Fact check

War of words ratchets up in casino expansion campaign

The launch of five video ads by supporters of Amendment 68 has kicked off the 10-week media battle over expansion of casino gambling in exchange for providing extra funding to the state’s schools.

The proposed constitutional amendment will be on the Nov. 4 statewide ballot. If passed it would allow opening of a full casino at the Arapahoe Park racetrack in the southeast suburbs, with a portion of the revenues devoted to K-12 funding.

The campaign pits the Rhode Island casino company that owns Arapahoe Park against the gambling corporations that own existing casinos in Black Hawk, Central City and Cripple Creek, the only places casinos currently are allowed by the state constitution. (See this Chalkbeat Colorado story for background on the amendment.)

As with almost all ballot measure ads, the pro-A68 spots produced by Coloradans for Better Schools reduce complicated policy issues to quick sound bites – there’s only so much one can or wants to say in a 30-second spot.

Here’s Chalkbeat Colorado’s analysis of the assertions made in the five ads. (Some claims are repeated in multiple ads; others are made in only one or two.)

Schools are underfunded – The adequacy of school funding can be a subjective issue. Most people in the Colorado education world agree that schools are underfunded compared to what other states spend, to past per-pupil funding rates or compared to actual costs. But a few in conservative circles dissent from that view and think Colorado schools have plenty of money.

Colorado school funding 40th in U.S. – The ad doesn’t cite the source of this stat. The never-ending funding adequacy debate — even among people who support higher funding — is complicated because different groups use different figures and grounds for comparison. You can see a variety of funding comparisons linked from this page on the Colorado School Finance Project’s website. (That group generally favors higher spending.)

How much K-12 revenue – The ads variously refer to “more than” $100 million or $114 million in annual revenue for schools. Legislative analysts who study ballot measures have estimated $114 million could be generated — but not until 2016-17. Analysts also readily acknowledge the difficulty of predicting revenues from taxes on businesses that don’t exist now. State ballot measure projections have been wrong in the past, and “sin taxes” have been an unsteady revenue source for education in the past. (See this detailed Chalkbeat analysis for more information on that history.)

“A huge investment” – The definition of “huge” may depend on whom you ask. The $100 million or so in new revenue would equal about 1.7 percent of the current $5.9 billion in basic school support provided by state and local taxes.

How many new casinos – The amendment would allow casinos in Arapahoe, Mesa and Pueblo counties. The ads say it “permits expanded gaming at no more than three horse race tracks that already have wagering.” The phrase “already have wagering” may sound like there’s more than one, but Arapahoe Park is the only track that currently meets the amendment’s requirements. No horse tracks with wagering currently operate in Mesa and Pueblo counties, and tracks in those counties would have to operate for five years before they’d be eligible to open casinos.

Carpetbaggers – One ad warns that “out-of-state Nevada and Missouri gambling companies” are opposing A68 to “protect their monopoly.” Several casinos in the three mountain towns are owned by out-of-state companies, and they have contributed heavily to Don’t Turn Racetracks into Casinos, the opposition committee. As noted above, Arapahoe Park is owned by an out-of-state gaming firm, and opponents are targeting that company in their advertising. As for monopoly, the three towns have a geographical monopoly on casinos, but the existing gaming halls don’t have a business monopoly. Any company that wants to open a casino in those towns can do so — if it meets state and local regulatory requirements.

The tax bite – The pro-A68 campaign ads emphasize that schools will get additional revenues “without costing taxpayers one penny.” It’s true that the amendment does not propose any increases in income or sales taxes. But opponents jumped on this claim with both feet, issuing a news release that argues passage of A68 could create new costs for taxpayers in Arapahoe County and would cut into gambling business in Black Hawk, Central City and Cripple Creek, thereby reducing tax revenues that now go to local governments, historic preservation and community colleges. The opposition statement hinted that taxpayers might have to backfill those losses. Those opposition claims are speculative about what might happen in the future, but the legislative staff analysts do project an Arapahoe Park casino would cannibalize revenues from the three mountain towns.

Coloradans for Better Schools launched the ads this week on network stations in Denver, Colorado Springs-Pueblo and Grand Junction this week, according to a spokeswoman. The opposition group hasn’t announced its TV ad plans, but opposition mailers already are landing in mailboxes.

Two of the new ads feature a teacher and a former administrator, but education groups traditionally have been lukewarm or hostile to such sin-tax proposals, which usually have been developed without consulting the education community. On Thursday evening, the Denver school board passed a resolution opposing A68.

Read the full text of A68 here.

School Finance

Teacher raises would survive $211 million cut from Indianapolis Public Schools funding request

PHOTO: Scott Elliott

Indianapolis’ largest school district cut about $211 million Tuesday from its request for extra funding, in a bid to win public support for the proposal.

That lower price tag comes with tradeoffs, district officials said. Even if voters approve the new plan, the district would dip into its cash reserves, put off building maintenance, and ditch expanded transportation plans, such as additional busing for students who move partway through the school year.

The new request also reduces how much the district would raise to pay for services for students with disabilities, though it was initially unclear by how much and how that could affect students.

But district officials said they still expected to be able to give raises to teachers if the referendums pass.

The scaled-back request would raise about $725 million over eight years, significantly less than the initial proposal of nearly $1 billion.

The board voted 6-0 in favor of reducing the amount of money the district is seeking, backing off the number members approved two months ago.

Board member Kelly Bentley said many school districts around the state have asked taxpayers for more money.

“We all own property in IPS. None of us want to see our taxes go up,” she said. But, she added, “I am confident that it’s money that’s going to be well spent, and it’s money that is necessary.”

