By State Senator Kevin
Witkos
“Where does all the casino money go?” It
is perhaps the one question that I am asked more than
any other. With the state continuing to face a substantial
budget deficit, people are even more interested in finding
out exactly how much revenue the state receives from
its two casinos and how these funds are allocated. The
purpose of this week’s column is to give you some
background about Connecticut’s agreement with
the casinos and how money is distributed.
In 1993, then Gov. Lowell Weicker and the leaders of
the Mashantucket Tribal Nation agreed on a compact that
would allow the Mashantucket Pequots to conduct slot
machine gaming in exchange for the state receiving 25%
of all slot machine revenue. This was later expanded
to include the Mohegan Tribe’s slot revenue when
their casino opened in 1997.
To this day, Connecticut has collected over $5.2 billion
in slot revenue from the state’s two operating
casinos (Foxwoods and Mohegan Sun) since the accord
was brokered. Last year alone, the state received nearly
$378 million in revenue from the casinos. While this
is indeed a lot of money it is down considerably from
the over $430 million the state received in 2007, certainly
a sign of these troubled economic times.
So where does all of this money go? The simplest answer
is that it goes back to the taxpayer. Nursing homes,
schools and public safety programs all benefit from
money raised by the casinos. In fact, all 169 municipalities
in Connecticut get a portion of the funds raised through
slot machine revenue through a fund created solely to
ensure that each town receives funding.
Known today as the Mashantucket Pequot and Mohegan
Fund (Pequot Fund), a portion of the money raised through
casino gaming is set aside and placed into this separate
nonlapsing account so that it can be allocated to each
and every municipality in the form of state aid. In
its 17 years in existence, the fund has provided hundreds
of millions of dollars in state aid to our local communities.
Money is distributed from the fund to towns based on
number of various formulas and criteria, including size
and location. Unlike other state grants to municipalities
that are designated for a specific purpose, towns can
use money from the Pequot Fund for anything; giving
them great flexibility to fund education initiatives,
public works projects or any need in that community.
Money that does not get diverted into this fund goes
directly into the General Fund. One of the reasons that
I opposed last year’s Democrat state budget is
that it took more than $30 million (of the $90 million
allocated in 09) out of the Pequot Fund in order to
reduce the deficit in the General Fund. This meant that
every city and town saw their portion of the fund reduced.
In fact, the towns of Avon, Canton and Simsbury together
received less than half lost of their fund allocation
from last year to this year.
One misconception is that the money the state receives
from the casinos was intended to go to education. This
was never the case and is often confused with revenue
generated from the state lottery. The lottery was established
in 1971 and from 1975-1977 the revenue from instant
games went to education equalization grants. This was
later discontinued and now all money, included the $283
million raised last year from the lottery, goes directly
into the General Fund.
For a breakdown of what each town receives in aid from
the Pequot Fund, or for more information regarding money
the state receives from the casinos, please contact
me at 1-800-842-1421.
As seen in the Foothills's Trader Newspaper.
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