Kentucky Gov. Steve Beshear said May 29 he will call a special legislative session to deal with “the largest budget shortfall in modern Kentucky history,” but stopped short of saying he will put racetrack gaming on the agenda.
Beshear, in a statement released after the Consensus Forecasting Group said Kentucky faces a $996-million gap in its general fund, and indicated the special session would begin June 15. The next budget year begins July 1.
Economic forecasters also said the state’s road fund is $239.1 million short on cash.
“It is the largest budget shortfall in modern Kentucky history,” Beshear, a Democrat, said in his statement. “And it represents the third year in a row that projected revenues have not met projected needs in our state—also an unprecedented occurrence. It is our responsibility to address this challenge, and do so quickly.
“Agencies and departments throughout state government that provide vital services need time to adjust their budgets. School districts have to make decisions before the start of another year. Universities and other areas that depend on us need time to plan. By law, the legislature and I must approve a new budget.”
Beshear said he will issue the “call”—agenda for the special session—in the “next few days,” and also present his budget proposal, which must be voted on by the General Assembly. Only the governor can set the agenda for such a session.
In recent months, Beshear, who in part campaigned on a platform calling for a public vote on casino gambling, repeatedly has said Kentucky’s horse industry needs assistance to maintain its stature in the United States and around the world. The racing industry has lobbied for racetrack gaming, which the governor doesn’t oppose.
Earlier this year, Democratic Speaker of the House Greg Stumbo introduced legislation for video lottery terminals at racetracks. The bill quietly gained support in the House, though it never came up for a vote.
Stumbo told the Lexington Herald-Leader only Beshear can decide whether the issue is included in the special session. The governor’s statement didn’t mention the horse industry.
“There will be pain associated with further spending reductions, on top of the nearly $600 million we’ve already cut in the past 18 months,” Beshear said. “But that’s no different than what families across the commonwealth also are facing. Our priorities will be holding the line on taxes for working families already struggling to make ends meet; maintaining investments in our school children; preserving commitments to the health care needs of our most vulnerable; and the safety of our people.”
Beshear did, however, indicate revenue sources are needed to deal with future spending plans. In the past, he has said gaming is an option.
“How we handle this coming year’s budget will, in large part, determine what resources we have to deal with future budget challenges.”
It’s unclear how much revenue racetrack VLTs would generate for the state given the fact neighboring Indiana has an established casino industry. Kentucky racing officials have said projections indicate about 48% of gaming revenue in the Bluegrass State would come from out of state.
Despite published reports that indicate a lack of legislative support for expanded gambling, racing industry officials have said privately they believe there could be enough votes in the House and Senate. The governor, however, would have to push the issue.