Frankfort, KY – In the days leading up to his budget address, any time Gov. Steve Beshear was asked if he would include gambling dollars in his spending proposal...
"My answer, each of those times, was the same," says Beshear. "Everything, everything is on the table."
But when it came time to deliver his speech, Beshear said his analysis of funding options is over and the conclusion is clear.
"Gaming revenue is the only practical option to begin funding long-term priorities with recurring revenue," says Beshear.
The governor's new, two-year spending plan relies on $780 million in revenue from video lottery terminals at horse tracks. And while protecting basic school funding, higher education, health care and public safety, the budget also requires 2% cuts in many state agencies to raise another $78 million. And Beshear warns against using cuts alone to balance the budget.
"The cuts to the rest of government won't be 2% over the biennium," says Beshear. "Instead, those cuts will be over 12% in the first year of the biennium and 34% in the second year, compared to the current year. And that's on top of the 20%-to-25% in cuts that many of these agencies have already experienced in the last two years."
What about a second round of federal stimulus dollars? Is that a possible solution to the state's $1.5 billion dollar deficit?
"My budget office is monitoring that situation very closely," says Beshear. "But the bottom line is, we cannot control what happens in Washington, and thus my budget doesn't count on that money."
And for those who say broad-based tax increases could be a new source of recurring revenue, Beshear says that's a road he's not willing to travel.
"That would accomplish the exact opposite of what we need during these difficult times," says Beshear, "by increasing the burden on the very people and the very businesses that we're relying on to grow us out of this recession."
So, for Beshear, casino gambling is the state's best source of new revenue. And he wants lawmakers to approve a bill similar to the one that passed the House last summer, but died in Senate committee.
"The only difference in the content of this year's bill and the House bill of 2009 is where the revenue is allocated," says Beshear. "I propose bringing the revenue into the General Fund to help balance this budget and fund our priorities."
Sponsoring the new gaming bill is Senate Minority Leader Ed Worley. Can it pass the Senate?
"Well, you know, until something's brought to the floor of the Senate, we really don't know exactly what can pass there," says Worley. "We have said for a long, long time, if you bring the statutory amendment to the floor of the Senate, we believe the votes are there to pass it. I've been told, on both sides of the aisle, of people who will vote for that bill who then the leadership says that they won't. So, we'll just have to see. If something gets to the floor of the Senate, we can count the votes."
The governor's budget proposal disappoints Republican Rep. Danny Ford.
"The General Assembly had not approved expanded gaming in the past and I'd thought we could move beyond that and it looks like we haven't," says Ford.
And Democratic Rep. Fred Nesler just wants to get down to work on the budget.
"We'll look at it, dissect it, tear it up, put it back together, hopefully make a decent budget to send down to the Senate," says Nesler.
Lawmakers now have 50 days to try to reach a final budget agreement.