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Kids, Veterans, Moats and Boats

February 20, 1998
By: Samantha Young
State Capital Bureau

JEFFERSON CITY - The boats-in-moats legal fight is putting a cloud over a deal the governor cut with a veterans' group to gain support for his plan to fund day-care services at local schools.

A complicated combination of politics and litigation combines gambling, day care services, veterans, and other state programs.

At issue is Gov. Mel Carnahan's proposal to expand day-care services in the state. His plan would allocate grants to local school districts to establish pre-kindergarten facilities for children ages three to five. About $20 million of the funding would come from casino taxes.

But veterans have been eyeing that tax money for the Kansas Liberty Memorial and the National Guard.

So the administration proposed rolling the day-care program into the same bill with the veterans plan. The result: Carnahan would get part of the funding to establish day-care services, and veterans would receive funding for the next 20 years.

Day care would be the biggest winner, receiving the majority of the gaming money, $20 to $22 million. The Liberty Memorial Fund and the National Guard would receive $3 million each.

Currently $1 of the $2 admission fee goes to the Missouri Gaming Commission, which allocates money to the veterans capital fund after administrative and licensing costs have been paid. Casino taxes currently go toward education.

However, two lawsuits are pending that threaten the money:

* The Gaming Commission is threatening to shut down six "boats in moats" casinos. The state Supreme Court found the moat concept unconstitutional in November. The boats have continued operating only because of a court order that is now pending before the state high court.

* Casinos charge they are being double taxed by an admission fee and an enforcement fee. The casinos have filed suit to eliminate the latter tax burden and pay police enforcement out of the state's portion of the admission fee.

Either case could reduce state revenues and, in turn, reduce if not eliminate future funding for the proposed day-care programs.

Missouri casinos paid $195 million in state and local taxes during fiscal year 1997, 54 percent of which was paid by the six moat casinos, according to the Gaming Commission.

Some legislators argue Carnahan's day-care plan counts on unreliable funding and that could cause future problems.

"If the money's not there, we will still have all these kids [the governor has] promised to take of," said Sen. Ken Jacob, D-Columbia.

Carnahan said he does not have a backup funding source if the state loses the gaming revenue.

Sen. Joe Maxwell, D-Mexico, said he is not worried about loosing future funding.

"I do not believe if those boats don't keep floating, it ends our program," Maxwell said. "The program is established on a grant basis. We would have fewer programs offered in Missouri and schools would pitch in more."

Even with fewer day cares, Maxwell said the program could operate for a few years, and then the General Assembly could revisit the funding issue later.

But Jacob argues the program should not be started if it is not done right the first time, without the guaranteed funds.

Meanwhile, some are attacking the veterans' side of this plan.

They argue all the gaming revenue should go to education programs as promised when riverboat casinos were established in 1994 by a state constitutional amendment.

"I don't begrudge any of these programs, the liberty memorial and the National Guard," said Steve Taylor of Casino Watch, an anti-gambling organization. "But on the face of it, it looks unconstitutional."