Citing decline in gambling revenue, Missouri Gov. Nixon cuts school funding

05/20/2014 6:05 PM

07/23/2014 5:19 PM

Missouri Gov. Jay Nixon announced an additional $35 million in spending cuts Tuesday for public schools and universities, citing concerns about declining state revenues from lottery sales and casino taxes.

Because schools are wrapping up their academic year, there is unlikely to be an immediate effect on classrooms. But some districts might have to dip into reserves to make it through the fiscal year that ends June 30.

“It’s going to force a lot of school boards and superintendents to do some scrambling,” said Brent Ghan, a spokesman for the Missouri School Boards’ Association.

The spending cuts come on top of $22 million of education budget restrictions that Nixon announced in April, also as a result of declining lottery and casino revenues. Because gambling proceeds are earmarked for education, the cuts must come from that area when revenues fall short, Nixon said.

Missouri' K-12 school funding formula will lose $24.6 million in the latest round of cuts, raising the total cut to more than $40 million this year. Universities will lose $10.5 million, raising the total higher education reduction to nearly $17 million.

Casino revenues are projected to show a 6 percent decline from the previous year, while lottery revenues are expected to be 4.9 percent less.

The Missouri Gaming Association has attributed part of the decline in casino revenues to a cold and snowy winter and the lingering effects of the recent economic recession. Increased competition from a new casino in Kansas City, Kansas, also could play a role, as could a change of ownership at a St. Louis casino.

Nixon’s budget director, Linda Luebbering, said the reason for the slumping lottery revenues “is a little bit less known” but could depend partly on the number of large jackpots that can spur a surge in ticket sales.

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