With millions of dollars flowing into the Show-Me State to battle over ballot initiatives related to gaming, we wanted to provide a deeper dive into where the proceeds go in both Missouri and Kansas.

Currently, gaming programs are classified according to the two regulatory agencies they fall under:

Missouri Gaming Commission regulates casinos, fantasy sports, and charitable games;

Missouri Lottery regulates traditional lottery games sold at retail establishments;

Kansas Lottery Commission regulates the lottery, legalized sports betting, and fantasy sports;

Kansas Racing and Gaming Commission regulates state-owned casinos and race tracks;

Additionally, Kansas has several tribal casinos regulated by the Kansas State Gaming Agency, while Missouri does not currently have any tribal gaming facilities in operation.

In both states, the first cut of revenue generated by lottery sales and gaming operations goes to funding the operational expenses of the regulatory agencies and the funds dedicated to problem gambling treatment and prevention programs. After that, the states diverged in how they used funds.

Kansas

The state authorizes four state-owned casino operations managed by independent casino operators who are taxed 21.9% of their adjusted gross revenue to fund state infrastructure improvements, to reduce state debt, and for general revenue purposes.

In 2023, this totaled $36.7 million for the state. 

See more details here.

The state directs sports betting revenue to a dedicated fund to attract a professional athletic team franchise. It divides lottery revenue between the economic development and workforce preparation fund, construction & maintenance of correctional facilities, support for veterans and mental health services, and the state general revenue fund.

In 2023, the Kansas Lottery generated $85,000,000 for these programs.

See more details here.

Missouri

Supporters of the proposed sports betting amendment claim that the initiative will generate millions of dollars for education, while opponents have compared the idea to Missouri’s lottery program, which provides revenue that the Missouri General Assembly uses to help fund education programs in the state. 

Currently, the Missouri Constitution authorizes 13 casino operations in the state, which must be located on the Missouri or Mississippi River. Each casino charges a $2 per patron admission fee, which is divided equally between the home dock location and the state.

In FY24, Missouri’s casino admission fees generated $6.3 million for the Missouri Veterans Commission, $5 million for the Access Missouri Financial Assistance Fund, and $4 million for the Missouri National Guard Trust Fund.

Additionally, Missouri’s casinos are taxed at 21% of their adjusted gross revenue, which goes to the “Gaming Proceeds for Education Fund.”

In FY24, casino operations generated $357.5 million for the fund, which helped fund Missouri’s elementary and secondary education programs.

Read the Missouri Gaming Commission's Annual Report

The state divides revenue from the lottery between the Department of Elementary & Secondary Education, Department of Higher Education and Workforce Development, and Missouri Department of Agriculture, including nearly $241 million for the education foundation formula, $74 million for school transportation, $19.5 million for special education services, and $94 million for community and state colleges.

Supplant vs Supplement

A frequent complaint about Missouri's gaming and lottery revenue earmarked for education is that proponents sold it as a "supplement" to General Revenue (GR). However, the money actually "supplants" revenue and frees up GR for other purposes.

For example, the roughly $9.8 billion budget for the Department of Elementary and Secondary Education (DESE) includes approximately $4 billion in General Revenue, $3.7 billion in federal funds, and $2 billion in "other" funds (i.e., grants, tobacco settlement funds, trusts, specially-designated funds, and, of course, Lottery and Gaming proceeds.

In total, proceeds from the Missouri Lottery will provide Missouri's education programs with more than $537 million, and revenue from casinos will provide Missouri schools with $335 million in FY2025.

This revenue funds several newer programs within DESE, including the Grow Your Own program to attract graduates to teach in their home districts (100%), recovery high school programs for students in recovery from a Substance Use Disorder (100%), Teacher Recruitment & Retention State Scholarship (100%), and the Virtual Schools Program (66%). 

Whether Kansas or Missouri is "supplementing" or "supplanting" General Revenue with proceeds from gaming and lottery is a complex question. Many programs would go unfunded without gaming proceeds or pull dollars away from other priorities. Without new revenue sources, lottery and gaming will remain vital to maintaining balanced budgets.

Missouri News

DESE is still playing catch-up on subsidy payments

Dr. Pam Thomas updated the childcare subsidy backlog at the State Board of Education’s (SBOE) October meeting. While  (DESE) officials reported that they would not make their end-of-October goal to make all providers whole on missing payments, they said staff had made significant progress since the last meeting.

Since our last update a month ago, DESE payment corrections have increased from 35% to 58%, family application processing from 98% to 100%, and provider contracts processing from 65% to 99%.

Dr. Thomas reported that subsidy-related call volume has decreased, and they hope to resolve outstanding payment issues by the end of November.

Access the Child Care Subsidy: Backlog Status Report.

