School Officials Concerned over Casino Mitagation

September 11, 2013
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School officials and School Committee members are concerned about the lack of dedicated mitigation for the schools by Suffolk Downs in the recently-signed Host Community Agreement, and they also believe the agreement could affect state funding payments to the City’s schools.

That concern was highlighted at a public forum last Tuesday night where School Committee member Stacy Rizzo asked whether or not the schools had been considered and if increased revenues would altar the state school funding formula, from which Revere receives some $45 million right now.

This week, those concerns are being echoed by Superintendent Paul Dakin, who said he wasn’t disappointed with the Host Community Agreement, but he had hoped there would be a dedicated stream of money coming to the schools to mitigate impacts of the casino.

“I was hoping the Suffolk Downs folks would build in a 1 percent stream to the agreement, but they didn’t,” he said. “We’re absolutely going to need mitigation money. If we do get this casino, I think our enrollments will only grow. We’re right there. Many of the jobs aren’t going to go to people who are here already. They will be hotel workers and casino workers and other similar jobs and they’re not going to live in downtown Boston or Winthrop. They’re all going to live here, and they will have families with them. We’re not going to get the high rollers here.”

Dakin said he had been in meetings at an earlier date where Suffolk Downs officials had requested to discuss with him ideas about school mitigation. He said he proposed that they build into any agreement a dedicated sum equal to 1 percent of the yearly school budget. For example, this year the School Budget is $75 million, meaning mitigation of $750,000 would come directly to the schools.

“I didn’t see anything like that,” he said. “Everything goes to the City, but I don’t think we’ll see any of that in the schools. The City has many things they want to do and take care of and they’ll need every penny for it. That’s a good thing. I want them to use that money. My hope was that the folks on the gaming side would have been cognizant enough to understand that this casino  will affect the schools and we’re going to have to deal with some problems.”

Mayor Dan Rizzo said he appreciated the concern of those in the school community, but he didn’t believe there was any need to worry about school mitigation or state funding formulas, known as Chapter 70.

“The recently signed Host Community Agreement between the City of Revere and Suffolk Downs will generate $15 million a year and create thousands of jobs for the community, and not alter chapter 70 funding,” he said. “In fact, the revenue created by the gaming law in Massachusetts will create additional revenue for the State Budget, which could in turn flow back to cities in towns in the form of local aid.”

Nevertheless, Dakin said he is also concerned about Chapter 70 school funding, which is based upon the revenues of a city or town. Basically, the wealthier a City is, the more it is required to give to its school system.

Dakin said he wants to make sure that gaming mitigation money doesn’t end up boosting the City’s share of school funding, thus taking up a much larger portion of the City Budget.

“The more capacity you have to pay for schools yourself because of revenues, the less the state gives you,” Dakin said. “That means the City has to contribute more. With gaming revenues coming in, the state could come in and change the formula for Revere and require the City to pay a larger share. That’s been a real concern in Milford (which also has a casino proposal) and for me. I don’t want the City not to be able to maximize the money they get because it’s all being gobbled up by a larger contribution being given to the schools.”

Milford had already requested a study by the state Department of Elementary and Secondary Education into the effects of increased revenues and property values on Chapter 70 funding. It was the only community to make such a request, and state officials apparently found that the Town would lose a good amount of state dollars – dollars that would have to be made up by the Town.

Within a local analysis by Milford, they estimated their schools could lose about $600,000 to $2.7 million per year. Officials there were looking to use the study to provide mitigation money to its schools.

City Councillor Brian Arrigo, chair of the Council Ways and Means Committee, said he believed Milford had negotiated a $2.5 million fund for its schools, a fund to be used only if there were in fact decreases in state funding.

“My thought is that they should have been thinking about that here before or while they were negotiating,” he said. “I would think that would be a bargaining chip they could use…There is no money earmarked for anything. Most other agreements have an amount dedicated to police, fire and even schools…Any change in our funding formula could be disastrous.”

That said, at last Tuesday’s meeting, State Rep. Kathi-Anne Reinstein (D-Revere) indicated that the Legislature did not foresee any changes in school funding formulas coming to cities or towns that host a casino. She indicated that there  would also be plenty of revenues coming to the state to offset any change in formulas if that were to happen.

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