Democratic strategist James Carville knows something about Kentucky politics. He was the campaign adviser to the late Wallace Wilkinson during his 1987 run for governor when Wilkinson's call for a state lottery catapulted him from nowhere in public opinion polls to a landslide victory.
One year later, 60% of Kentuckians voted in favor of Wilkinson's lottery proposal in a statewide referendum, largely because they were led to believe lottery revenue would be earmarked for public education. But that wasn't part of the constitutional amendment's language, and revenue instead went into Kentucky's general fund. Seventeen years later, Kentucky ranked 45th of 50 states in per capita revenue raised for public education.
A solution to Kentucky's public education challenge comes in the form of a newly proposed constitutional amendment that again would require a statewide referendum. This proposal, calling for casino gambling at racetracks, is the top priority for the horse industry's lobbying branch, the Kentucky Equine Education Project.
The proposal specifies where revenue from racetrack casinos would go, with public education the biggest winner. The estimate for annual gross revenue from the racetrack casinos is $1.25 billion, and the proposed 35% tax rate would yield $437.5 million in revenue to the state and local government programs. Forty percent of the $437.5 million ($175 million) would go to public education, with 20% ($87.5 million) directed to health care, 12.5% ($54.7 million) to local governments, 10% ($43.7 million) for economic development in counties where there would be no racetrack casinos, and the remaining 17.5% ($76.7 million) going to a variety of other programs.
Racetracks would receive 49.35% ($616.9 million) of gross gaming revenue to pay for capital improvements and all expenses related to operations. Another 14.65% ($183.1 million) would go toward purses and breeding incentive programs for Thoroughbreds and Standardbreds, and 1% ($12.5 million) would be earmarked for non-racing breeds.
This year's 60-day session of Kentucky's general assembly will be the first time KEEP--established in May 2004--has pushed for the "Keep It in Kentucky" constitutional amendment, so named because it is estimated that Kentuckians who crossed into Indiana and Illinois last year spent $671 million on casino gaming.
KEEP, with representation from racetracks and horse owners in all 120 Kentucky counties, has done an outstanding job educating elected officials and the general public about the importance of the horse industry to Kentucky through an aggressive advertising campaign. Its Political Action Committee has raised more than $100,000.
Considering KEEP's growing influence and the importance of the horse industry to Kentucky's economy, you might think approval by the Kentucky House and Senate for a referendum would be a sure thing. Other states with far less reliance on racing and breeding have approved measures bringing additional gaming to racetracks. And remember, KEEP is not asking legislators to approve casinos at racetracks; it is only asking them to give Kentuckians a right to vote on the issue.
Yet insiders feel they are fighting an uphill battle to win approval for the ballot referendum in the Republican-led Senate and Democratic House during the 2006 session, where party politics are likely to stall numerous legislative issues.
When the aforementioned Carville advised Bill Clinton in his 1992 presidential run, he coined a term--"It's the economy, stupid"--that helped turn the tide in Clinton's favor.
Why is there a good chance that logic might not prevail on the casino gambling issue during Kentucky's 2006 general assembly? Carville might suggest, "It's the politics, stupid."