DESE did request a waiver from the U.S. Department of Health and Human Services Administration for Children and Families to meet current Child Care and Development Fund rules to secure additional budget requests, revise agency policies, and complete data system changes.

State board outlines legislative priorities for 2025

SBOE officials discussed the board's priorities for the 2025 legislative session as outlined below:

• Supporting continued funding for early childhood education
• Continued funding of literacy initiatives related to the science of reading
• Continued funding for school innovation and workforce support initiatives
• Full funding of the Foundation Formula to maintain the increase in starting teacher salaries at $40,000 for bachelor's degrees and $46,000 for master's degrees
• Funding for the Safe and Healthy Schools initiative
• Continued funding of the Teacher Recruitment and Retention State Scholarship Program
• Full funding of school transportation line items and adjustments to formula weights to maintain equity in the formula calculation

SLPS dysfunction continues to plague district



Last month, we reported that the St. Louis Public Schools board voted to terminate its contract with Dr. Keisha Scarlett over concerns related to her district's financial management. This month, Scarlett lost her appeal to reclaim her job, and the board decided to end her tenure with the district formally.

Meanwhile, at SLPS's Vashon High School, teachers petitioned school administrators protesting "dangerous conditions within the building." They called on officials to address insufficiencies in staffing related to the high-stress environment in the building. Reporting for the St. Louis Post-Dispatch, Blythe Bernhard wrote, "Of the 37 teachers at Vashon, only 15 are certified."

Kudos to Corches

Kara Corches has been named President and CEO of the Missouri Chamber of Commerce and Industry, the state’s largest and most powerful business association. Coaches is currently the Interim President, CEO, and Senior Vice President of Governmental Affairs. In that role, she led the advocacy efforts for the Child Care Tax Credit package, which passed the House with a vote of 133-20. Although the bill stalled in the Senate, Corches was instrumental in driving a new narrative around the business case for early care and education and securing bi-partisan support for incentivizing childcare. She is the first female to lead the chamber in its 101-year history.

And since we are on the topic of childcare, here are five numbers you should know:

• $11,582 - The average cost of child care in the United States.
• 65% of children five and under have all available parents in the workforce, meaning they may need child care. 
• 89% of voters want candidates to have a plan to help working parents afford quality child care, including 80% of Republican and 99% of Democratic voters. 
• $122 billion - The annual amount the national economy loses due to childcare challenges, including lost earnings, productivity, and revenue.
• 51 - Number of states (and Washington DC!) covered in the FFYF child care fact sheets - find your state and learn more here.

Budget and Revenue Update

Section 33.220 of the Revised Statutes of Missouri requires state agencies to submit budget requests each year in October. The Governor reviews these requests and presents the executive budget recommendations to the General Assembly in January 2025.

The Department of Elementary and Secondary Education is requesting a $497 million increase to the foundation formula for FY26 to implement the recalcuation of the State Adequacy Target (SAT) from $6,760 to $7,145 and to cover the costs related to several provisions in SB 727 which include:

• payment for full-time virtual students
• the phase-in for paying on a combination of attendance AND enrollment
• an increase in Pre-K eligibility
• an incentive for schools to maintain a calendar of at least 169 days
• changes in the treatment of local revenues in the state funding formula

Missouri's Budget Director Dan Haug announced that September 2024 state revenue collections increased 2.9 percent compared to September 2023, from $1.21 billion last year to $1.24 billion this year.

Net general revenue collections for 2025 fiscal year-to-date declined 4.0 percent compared to September 2023, from $3.14 billion last year to $3.02 billion this year.

In other news

• State audit finds no fraud in Hannibal school despite district's weak finances
• Former St. Louis School Board member banned from district property
• State Board of Education sets its legislative priorities for next session
• SPS launches new elementary report cards this month — without letter grades
• Critics question political donations from WWT founder amid ongoing IT issues
• St. Louis Schools head into uncertainty following superintendent’s ouster
• Missouri works to futureproof its workforce pipeline
• Community colleges across St. Louis region focus on career training
• MU researchers awarded $8M in grants to find bullying prevention strategies

Kansas News

School chief shares data highlights

At the monthly State Board of Education (SBOE) meeting, Commissioner Dr. Randy Watson presented highlights from the 2023- 2024 Annual Report - Momentum.

Some of the critical data points shared include:

• Student enrollment has decreased by a half percent per year, with Hispanic student enrollment by approximately the same amount.

• The population of students with disabilities has grown by about 4%.

• The graduation rate has improved from 86% to 88%; the target remains 95%.

• 73% of Kansas jobs require a post-secondary certificate or degree; however, only 37% need a bachelor's degree or higher.

• Chronic Absenteeism rose from 13.2% in 2018 to 19.8% in 2024.

