Are Pensions Wild Card in KY Gambling Debate?

Are Pensions Wild Card in KY Gambling Debate?
Photo: Anne M. Eberhardt
Two lawmakers in leadership positions in the Kentucky General Assembly said Dec. 10 the issue of expanded gambling remains on the table, but whether a bill materializes for the legislative session that begins in January depends on Democratic Gov. Steve Beshear.
 
There is a wild card, however. Action is expected on a plan to fund state pensions, and both lawmakers–Democratic House Speaker Greg Stumbo and Republican Sen. Damon Thayer–agreed a dedicated funding source is a better option than raising taxes.
 
Stumbo and Thayer spoke during the Kentucky Chamber of Commerce annual legislative agenda gathering in Lexington. Thayer, the incoming majority floor leader after a recent Republican caucus vote, filled in for Senate President-elect Robert Stivers, an attorney who was called away on other business.
 
Stumbo said the major issues for the upcoming General Assembly session could include pension funding, special tax districts, Medicaid, and expanded gambling. But he also noted the 2013 session, as in every odd year, is only 30 days–22 or 23 days if procedural days are left out of the equation.
 
"It's not like large-scale controversial legislation will be adopted," Stumbo said. "We're more likely to see a debate on these issues without resolution, and perhaps a special session (later in the year)."
 
The discussion frequently turned to unfunded pensions, which Thayer said is about a $30 billion liability across all systems in the state. A task force recently made recommendations on how to address the pension issue, but many hinge on an increase in taxes.
 
Stumbo said a hike in the cigarette tax and a 1-cent increase in the sales tax may fly, but other recommendations may not receive widespread support. He also noted there isn't a lot of extra money in Kentucky, where 62-63 cents of every tax dollar goes toward education, and another 22-23 cents goes toward health and human services.
 
"A more realistic way to (address the pension shortfall) is to find a fair funding source that can make these payments," Stumbo said.
 
"I echo the speaker's sentiment that we have to find a dedicated source of revenue," Thayer said.
 
Whether gaming ends up in the mix remains to be seen. Earlier this year Beshear, working in bipartisan fashion with Thayer, introduced a constitutional amendment on casinos in the Senate. It cleared the Senate State and Local Government Committee, which was chaired by Thayer, but died on the Senate floor.
 
Thayer said he wouldn't sponsor a gaming bill again, but he fully supports expanded gambling via constitutional amendment. Stumbo didn't say he opposes the referendum route, but he did say he believes it can be accomplished via the legislative route.
 
"I think the House should take a crack at it," said Thayer, who as majority floor leader will control which bills are heard on the Senate floor. "The governor is a Democrat, and the House is Democratic. I would like to see the governor start a bill in the House.
 
"I think the votes are there–or close to being there–if the governor wants to push it."
 
If a constitutional amendment on expanded gambling were to pass next year, it couldn't be on the statewide ballot until 2014. Thus, it wouldn't necessarily have to be introduced in the regular session if a special session was scheduled later in the year.
 
As for the Kentucky Chamber of Commerce, earlier this year it held a press conference at the Capitol in support of the gaming bill. According to a 2013 legislative packet, its position hasn't changed.
 
The chamber touted the Kentucky horse industry and said it is struggling to maintain its status as the "Horse Capital of the World" due to its inability to compete with other states that have "pro-gaming, equine-friendly policies." The chamber said it "strongly encourages" Kentucky lawmakers to authorize alternative gaming to assist the horse industry and recoup money lost to neighboring states that permit casino-style gambling.
 
The Family Foundation of Kentucky has been the leading opponent to expanded gambling, saying it taxes those who can least afford it. Proponents claim casino gambling is a voluntary tax in that individuals have a choice to enter a gambling establishment.

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