2 issues loom big as Ky. lawmakers return for start of 2010 legislative session

Ky. lawmakers prepare to tackle budget, gambling

FRANKFORT, Ky. — Lawmakers are scheduled to convene Tuesday for the start of a legislative session that will be overshadowed by a looming financial crisis and a continuing push to legalize casino-style gambling in Kentucky.

Kentucky faces a $1.5 billion shortfall over the next two years, and, with little sentiment for tax increases, pro-gambling forces are pushing the notion of putting video slot machines at horse tracks to generate revenue for state coffers.

Democratic Gov. Steve Beshear is calling for bipartisan cooperation to find solutions to the financial woes. He said he’s open to all suggestions, except a broad tax increase that he fears might drive the state further into recession.

“The issues that confront this state right now are much greater than partisan politics,” Beshear said. “These aren’t Democratic issues or Republican issues. These are Kentucky issues.”

A panel of Kentucky economists predicted in December that the state also will have to deal with an additional $100 million budget shortfall in the current fiscal year. That’s in addition to some $800 million in cuts that have already been made to the current budget.

The ramifications are major for both recipients and providers of government services. Layoffs among the state’s 34,000 employees remains one option for trimming costs.

Republican Senate President David Williams said he considers personnel cuts necessary to balance the budget. Beshear hasn’t gone that far, but neither has he ruled out layoffs.

Beshear is holding out hope that Congress might approve another round of federal stimulus money to help Kentucky and other hard-hit states balance their budgets. Though the idea is being floated in Washington, it faces opposition and can’t be counted on.

Bolstering revenue with tax increases doesn’t appear to be an option, either. Both Beshear and Williams are resistant, and House Appropriations and Revenue Committee Chairman Rick Rand, D-Bedford, said it appears lawmakers are in no mood to raise revenues through tax hikes, either.

Fears about tax increases go beyond fears of worsening the recession; they also could be politically damaging with 119 legislative seats up for election this year.

Some legislative leaders see gambling as a revenue generator, but it remains politically charged and carries potential ramifications for lawmakers seeking re-election.

The idea is to legalize video slot machines so that they can be installed at the state’s horse tracks. By some estimates, legalizing slots, then taxing the proceeds, has been estimated at having the ability to raise $200 million to $350 million a year.

“I have not decided my plans for pursuing gaming in this legislative session,” Beshear said. “But it is clear that we must explore every possible avenue for growing revenue where we can, short of broad-based tax increases.”

Williams said he doesn’t think the slots proposal has enough support to pass either the Senate or the House.

Because of the financial problems, Beshear said he will have “a fairly limited” legislative agenda. He said he intends to focus most of his attention on guiding the state through the fiscal crisis.

However, Beshear said he intends to get behind some proposals during the 60-day session, including a bill being pushed by several lawmakers to ban text messaging while driving.

“I have already issued an executive order banning state employees from texting while operating state vehicles, and a statewide restriction is a logical extension,” he said. “Part of our job is to find ways to help keep Kentuckians safer, and these bills are a good start.”

Other proposals up for consideration include one from state Rep. Joni Jenkins, D-Louisville, to make cockfighting a felony, and one from state Sen. John Schickel, R-Union, to exclude tapes of 911 calls from the open records act.