education trust fund, to which the casinos already contribute a share of their revenues. The shift in funds would enable Hogan to cut an equal amount of state general funds currently allocated to education.

The aid cut would also affect the town of Perryville, which receives 35 percent of the impact aid generated by the Hollywood Casino under an agreement with the county government. So the proposed aid cut would diminish the county’s share by nearly $242,000 and the town’s share by over $130,000.

The local impact aid is supposed to help counties and towns cope with costs associated with providing fire, police and emergency services as well as road improvements and other projects in the area of the casinos.

In the current Fiscal 2015 budget, Cecil County anticipated nearly $3.2 million in impact aid revenues. A significant allocation of those funds– $345,000—was dedicated to Health Department programs aimed at combating drug abuse in the county. Other programs receiving casino-generated aid included economic development, volunteer fire companies, the town of Port Deposit, and various non-profit groups.

According to the state’s Lottery Commission, the Hollywood Casino generated a total of more than $3.8 million for total impact aid in Cecil County in calendar year 2014.

Craig Whiteford, Cecil County’s budget manager, said the state appears to be over-estimating the casino revenues in the new budget while Cecil County has always taken a conservative approach to forecasting the amount of aid it will receive. So the actual dollar amount of the governor’s proposed take-back from the county could be smaller than estimated.

“We don’t spend the money until we get it,” Whiteford said. As a result, the county often carries over some of the impact aid it receives into the following fiscal year’s budget as a cushion.

The casino impact aid take-back comes on top of broader reductions in state direct aid to Cecil County in the new Hogan budget. His proposal would cut more than $2.1 million from various programs, especially the Cecil County Public Schools. [SEE previous Cecil Times Special Report here: http://ceciltimes.com/2015/01/hogan-budget-cuts-2-1-million-in-cecil-county-direct-aid-gov-counts-pension-costs-as-state-contributions-to-schools-college/ ]

The state Legislative Services budget experts calculate the cuts to Cecil County as even more—over $2.8 million—in comparison with current law, including the casino impact aid takeback.

The largest single budget hammer fell on the county’s public schools, which would suffer a more than $1.7 million reduction due to changes in state school aid formulas.

County Executive Tari Moore told Cecil Times that the schools’ aid reduction was “a really big deal” and she was set to meet with school officials this week to discuss budget issues. “No doubt about it, it’s been really rough” for the county to have to come up with escalating shares of teacher pension costs in the past few years, as the state has shifted more of those pension costs to the local governments.

In the county’s upcoming budget, local taxpayers will have to come up with $3.9 million to help pay teacher pension costs, an increase of $591,000 over the current budget year.

Although the governor’s capital budget continued construction aid for the county’s new school of technology, there is a “ripple effect, and it is significant,” Moore said. The larger school will have greater utility costs than the old facility that is being closed, new programs to be offered at the school require new equipment and teachers with special skills, for example. The tech school is slated to begin operations later this year.

“From the state level, we all understood there would have to be cuts,” Moore said. “But it’s hard when the cuts come down to the local level.

“It is what it is,” Moore said stoically. “But I am confident we’re going to get through this,” she added. “But it’s going to be a very difficult year.”

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ALAN McCARTHY for COUNTY EXEC

*THANK YOU, CECIL COUNTY VOTERS!

* I am grateful for your support and I heard your voices on issues that concern you. I will work hard to create jobs, expand economic development, back our law enforcement officers in the fight against crime and drugs, and support strong schools..

*We will work together to make Cecil County "The Best It Can Be."

(Auth: Friends of Alan McCarthy, Roger Owens, Treas.)

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