Instead of pulling back spending on teachers and school staff, the district is making the new plan work by adjusting revenue expectations, said Chief Financial Manager Weston Young. The proposal is built on the assumption that state revenue will increase 1 percent each year, and the district will no longer hold as much money in reserves, he said.

“We are still committed to our students through our compensation for teachers and the wraparound services that serve those kids,” Young said.

Reducing the request could help build enthusiasm for the tax increase, which has not gotten much vocal community support. Instead, the referendums have been met with some concern over the size of the ask. But even though they have pared down their plan, district leaders will still need to persuade voters in May to raise their own taxes.

Superintendent Lewis Ferebee said the new plan is a balancing act between what taxpayers can bear and the cost of providing the level of service that families need. Ultimately, he said, the tax increase would pay dividends by helping the district prepare students for college and careers.

“This is one of those situations where you pay now or you pay later,” he said.

The move cut the potential tax increase for homeowners in IPS to $0.58 per $100 of assessed value, down from the initial proposal of $0.73. For taxpayers with houses at the district’s median value — $123,500 — the new plan would increase property taxes by $17.70 per month for operating expenses and $5.54 per month for building improvements, according to the district.

The referendum the board reduced would pay for operating expenses, such as teacher salaries, and under the new request, it would raise about $66 million per year for eight years. That’s down from the initial request of about $92 million per year.

Under the new plan, about $49 million of the money raised each year would go to staff pay, while the remaining $17 million would help pay for services and supplies, regular maintenance, and transportation.

A second measure, which was not changed, would pay for about $200 million in improvements to buildings, primarily safety updates such as new lighting and door security. Both measures are expected to go before voters in May.

School Finance

Indianapolis Public Schools leaders could scale back their appeal for tax increases

PHOTO: Meghan Mangrum

With little public support and mounting criticism, Indianapolis’ largest school district may scale back its nearly $1 billion request for increased funding from taxpayers.

Indianapolis Public Schools Board President Michael O’Connor told Chalkbeat on Wednesday that the board would likely consider a proposal next week that would reduce the potential tax increase.

All the board members present voted in favor of asking voters for up to $936 million over eight years at a meeting this past December. But there is a consensus among board members that the original proposal would raise taxes too much, O’Connor said.

“The school system needs more revenue,” O’Connor said. But “we think that’s high.”

Superintendent Lewis Ferebee’s administration is working on coming up with a revised proposal, district chief of staff Ahmed Young confirmed. But officials have not yet finalized how much the amount might be trimmed or what services would be reduced to bring down the price tag.

The revelation comes on the heels of stinging public criticism leveled against the district for asking for such a large tax increase. On Wednesday, Indiana State Board of Education member and Indianapolis resident Gordon Hendry slammed IPS’ plan to raise taxes during a state board meeting.

“This may be the most nonchalant billion-dollar tax increase ever approved by anyone,” said Hendry, a Democrat.

The original plan, which was approved by the state for inclusion on the May ballot less than a week ago, includes a measure that would raise up to $92 million per year for operating expenses such as teacher salaries and one that would pay for up to $200 million in improvements to school buildings.

If voters signed off on the operating referendum, their property taxes would rise by as much as $0.59 on each $100 of assessed value, while the capital referendum would raise $0.1384 per $100 of assessed valuation.

The board will not alter the referendum that provides money for building improvements, O’Connor said. But it will consider changing how much it seeks for operating expenses, the part responsible for the bulk of the tax increase.

In the months since the original proposal was unveiled in November, few advocates or community organizations have spoken out in support of the referendums. Instead, groups such as the Indianapolis Chamber of Commerce stayed quiet as they discussed the plan internally.

It’s important to the city that the school district is successful, said Mark Fisher, chief policy officer for the Chamber. There also is general agreement that the district needs more funding, he said. But the group is waiting to hear more from the administration about how the money will be spent.

“It’s a large amount,” Fisher said. “Is this the right amount?”

Tony Mason from the Indianapolis Urban League raised similar questions.

“IPS definitely requires more support to serve the vast needs of its diverse student population,” Mason wrote in a statement. But the district must make the case in detail for the substantial amount it is requesting.

“IPS needs to be mindful of the already existing and unique tax burdens of those living in the IPS district,” he added.

The district has said the referendums are essential because of declining federal, state, and local revenue. According to the district, the operating referendum would pay for special education services, transportation, and regular maintenance. But the bulk of the money, 72 percent, would help pay regular raises to teachers. The referendum to pay for improvements to school buildings would fund updates such as new lighting and door security.

If it passed, the original operating referendum would increase the district’s annual revenue by nearly $3,000 per student. By comparison, a referendum passed in Washington Township in 2016 raised annual revenue by less than $600 per student.

When the initial plan was announced in December, Ferebee told Chalkbeat that political considerations were not used to determine the amount of the referendums.

“We didn’t arrive at this number based on what we thought would be politically appropriate and soothing, but what we actually need to continue to thrive as an organization,” Ferebee said at the time.

But it appears the political challenge of asking voters to dramatically raise their own taxes is more salient for the board.

Board members have privately heard concerns from constituents about the size of the referendums, O’Connor said. He said the district also needs to present more detail to taxpayers about exactly how the money would be spent.

Because $92 million per year is the estimated maximum amount the district could raise if the measure passes, it was always a ceiling, said Young. After the board voted to pursue the initial proposal, the district has continued to do “due diligence.”

“It’s an evolutionary process,” he added.

On Tuesday, school board member Kelly Bentley told Chalkbeat that reducing the amount the district is seeking could help increase the chance that voters approve the referendums and reduce the burden on taxpayers.

“I believe strongly that we are asking no more than what we need,” Bentley said. “But I would rather be successful than not successful in the referenda.”

Correction: February 15, 2018: This story has been corrected to attribute the statement from the Indianapolis Urban League to Tony Mason.