Don't give up on college just yet

Speaking of those jobs that require a college degree, Governor Laura Kelly announced her 2024 Kansas Economic Report this month, which shows growth in the state's labor workforce. With regard to industry and occupational projections, occupations requiring a post-secondary degree are expected to add the most jobs over the next eight years.

Board to receive literacy update at November meeting

At the state board meeting in November, members will discuss legislative priorities for next year and expect to approve those at the December meeting. Potential discussion areas include academic support, health and safety, funding, and education policy governance.

KSDE staff will update the Kansas State Board of Education on efforts to enhance literacy instruction statewide. The report will include information on LETRS training for teachers and administrators and the initiative to sustain structured literacy by training local facilitators. It will also address the Kansas School Improvement Model and how KSDE and partners support school districts in prioritizing literacy instruction. The discussion will cover the development of action plans within the new Kansas Education Systems Accreditation process, focusing on structured literacy, standards alignment, balanced assessment, and quality instruction. Lastly, KSDE will report on collaboration with the Kansas Board of Regents and higher education partners through the Kansas Blueprint for Literacy.

New literacy requirements for teachers coming in 2028

Starting July 1, 2028, Kansas veteran educators teaching in reading-related positions will be required to demonstrate proficiency in the science of reading to renew their professional licenses. See more details here.

In other news

• Governor Kelly waives childcare licensing and background check fees
• November election could shift Kansas State Board of Education to the right
• “No More Lines Coalition” calls for an end to school district boundaries
• Phone ban could be the new norm in Kansas schools

Aligned Case Study - Visiting Scholars

Teaching certificate brings professional expertise to high schools

In Cape Girardeau, high school students can learn basic flight skills from a U.S. Air Force veteran and receive healthcare instruction from a nurse practitioner with a master’s degree.

“They are both excellent, excellent teachers who bring … a wealth of knowledge to the table,” said Libby Guilliams, former director of the Cape Girardeau Career & Technical Center (CGCTC). “But I don’t think we would have gotten them if they had to go through the regular, traditional (teacher certification).”

The same goes for the marketing teacher skilled enough to have students take over the center’s social media accounts from an outside paid contractor, said Guilliams, who remains involved with the center as a student advisor for Mineral Area College.

All the instructors came to the center as Visiting Scholars. The Missouri Department of Elementary and Secondary Education (DESE) program allows school districts to hire industry experts for up to three years on one-year renewable contracts at the high school level. 

Download the complete case study.

Did the rich (schools) get richer?

Last week, the Edunomics Lab at Georgetown's McCourt School of Public Policy released an update outlining how ESSER spending shortchanged high-poverty schools even though the feds doled out relief funds based on the Title I formula.

So why didn't the money go to the neediest? The folks at the Edunonmics Lab explained, "When relief funds came, many larger districts started hiring new staff – new teachers, counselors, reading coaches, administrators. Openings got filled in each district’s wealthier schools first, sometimes drawing candidates away from other lower-income schools elsewhere in the district."

Read the rest of their analysis in their newsletter.

Aligned is partnering with Georgetown University to bring the Certificate in Education Finance course to the Kansas City area next June.

Topics within the finance field of study addressed in the program include allocation and accountability structures, instruction delivery model implications, ESSA and state policy effects in a local context, productivity analyses, and common (but often ill-understood) cost drivers in education. Participants earn 3.0 CEUs, 36 CPEs, and/or 30 professional development credits upon successful program completion.

Download our brochure to learn about sponsorship opportunities.

Register to attend the in-person event.

Education Next recently published additional research from Edunomics that suggests that while there are no silver bullets for school spending, there are five lessons on how to make money matter more in schools.

Aligned recently was featured in the Washington Post in a letter stressing that now that the dust has settled on ESSER spending, we must evaluate which spending decisions worked and which failed to deliver.

We will be back again next month with some key takeaways from the 2024 election regarding the potential education landscape in the statehouses of Kansas and Missouri.

There is less than a week left of political ads and unwanted text messages. Woo hoo!

All the best,

Torree Pederson

President

Aligned

Torree@WeAreAligned.org

(913) 484-4202

Linda Rallo

Vice President

Aligned

Linda@WeAreAligned.org

(314) 330-8442

About Aligned

Aligned is the only state-wide non-profit, nonpartisan business group working in Kansas and Missouri on educational issues impacting the full development of our children, from supporting high-quality early learning to solid secondary programs that provide rigorous academic programs and real-world learning opportunities.

Our vision is that our public education systems in Kansas and Missouri have the resources and flexibility to prepare students to pursue the future of their choice.

We are currently focused on education policies that will strengthen early childhood education, teacher recruitment and retention, and school finance reform.

Learn more about our work.