Legalize casinos to pay for pensions? Kentucky lawmakers look to pass gambling bill in 2018

FRANKFORT, Ky. — Gov. Matt Bevin’s proposed 2018-20 state budget starkly illustrates Kentucky’s desperate need for more revenues and state lawmakers must take a close look at the option of legalizing casinos.

That’s the pitch supporters of legalizing casino gambling made Thursday at a press conference at the state Capitol Annex – the reason why they believe the measure that has failed year after year in Frankfort has at least an outside shot at passage this time

“It’s going to be hard and it’s going to take people contacting their legislators and saying ‘I want to vote on this because I think Kentucky needs more revenue,’” Rep. Jerry Miller, a Louisville Republican who sponsors the proposed constitutional amendment legalizing casinos, said in an interview prior to the news conference. “It’s much more palatable than a tax increase.”

Sen. Morgan McGarvey, D-Louisville, said, “The reason this idea has been on the radar for years is that we know we’ve been headed towards very bleak budgets. Well, we’re there now. The budget we’re looking at this year is dire and that has greatly increased the appetite for revenue options.”

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The two lawmakers acknowledge the odds are still against them. Bevin has consistently argued that societal costs make the proposal “a sucker’s bet” and he has said he will propose a comprehensive tax reform measure to address the revenue problem – either later in the current legislative session or at a special session later this year.

Opponents expect the measure to fail again. "I don't think its chances are any better this year," said Tom Troth, lobbyist for the Kentucky Baptist Convention. "I expect most legislators still agree that this is a terrible way to implement public policy and a favor to multi-national gambling interests. ... There are other revenue alternatives without the social costs."

Miller last week filed House Bill 229, which is a proposed constitutional amendment that would legalize “casino gaming” in Kentucky with all of the revenues generated for the first 20 years dedicated to Kentucky’s ailing public pension systems.

“This would free up tax dollars now going to pensions to be spent on other things in the budget,” Miller said.

He and McGarvey say while some estimates are much higher, they believe casinos can be expected to generate about $250 million per year for the pension systems.

Because the bill is a constitutional amendment, it will need the votes of three-fifths of the members of each chamber (60 of 100 House members and 23 of 38 senators) to pass. Governors cannot veto a constitutional amendment. So if it passes, it would go on the November ballot for voters to approve.

Miller and McGarvey said they decided against also filing “enabling legislation” – a companion bill that would spell out details of how the new gambling operation would work – how many casinos could open, where they would be located, whether horse racing tracks would get a casino license, etc.

But Miller said enabling legislation proposed during the administration of Gov. Steve Beshear stalled because of disagreements over the details. “We decided not to muddy the waters. We decided: Let’s first find out if the people want it,” Miller said.

Legislators who joined Miller and McGarvey at the news conference included Rep. Adam Koenig, R-Erlanger; Rep. Phil Moffett, R-Louisville; Rep. Jason Nemes, R-Louisville; and Sen. Dan Seum, R-Fairdale.

One longtime advocate who was not in attendance was Rep. Dennis Keene, the chairman of the House Democratic Caucus from Wilder, who favors spelling out the rules for how the casinos would be set up in enabling legislation. He has filed both a constitutional amendment and enabling legislation.

“I’ve been supporting this forever and I’m happy they (Miller and McGarvey) are doing it because we need a new revenue stream,” Keene said. “But I believe it’s just a constitutional amendment I don’t know that it would pass.”

Miller and McGarvey spoke at the press conference Thursday along with executives of Greater Louisville Inc. and the Northern Kentucky Chamber of Commerce, which back the measure as one that will create new jobs. Leaders of groups representing county governments, retired teachers and professional firefights also were on hand to endorse the amendment.

Supporters said arguments made in years past are stronger than ever. Kentucky casinos would reverse the traffic of Kentuckians to gamble in casinos of neighboring states, and that numerous gambling options already in the state – like the Kentucky Lottery's Keno game – mean casinos would not create new societal costs.

“We’re not asking people whether they want casinos, we’re asking people if they want to turn around the carloads of cash that are leaving our state on a daily basis,” McGarvey said. “If the voters say no, we’ll stop talking about it in Frankfort and look for other ways to raise revenue.”

Tom Loftus: tloftus@courierjournal.com; Twitter: @TomLoftus_CJ. Support strong local journalism by subscribing today: www.courier-journal.com/toml