Gaming towns set to feel budget ax, too

By Leslie Jorgensen
THE COLORADO STATESMAN

COLORADO SPRINGS — Maybe Las Vegas can assure that “What happens in Vegas stays in Vegas.” But Colorado’s gaming communities are enraged by Gov. Bill Ritter’s proposal to cut grants to their safety and health programs — and they’re not about to keep quiet about it.

To cover a $320 million shortfall in the state budget, Ritter has proposed slashing $261.2 million from programs funded by the General Fund by cutting the number of state employees and shifting $40.6 million from cash funds to the General Fund. It’s the latter move that has the gaming towns steamed.

According to Rep. Kent Lambert, R-Colorado Springs, the most recently appointed member of the Joint Budget Committee, state government can’t just decide to seize cash funds, which have been set aside by state statutes for specific programs. The cash grab would require a change in the laws — and achieving that might take more luck than a royal flush.

The governor has the power to freeze grant money by failing to award grants — but he’s not able to transfer any of those frozen funds to the cover budget deficits, according the Office of Legislative Legal Services. Legislative Legal Services says money from frozen grants will remain in the accounts at least until the Legislature reconvenes in January. Then the money still can’t be transferred unless the Legislature passes a law to amend the state statutes governing the fund.

But according to the “Governor’s Budget Balancing Plan for fiscal year 2009-’10,” Ritter plans to transfer $40.6 million in cash funs into the general fund.

“This cash fund transfer proposal will require a statutory change,” the plan states.

The Department of Local Affairs apparently missed that step when it posted memos on its Web site and mailed letters suggesting that grants in a few programs had been suspended because the money already had been transferred to balance the state budget.

One of those programs, the Local Government Limited Gaming Impact Program, had been a safe bet for grants to communities impacted by gambling casinos since it was established in 1997. This year, $6.9 million was awarded to gaming communities that had requested grants to offset the cost of boosting law enforcement, medical care services, judicial programs and road improvements necessitated by increased traffic.

DOLA’s notification that the programs were suspended sent a wave of panic through 46 local government agencies and nonprofits in the affected counties that had requested $7.6 million in grants for 2010.

“This came as a punch in the gut!” said David Adamson, executive director of the Mountain Family Health Care Center in Black Hawk.

“These are unusual times. I understand the governor has to balance the state budget, but it’s very short-sighted to take this grant money from communities that need it,” he said.

The center had applied for a $267,589 grant to offset the cost of providing emergency and medical care to people in Gilpin County and parts of Jefferson, Boulder and Clear Creek counties.

Adamson said he was stunned by the Aug. 20 letter from DOLA Executive Director Susan Kirkpatrick stating that no grants would be awarded.

“On Aug. 18, 2009, Gov. Bill Ritter announced a budget balancing plan to close a $320 million shortfall in the current 2009-’10 state budget,” wrote Kirkpatrick.

“As part of this plan, the $5.5 million allocation from the Division of Gaming has been eliminated for the 2009 (Limited Gambling Impact Fund) funding cycle. The Joint Budget Committee will be meeting in September to consider this plan.

“As a result, the 2009 Local Government Limited Gaming Impact Program Cycle has been suspended until future revenues are available,” the letter concluded.

Lambert said the letter made it sound like the grant had already been suspended.

“That’s inaccurate. The grant program cannot be suspended or eliminated without changing the state statutes that mandated,” he said.

Lambert said the JBC is set to meet Sept. 21, but the issue hasn’t been included on the agenda — at least not yet.

“I think the governor will have a real hard sell in the JBC,” he predicted.

According to the DOLA letter, Ritter will ask the JBC to sponsor a bill to amend the law in order to suspend the program during the economic downturn. Ritter’s other option would be to have a Democratic legislator sponsor a bill.

“The JBC isn’t going to run the bill. It would take a unanimous vote of approval, and that’s not going to happen,” said Lambert, vowing to dam the plan by casting a “nay” vote.

Lambert said Ritter’s proposal to “raid money” set aside for grant programs next year might set a precedent. It’s more extreme than transferring end-of-year surplus money from programs to offset budget shortages — a move made by Ritter and some of his predecessors, including former Republican Gov. Bill Owens.

Nevertheless, the cuts are coming, said Senate Majority Leader John Morse, D-Colorado Springs.

“Nobody wants their program to get cut — but it’s necessary in this fiscal time,” he said. “We’re making huge cuts — we don’t have a choice.”

Morse said that the grant fund for gaming communities is one of several programs being cut.

He said that because the gaming fund guidelines are set by state statutes, the Legislature will need to approve a bill to authorize the transfer of money. It will be one of several bills regarding grant-funding sources.

