LAPEL — While at least one local government is using a gambling tax windfall to pay for educational programs, officials around Madison County are using much of the funding to lessen the blow of bad budgetary times.

Since Hoosier Park began offering electronic slots and table games last June, the additional gaming activity has resulted in $2.9 million in state-mandated support for the county and its 15 incorporated cities and towns.

For a town like Lapel, where officials operate with an annual budget of $525,000, the $40,000 from Hoosier Park had a noticeable impact.

“It’s huge to our little town,” said Clerk-Treasurer Tom Tudor. “In fact, it’s just a large, large amount of money.”

Not all the money has gone to cover existing expenses. The Lapel Town Council voted in August to direct a quarter of its slot machine money to after-school programs, and the South Madison Community Foundation agreed to match a portion of the town’s contribution.

None of the money has yet gone to schools, Tudor said, and the Town Council is expected to vote next week on whether to continue earmarking some money for education.

While some of the remaining slots money helped pay general expenses, Tudor said, most is going into a new reserve fund.

“It was not included in the budget, because we didn’t know how much money it was going to be,” he said. “There’s every intent to put the vast majority of this money into a rainy-day fund, because none of us know what the actual financial impact is going to be from the caps on property taxes.”

When the Indiana General Assembly approved electronic slots at Hoosier Park, it also required that 3 percent of Hoosier Park’s slots revenue or up to $8 million a year be directed to Madison County governments. Those payments have been coming monthly since late July, with each government’s share based on its population.

On top of its fee to local governments, Hoosier Park paid out more than $28 million in state gaming taxes and gave millions of dollars to support the horse-racing industry and the casino operations in French Lick, Hoosier Park spokeswoman Tammy Knox said.

Many communities have used their money from the racino to pay general expenses and expect that in 2009 the slots money will help offset property tax losses and rising expenses such as fuel.

For the 10 homes in River Forest, an independently incorporated community on Anderson’s west side, the $575 in slots money is helping pay for street repairs, a major component of River Forest’s $6,000 annual budget, council member Fred Phelps said.

And in Country Club Heights, $1,438 helped fund police and fire coverage for the community’s 41 homes, Clerk-Treasurer Jack Robinson said.

“That little bit helps because it keeps our property taxes down that we have to charge our residents,” he said.

Larger communities are using the money to help keep their budgets balanced.