Keno in Dover

It does seem odd that we support public education with proceeds from gambling, but this isn’t a new idea in the state.  Today, the state covers 25% of its education trust annually with proceeds from the NH State Lottery system (https://www.nhlottery.com/Where-The-Money-Goes.aspx).  It almost seems more like a necessity now than an option if we expect to continue any state funding back to municipalities for education.

In terms of Dover, what are the facts?

The Keno proceeds from Dover won’t stay in Dover, like the NH State Lottery system, proceeds will be collected by the lottery commission then handed to the state and deposited into the education trust fund.  From there the state will distribute funding back to cities and towns to cover full day kindergarten.  The big need is revenue, plain and simple.  The state needs an income source to offset the cost of fully supporting the full day kindergarten program just signed into law.  Without adequate tax policy in place to offset big spending proposal like this, new revenue streams need to be created.  For cities, like Dover, we are already covering the cost of full day kindergarten, so essentially this should boost our municipal budget in the form of a credit from the state and allow us to offer more enriching programs to our kids.  I think the only issue with this is that we first need to ensure the funding will come prior to making commitments on new expenses in the budget.  That being said, this is a blog post about Keno and not the budgeting process for the school system, which will come once I have a deeper understanding of that process.

So where are we today in Dover?  The city passed a budget that included anticipated funding from the state which we now know won’t happen and as a result has pushed Dover above the tax cap which will now need to be picked up by its resident tax payers.  Again, this post is about Keno in Dover not the budgeting process in Dover, more on that in another post.

Back to Keno for a moment, during the public forum on 10/11, there wasn’t much public outcry against Keno in Dover.  However, there was one resident to speak out against the resolution.  I think the point was that most residents may not even know what Keno is (a form of gambling) and therefore could potentially vote yes on something they don’t fully understand.  I get that, as I had to look it up to truly understand what it was as well.  Here is what I learned.  “Kenogambling game played with cards (tickets) bearing numbers in squares, usually from 1 to 80. A player marks or circles as many of these numbers as he wishes up to the permitted maximum, after which he hands in, or registers, his ticket and pays according to how many numbers he selected. At regular daily intervals a total of 20 numbered balls or pellets are randomly drawn from a container, and prizes are paid out by the house according to how many of each player’s selected numbers are drawn.” (https://www.britannica.com/topic/keno)

Related to Keno and its inherent relevance to school funding of full day kindergarten.  Note: all of the following paraphrased content was collected and redistributed here, from: https://www.nhmunicipal.org/Resources/ViewDocument/882 

  • It costs approximately $3,600 to send a student to a full day of kindergarten.
  • School districts are typically afforded a state grant per kindergarten student of about $1,800 which equates to the cost to send a student to 1/2 day of kindergarten.
  • The state has agreed to distribute an additional $1,100 per student for the fiscal year 2019, which bring the total state funding for kids to $2,900…So about $700/student short of the needed amount to run full day kindergarten.
  • Starting in 2020, the state will distribute additional funding to cover the $700 gap using Keno proceeds…However, if proceeds are not enough to cover the gap, than there will be a proportional reduction in funding from the state but never lower than the committed $1,800 per student.
  • There is NO correlation of a municipality enacting Keno to receive additional state funding.  Let me repeat that….NO correlation.  So this is essentially a “Greater Good” enactment of Keno where the ‘pouring’ establishments in Dover that choose to obtain Keno licenses will essentially be contributing to the State of NH Education Trust Fund that is distributed state wide and NOT specifically back to Dover.

So what is the direct impact to Dover…

  • In May, 2017 – the City Council approved a budget that included an assumed State funding amount of $486,000 to support full day kindergarten.  There was an additional $178,000 included for students in need bringing the total to $664,000.
  • Based on the approved state budget, Dover would be short $189,000 + $178,000 (students in need), or $367,000.
  • Dover had already been covering the gap of $1,800 per student since Dover has had full day kindergarten for several years.  It was the anticipation of state funding that the school board assumed would be coming in that pushed them to come in over the tax cap allotment for FY18 (specifically related to Full Day Kindergarten).  The high school debt service also pushed the school budget over the tax cap, but that is a different conversation…
  • The shortfall from state funding may impact the tax payers of Dover who will need to make up the difference in the school budget until more certainty is understood from the state Keno experiment.  Like I noted earlier though, Dover has been covering the cost of full day kindergarten for 10 years, so this should impact us too much, other than we may have inflated the school budget on an assumption of a credit back from the state.  So in future budget cycles, we may need to be more conservative in our anticipation of state aid, even with Keno in place..

Its very hard to talk about Keno without diving into the basis for what is driving Keno adoption (school and municipal budgets)…

It would seem there is not an economic benefit to the city directly from Keno proceeds in Dover, rather those proceeds will head to Concord and be put into the educational trust fund.  It seems like a big ask of cities at this point to allow gambling without a lot of guarantee that we will see the benefit we are all hoping and to some extent expecting.  I am not sure yet, is my best answer at the moment.  Speaking strictly from a gambling perspective, I don’t yet see enough downside to vote ‘No’.  I am leaning towards allowing our Dover pouring establishments to make that call, which would mean a ‘Yes’ vote from me.  However, I am interested to see where the rest of the city stands on November 7th.  I am also not much of a gambler myself.  What do you think?

 

 

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