Editorial: Keno failure looks like a win for state

Published: 2/17/2019 12:05:18 AM

There are hidden blessings in keno’s failure to meet the revenue projections of its proponents, among them Gov. Chris Sununu.

The recently introduced bingo-style gambling game, run 12 times per hour by the state’s lottery commission, was expected to net $11 million and possibly more. Keno was sold to lawmakers as a way to increase state funding for full-day kindergarten. But it brought in only $1.5 million in net profits its first year.

The first blessing? Since it’s mostly low- and middle-income gamblers who play keno, according to studies cited by the National Institutes of Health, the money the state didn’t gain is money that people who really can’t afford to lose kept. “The bottom three quintiles in socioeconomic status spent the most on the lottery and the highest socioeconomic group spent the least on the lottery,” one study concluded.

The next blessing? The low lottery take, blamed largely on the decision by cities like Concord, Portsmouth and Lebanon not to participate, means no entity is dependent on the revenue. That makes it easier to put the money to another use, which is what Senate Bill 266, sponsored by Dover Democrat David Watters, would do. Watters’s bill, co-sponsored by Concord Sen. Dan Feltes and at least a half-dozen other legislators, would redirect keno revenue away from subsidizing kindergarten to school building aid, which has been moribund for a decade.

Watters’s bill deserves to pass. Funding kindergarten with gambling sends a terrible message about New Hampshire and its values. It is, however, in the New Hampshire tradition.

The late Gov. John King, a Democrat, sold the nation’s first state lottery to lawmakers and the public a half-century ago largely on the grounds that it would raise money for public education. That it did, but lottery revenue only pays for a small fraction of what public education costs.

Then, as now, most of the cost of public education is borne by property-tax payers. Per-pupil school costs, which aren’t all that much lower for 5 year olds than 15 year olds, are about $15,000 per year. The state pays just $3,600 per year per pupil, plus additional sums for low-income students and others with additional needs, and $1,800 per kindergartner. The latter swelled to $2,900 per kindergarten student with the passage of the 2017 keno bill, or about 20 percent of the real per pupil cost.

If Watters’s bill becomes law, the state education trust fund, some of it coming from taxing local property owners, will be responsible for coming up with the $1,100 per pupil promised by keno backers. So be it. It would be honest, predictable funding that doesn’t prey on the dreams of the poor.

Watters’s bill also means a steady, dedicated source of revenue for school building aid. Taxpayers, especially those in property-poor districts, can’t afford to replace antiquated schools without state help. An education is a state, not a local, responsibility. The budget the governor announced last week includes a one-time expenditure of $64 million for school building aid but that’s probably one-tenth or less of what it would take to ensure that all of the state’s students attend modern schools.

Keno is now played in 160 bars, restaurants and clubs in 66 New Hampshire cities and towns. Another 26 towns will vote on whether to allow the game to be played in their community at next month’s town meetings. Even if every community in the state said yes to keno, the revenue would never cover the true cost of kindergarten.

And the more the state won, the more its poorest residents would lose.

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