“Those bills are going to pass because where else are you going to get the money?” said Morse.

“Sorry, people! But the well has run dry. Wake up! We have a catastrophe!” he declared.

Morse said local governments will have to find money from other sources, which may require raising taxes at the local level.

The grant program is funded by a small percentage of revenues from the adjusted gross receipts of the casinos, which are paid to the state. It was established to help local governments mitigate the effects of gaming in Cripple Creek, Black Hawk and Central City and in Teller and Gilpin counties.

The grants also are available to Douglas, El Paso, Fremont, Grand, Jefferson and Park counties because gamblers heading to the casinos pass through them. Because there are tribal casinos in Ignacio and Towaoc, grants also are awarded in Archuleta, La Plata and Montezuma counties.

In Gilpin County, loss of the grants would deal a harsh blow.

Since the passage of Amendment 50 in November, wagers have increased to $100 and casinos are open 24 hours every day, increasing the need for watchful public servants. But the proposed grant shutdown threatens to zap the resources that protect the communities affected by gaming.

The aforementioned Mountain Family Health Care Center in Black Hawk would run up at least a $700,000 deficit in next year’s budget if the grants are pulled, says Adamson.

“With the bad economy now, we’re seeing more and more patients. Many don’t have insurance,” the center’s executive director said. “It’s a wacky time to make these cuts.”

The center’s 11-member staff, including two physicians, provides medical care to 2,800 individuals who make 6,000 medical visits a year.

“We’re studying what we can do — cut personnel or services, or both,” he said. “Most health centers in the state are already backed up. People are on waiting lists.”

The health care center, he said, saw a 21 percent increase in patient visits in the first eight months of this year over the same period in 2008. He attributed the jump to the rise in the numbers of unemployed or underemployed residents and to the 24/7 hours, which brought more visits to the casinos.

Gilpin County Administrator Roger Baker said the grant money is critical to public health and safety.

For example, Baker said, the Eagles’ Nest Child Care Center received $197,600 from requests made in 2008. Its request for $124,591 for next year won’t materialize, however, if the governor’s plan prevails.

“Most gaming employee salaries are low, and a lot of children are latchkey kids because of the hours that their parents work in the casinos,” said Baker. “It’s very hard on families.”

He said if the center weren’t available and affordable, more children would be home alone and at risk.

Community leaders are beginning to feel that their safety net is unraveling.

The potential cuts also would be felt by the 1st, 4th, 5th and 6th Judicial District Attorney Offices, which requested a total of $1 million in grants. The offices deal with crimes — from white-collar check-kiting to drunk driving — associated with gaming towns in their jurisdictions.

Of that sum, 4th Judicial District Attorney Dan May requested $454,951 for El Paso County and $92,862 for Teller County operations. Like other grant recipients, May was shocked to learn of the proposed cuts.

“This was a total surprise. There was no forewarning from the governor’s office,” declared May. “This has a huge impact on my operation.”

The grants, he said, have been used to fund nine staff positions that have handled gambling-related crimes since 1993. Since Cripple Creek became a limited gambling community, he said, crime has soared in El Paso and Teller counties.

At a recent gathering of Teller County Republicans, folks fumed over the potential loss of grant money — and grappled with ways to fight the cuts. Like members of other communities and nonprofits, they plan to write letters to the governor and to contact JBC members.

Without the grant money, Teller County government agencies would face a $1.5 million budget shortfall.

The county could lose the $231,142 grant that funds deputy sheriff patrols, $700,000 to repave a stretch of County Road 1 that goes to Cripple Creek and $624,595 for jail operations in Woodland Park.

Also troubling is the loss of more than $367,000 used by four nonprofits that provide health services — Teller County Community Health Clinics, Home Care Hospice, Aspen Mine Senior Club and Community Caring Public Services.

TESSA — originally known as Treatment, Education, Safety, Support and Action — serves both Teller and El Paso counties and requested a $36,295 grant for its mission to assist victims of domestic and sexual violence — the same amount awarded this year. If the nonprofit loses that funding, it will exacerbate problems encountered in 2008, when TESSA sheltered 337 victims and had to turn away another 180 because the facility was filled to capacity.

Court Appointed Special Advocates of the Pikes Peak Region trains volunteers to protect abused and neglected children in court proceedings and during court-ordered parental visitations.

CASA added a Cripple Creek branch to its office in Colorado Springs in 1997. The agency — which has received grants to fund its services for more than 12 years — could face the loss of $104,995 in grants for services in Teller and El Paso counties.

According to El Paso County Commissioner Sallie Clark, the potential loss of funding would force CASA to eliminate 2.5 staff positions, leaving about 90 children without services.

Leslie@coloradostatesman.com