House leaders scramble for votes on gambling

State News

June 18, 2009

Ronnie Ellis The Richmond Register Thu Jun 18, 2009, 08:25 AM EDT

They did not have a bill. They did not take a vote.

The House Licensing and Occupation Committee on Wednesday heard about two versions of a proposal to allow video lottery terminals at horse tracks.

House Speaker Greg Stumbo, D-Prestonsburg, sponsor of a previous measure to allow the slots at the tracks, Speaker Pro Tem Larry Clark, D-Okolona, and Rep. Harry Moberly, D-Richmond, explained differences in Stumbo’s proposal and one to be offered by Gov. Steve Beshear.

But, neither bill has been filed as the governor and House leaders scramble to find 51 votes in the House to pass the measure.

Moberly’s role was to explain the newest twist to the effort to secure enough votes -- Stumbo’s plan to use some of the state's portion of slots revenues to construct up to 150 or so new schools, schools deemed “dilapidated” by the state, according to Moberly.

On Tuesday, Stumbo told House members revenue from the slots could be used to replace about 16 “category 5” schools, those in the worst condition, and even up to as many as 144 “category 4” schools -- if they vote for the measure. He sweetened the pot some more on Wednesday, adding some $450 million for projects for universities.

In all, Stumbo said, the construction plan could cost as much as $1.3 billion with an annual debt service cost to the state of $143 million.

Stumbo has maintained many of the category 4 schools are misclassified and are in bad enough shape to be in category 5 and thus are priorities for state funding to build replacements. He said the plan he is proposing, what he calls a “stimulus construction plan,” will provide enough revenue to replace all 170 or so schools in both categories and lawmakers can choose to have those in their districts replaced.

“If you believe your category 4 schools were not properly categorized and they should have properly been in category 5, then you come and see me and we’ll reclassify them,” Stumbo said.

But, only if the lawmaker votes for the VLT bill.

“Well, it’s not going to get built, it’s not going to do any good if the bill doesn’t pass,” he said. He would not say whether a school in the district of a lawmaker might still be built if the bill passes without that lawmaker’s vote.

Also testifying on behalf of the bill was Nick Nicholson, CEO of Keeneland, who said without the revenue for the tracks, increasing purses and breeders’ incentives from the slots bill, year-round racing in Kentucky is doomed.

“If the status quo in Kentucky remains, we will not have a year-round racing circuit,” Nicholson said.

He said seven casinos in Indiana located on the Kentucky border had combined revenues of $1.44 billion last year and a significant portion of that came from Kentucky residents. And Indiana is using those dollars to lure away the horses previously stabled and raced in Kentucky.

“Allow Kentuckians to do what they want to do and stay home to do it,” Nicholson said, and allow the horse industry to preserve Kentucky’s premiere status as horse capitol of the world.

But Martin Cothran of the Family Foundation and Say No to Casinos disputed Nicholson’s dire picture, quoting articles this past week in the Lexington Herald Leader which showed the number of foals in Kentucky has increased, racing handles have increased and attendance has increased in recent years. He conceded the industry faces troubles, but expanding gambling isn’t the answer he said.

“You don’t kill a fly with a sledge hammer,” Cothran told the committee, “and there are other proposals.”

He referred to the proposal by Senate President David Williams, R-Burkesville, to tax lottery ticket sales, out-of-state betting on

Kentucky races, and some sales taxes to boost purses and incentives. But Beshear did not include Williams’ proposal on the special session agenda.

Williams said the schools proposal was a form of vote buying. Rep. Tim Firkins, D-Louisville, who has not decided how he will vote said offering projects in exchange for votes on controversial measures is “as old as the process itself. It’s been done before and it’ll be done again.”

But Firkins is concerned that there is no bill before lawmakers after three days of the special session.

“I have not seen the bill they’ll be voting on in tomorrow in committee,” Firkins said.

The bill was not presented to the Licensing and Occupations Committee but will go to the House Appropriations and Revenue Committee Thursday afternoon, according to A&R; Committee Chairman Rick Rand, D-Bedford.

The House did pass two bills on the floor Wednesday – one to create funding authorities for mega-projects and which would allow the use of tolls to finance them and an economic incentives package.

Rep. Jim Wayne, D-Louisville, criticized a provision in that bill which would allow tax incentives and credits to companies which pay wages as low as $9 an hour. He offered a floor amendment to raise the wage to $10.87 an hour. Several rural lawmakers spoke against the amendment, saying $9 an hour were good jobs in counties with high rates of unemployment and the state is borrowing money to fund its unemployment insurance program.

Wayne’s amendment was defeated easily and the bill passed.

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. The Richmond Register is a CNHI newspaper.

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