Ohio casino taxes don't solve budget problems, officials say

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Ohio casino taxes don't solve budget problems, officials say
The state has distributed more than $111 million in taxes paid by the Horseshoe in Cleveland and two other casinos.  

The state has passed out more than $111 million in casino taxes, mostly to counties, cities and school districts, since Las Vegas-style gambling came to Ohio last year, but some local officials say they continue to struggle with cuts made in recent years.

The latest allocations went out this week, with schools receiving the first of two annual distributions and counties and cities reaping their third quarterly installments.

Berea school officials have decided that their first check, for $142,512, will go to general operating expenses. Interim Treasurer Dale Cummins said declining property values and the state's decision to cut reimbursement for phased-out business taxes have cost the district $2.5 million this fiscal year. He said the casino money "doesn't even begin to cover the reductions."

The Shaker Heights schools have lost $8 million in state funding in the last two years, spokeswoman Peggy Caldwell said. She said the district will add $112,437 in casino taxes to reserves.

"It's certainly welcome," Caldwell said. "But it is a very, very small amount in the context of the state cuts."

Lorain County has netted $1.5 million since last year and put the money into a $52 million operating budget. Budget Director Lisa Hobart said the casino taxes will partially offset the loss of state funds and interest income in the last few years.

Not everyone is using their casino taxes to patch holes in finances.

Geauga County, which has received just under $460,000, is using the money to more quickly pay off $5.1 million in debt remaining from construction of a safety-service center and the purchase of communications equipment for the sheriff's office. Auditor Frank Gliha said scheduled payments total $500,000 a year.

Cleveland collected $2.5 million in casino taxes this week and has taken in almost $6 million since last year. Finance Director Sharon Dumas has estimated that the city will receive $11.4 million this year, which will include taxes on a casino set to open March 4 in Cincinnati.

Mayor Frank Jackson's administration will keep 85 percent of the money, putting a portion into downtown police protection and cleanup and spending some of the rest on roads, bridges and city buildings, Dumas said. The remaining 15 percent will go to City Council members for projects in their wards.

Ohio charges a 33 percent tax on the gambling revenue casinos have left after paying winners. Under a formula in the state constitution, 51 percent is divided among the state's 88 counties, based on population, and 34 percent goes to school districts, according to enrollment.

Eight cities that had populations of at least 80,000 in the 2000 census -- and ranked as the largest city in their respective counties – get half of their counties' shares. Cleveland and the three other cities where casinos are or will be based claim 5 percent of the local casino's gross.

Though all school districts are supposed to receive money, Beachwood missed out because the district did not properly submit enrollment figures, according to the Ohio Department of Taxation.

Beachwood school officials could not be reached for comment. The district can get a share of the money when school allocations are distributed again in August.

Before the 2009 vote to amend the constitution and allow four casinos in Ohio, the state estimated that the casinos would collectively take in as much as $1.9 billion a year in revenue once all were open. More recent forecasts have tempered those expectations.

The Horseshoe Casino Cleveland opened May 14, followed by the Hollywood Toledo at the end of that month and the Hollywood Columbus in early October. Combined, the three casinos took in $350 million through the end of the year.

The casinos will face increasing competition as the state's seven horse tracks add video lottery terminals that look and act like slot machines. Casino operators say they also are losing business to hundreds of Internet cafes that critics argue are a facade for illegal gambling.

Follow Thomas Ott on Twitter @thomasott1.

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