colorado community college headmaster grossly overestimated revenue to sell ammendment 50 to Colorado voters.

New gambling revenue falling far short of forecastBy Andy Vuong The Denver PostPosted: 12/20/2009 01:00:00 AM MST

Nancy McCallin, president of the Colorado Community College System, says community colleges may receive just $2 million to $3 million from gambling taxes during the first year of new games and table limits. The 2008 ballot measure that eased gambling regulations was pitched as a way to bolster the ever-slimming budgets of the state's community colleges.

Much of the additional tax revenue generated from higher bet limits, 24-hour gambling and new table games would go to the schools, an estimated $29 million during the first year and $222 million over five years."Anything that's going to add over $200 million over the next five years . . . is very good for us," Nancy McCallin, president of the Colorado Community College System, said in November 2008 shortly after it was disclosed that voters had approved Amendment 50.

Now, more than five months after the gambling changes took effect in July, McCallin says community colleges may receive just $2 million to $3 million from gambling taxes during the first year. Despite a sparkling first month, the Amendment 50 changes — which came as gamblers were cutting back on casino trips amid the economic recession — haven't boosted revenue by nearly as much as initially projected.

A Denver Post analysis based on the first five months of data shows colleges could receive $4.4 million during the first year, if business stays at the current pace."We knew that it was going to be a year where we didn't have a whole lot of information, and so we knew that any of the projections were going to be a guesstimate, at best," McCallin said last week.Community colleges won't receive gaming funds until September. As required by the measure, the money has to go toward classroom instruction and financial aid.McCallin said she won't make plans on how that money will specifically be used until May, when the budgeting process for fiscal 2011 begins.

This year, state funding for community colleges was cut from $142 million to $106 million, though much of that was made up with one-time federal funding, she said.For fiscal 2011, community colleges face an $11 million cut, with no assurance that federal funding will cover the gap."That's happening the same time when our enrollment is surging, so we're going to see some substantial cuts next year," McCallin said.

Casino revenue is up 8.5 percent this fiscal year, which began in July. Industry officials initially projected growth of 20 percent to 25 percent.In November, only Black Hawk casinos saw a revenue gain, posting a 13 percent increase, according to data released last week by the Colorado Division of Gaming. Central City and Cripple Creek casinos each reported declines of about 5 percent.

Even with lower-than-expected revenue from the changes, there are concerns among historic-preservation officials that community colleges are set to receive too much of the gambling tax. When voters approved casino gambling in Black Hawk, Central City and Cripple Creek nearly two decades ago, the intention was to use the tax revenue to help restore and preserve the historic mining towns.Dan Love, president of the board of directors of Colorado Preservation Inc., said community colleges stand to receive "a disproportionately large share" of the revenue.

As it stands now, existing recipients of gambling tax revenue, which include the state historical fund and general fund, would receive $97.7 million this fiscal year (a 3 percent increase from fiscal 2009), before regulatory expenses are subtracted. Anything generated above $97.7 million is earmarked for Amendment 50 recipients, with 78 percent going to community colleges and the rest going to the various casino cities and counties.

With a projected $106 million in gambling tax revenue for fiscal 2010, based on five months of data, Amendment 50 recipients would receive $8.3 million, before regulatory and other charges. After those charges, the Amendment 50 pot drops to an estimated $5.7 million."We weren't doing this for a single increase in funding," McCallin said. "We were in this for the longer term. And longer term, we know that the gaming industry will turn around as the economy turns around and we'll see increased revenue."