BERLIN — With the clock ticking on the 2015 Maryland General Assembly session, state lawmakers this week reversed course and restored millions of dollars in local impact grants from the state’s casinos back to the jurisdictions in which they are located including Worcester.
Senate Bill 57 and House Bill 73, also known as the Budget Reconciliation and Financing Act of 2015, would have taken over $4 million earmarked for local impact grants to the communities in which the state’s casinos are located, including Worcester, and transferred it to the Education Trust Fund. In a pre-determined formula, a portion of the revenue derived from the state’s five operating casinos is diverted to local jurisdictions in which they are located for discretionary use for capital projects, infrastructure improvements and the like.
However, the governor’s budget as proposed would have stripped some of those local impact grants and moved them to the Education Trust Fund, which already receives around 28 percent of the casino revenue before the proposed changes in the formula. Senate Bill 57 and House Bill 72 would have increased the level of casino revenue to the Education Trust Fund at the expense of the local jurisdictions, including Worcester and some of its municipalities.
“The governor’s budget as proposed would have changed the community impact money from the casinos,” said Senator Jim Mathias (D-38) this week. “It would have taken 10 percent and shifted it to the Education Trust Fund. We worked very hard on this and both the Senate and House have reinstated that money. The reduction has been averted and those dollars have been restored.”
Mathias said this week he and the Eastern Shore delegation in Annapolis were able to successfully convince the governor and state leadership to reverse the decision to essentially rob the local impact grant pool for the benefit of the local impact grants.
“We sat down with the governor and his Chief of Staff and the Senate and House leadership and got this money restored,” he said. “They made a pledge to the rural counties. Three of the existing casinos in Maryland, including Worcester, Cecil and western Maryland are in rural areas and they have become very dependent on these monies. The local jurisdictions rely on those community impact grants to help balance budgets and pay for capital projects.”
The amount of local impact grant money that was planned to be diverted to the Education Trust Fund from the local impact grants would have been significant. For example, the governor’s proposed budget would have diverted nearly $4.1 million in local impact grant money in fiscal year 2015 and another $3.9 million in fiscal year 2016.
Based on the current estimates, the legislation as proposed would have reduced the amount of local impact grant funding for Worcester County and its eligible jurisdictions from the Casino at Ocean Downs by $298,584 in 2015 and another $284,951 in 2016. The breakdown for the local impact grant transfer would have included $179,150 less in 2015 for Worcester County and $170,971 less in 2016.
The town of Ocean City would have received $59,716 less in 2015 and $56,990 in 2016, while the town of Berlin and the Ocean Pines community would have received $29,859 less in 2015 and $28,495 less in 2016. According to the local impact grant formula for the Casino at Ocean Downs, Worcester County receives the lion’s share while Ocean City Berlin and Ocean Pines also receive local impact grants because they are the jurisdictions impacted most by having the casino essentially in their backyard.
Earlier this year, Worcester officials fired off a letter to state lawmakers urging a reconsideration of the decision to divert local impact grant funding to the Education Trust Fund.
“This legislation would have a negative impact on the county’s finances as we have designated these funds to pay the debt service on the Worcester Career and Technical High School,” the letter reads. “Instead, under this legislation, projected funding of $179,150 and $170,971 would be redirected to the state Education Trust Fund for statewide distribution with little or none of these funds being allocated to Worcester County. This legislation would further divide our slice of the pie to further supplement the Education Trust Fund.”
Mathias said in addition to the reversal of the local impact grant funding to the jurisdictions in which the casinos were located, agreements were reached this week to restore roughly $19 million in Highway User Funds to the counties. In recent years, the state has raided the Transportation Trust Fund and transferred the money to the state’s General Fund, but negotiations were successful in restoring some of the money for highway projects back to the counties this week.
“It was a good morning for the Eastern Shore,” Mathias said on Wednesday. “That comes from working together with the new governor and the House and Senate leadership.”