By RONNIE ELLIS
FRANKFORT — Gov. Steve Beshear told a joint session of the General Assembly it is time for to face “Kentucky’s challenges head on” and do it together – by enacting his proposals for a controversial special session that began Monday. Beshear called his legislative package for the special session a “common sense approach.”
And he said it’s “time for an up or down vote” on expanded gambling.
Senate President David Williams, R-Burkesville, and House Speaker Greg Stumbo, D-Prestonsburg, both complained afterward that they still haven’t seen some of the bills Beshear wants passed.
Beshear is asking lawmakers to approve his plan to cover a projected $1 billion budget shortfall, allow video lottery terminals – electronic slots – at the horse tracks, an economic incentives bill and a way to pay for such mega-projects as bridges over the Ohio River. He has said the horse industry is in crisis and needs the revenues from the slots to boost purses and breeders’ incentives as well as provide more money for the state budget.
He rejected placing on the call an alternative proposal by Williams to tax lottery tickets and use some sales taxes on the horse industry to boost purses and breeders’ incentives without gambling.
Beshear largely a recounted his previous arguments for calling the special session and for the items he included on the agenda. He again spoke of suffering by ordinary Kentuckians in a poor economy: “Kentucky is suffering the devastating impact of a global economic crisis the likes of which many of us have never seen.”
“In these stark economic times,” he said, short-term assistance and long-term investment are required. He said the first goal is to balance the state budget and called his proposal to fix the problem “prudent, conservative solution,” using federal stimulus money, cutting state spending by $200 million, restructuring debt and asking state employees to give up their pay for some state holidays.
“We must manage this shortfall in a way that does not move us significantly backward,” said Beshear. And he said his proposal contains no new taxes. The state raised taxes on alcohol and tobacco products this past spring to cover a $456 million shortfall and lawmakers have said they aren’t eager to do that again.
He said his economic development legislation will lure a NASCAR race and the Breeders’ Cup to Kentucky as well as a car battery facility to Hardin County. He also wants to create an authority to fund such mega-projects as the Ohio River bridges in Jefferson County.
Beshear said if the state doesn’t act now, some horse tracks face the “certainty of closure.” But it isn’t just about the tracks, saying more than 100,000 Kentuckians depend on the equine industry – a figure that is disputed by opponents.
He said Kentucky cannot surrender “our title as the horse capital of the world.” The proposal would also allow a partial credit for taxes on autos and exempt military pay from state taxes, one of the lines which drew applause from the lawmakers. Williams later pointed out that the poor and elderly, many of whom don’t pay taxes, can’t claim such refundable credits. He also noted that while race tracks would receive about 45 percent of revenues from slots, “mom and pop” operations which sell lottery tickets receive only 1 to 2 percent.
In a joint press conference afterward, both Williams and Stumbo said Beshear hasn’t provided legislation that House committees planned to consider Tuesday and Williams again made the case for his proposal, saying it would help the horse industry without the “social consequences” of expanded gambling.
Stumbo acknowledged he advised Beshear to place Williams’ proposal on the call. Lawmakers can only consider items placed on the call by the governor during a special session.
Stumbo said the House is looking at ways to use revenues from the slots at tracks to help fund replacement of category five schools – those classified as in the worst shape. Asked if that were a means of garnering votes for the VLT bill, he said he wouldn’t call it “a sweeteners,” but said its proper for lawmakers to direct how money is spent. Beshear’s bill does not “earmark” how state revenues from gambling will be spent.
Earlier in the day, Stumbo said Beshear will “have to persuade the undecideds” if the gambling bill is to pass the House. Both Rep. Johnny Bell, D-Glasgow, and Rep. Danny Ford, R-Mt. Vernon, said they don’t think the bill will pass.
Both agreed the horse industry is in trouble and the state needs to help. Ford suggested looking at proposals like Williams.
RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com.
