Those who follow the Kentucky General Assembly each session know the issue of casino gaming is not new to our state. Lawmakers have spent over a decade considering bills to allow casino gaming in the commonwealth, either by a constitutional amendment approved by a majority of Kentucky voters, or by a vote of the General Assembly. Neither path has been successful—yet.
With billions of dollars in state services cut since 2007 in Kentucky because of the recession and more cuts—perhaps totaling as much as $300 million or more—expected by some lawmakers over the next two years, proponents of casino gaming believe more Kentuckians may favor casino gaming in Kentucky than ever before. One of these optimists, naturally, is longtime casino gaming supporter Gov. Steve Beshear.
I’m sure you have seen news stories of late that report Beshear’s intention to push the casino gaming issue through the upcoming 2012 Regular Session. The news should be expected, given the governor’s recent reelection and his belief that casino gaming would be a big revenue boost for the beleaguered state. Some estimates show casino gaming at Kentucky race tracks alone could bring Kentucky over $500 million in tax revenue over a five or six-year period. Considering the our state might be facing $300 million or more in additional state budget shortfalls over the next two fiscal years, an extra $500 million or more could save quite a few state services
But the issue of casino gaming continues to be divisive. Those who are for it, like the governor, say it will bring millions of dollars to a state economy that continues to face millions of dollars in budget shortfalls amidst a weak economy. Those who oppose it, on both sides of the political aisle, say it promotes poverty and gambling addiction.
Divisions aside, the moment does seem ripe to revive the issue in legislative session, and for two reasons: the state’s seemingly unending economic woes, and the launch of expanded gaming in Kentucky this year with the introduction of instant racing at Kentucky Downs. The instant racing games at the southern Kentucky track have been very popular, despite an ongoing court challenge brought against the games, and Kentuckians are quite frankly tire of losing services, retirement benefits, and progress in education and other areas to what appears to be a perpetually-strapped state budget.
Still, passing a constitutional amendment to allow casino gaming in Kentucky or any other attempt to authorize casino gaming here is no sure bet— no pun intended. It will take a lot of work on the part of the governor, pro-expanded gaming lawmakers and supporters outside of the Capitol to make casino gaming a winner in the next session.
While lawmakers consider the pros and cons of gaming for yet another session, we will also likely find ourselves once again debating whether to pass a statewide smoking ban for indoor public places throughout Kentucky.
We Kentucky lawmakers have considered a statewide smoking ban in the past with mixed results. While an attempt to ban smoking in all enclosed workplaces across the state including all bars, restaurants and gaming facilities failed to receive a committee hearing in the Kentucky House during the 2011 Regular Session, the effort raised awareness of the issue in communities like Bowling Green and Corbin (both with recently enacted smoking bans) and other communities statewide.
Dozens of cities and counties in Kentucky—at least 31, at last count—have banned smoking in most if not all indoor public places in their communities in recent years, and many state and private colleges and universities have gone smoke free. But a vocal group of Kentuckians say more needs to be done to reduce smoking statewide. These proponents of a statewide ban say prohibiting smoking in all indoor public places in Kentucky is the key to reducing the number of current and future smokers in the commonwealth, and improving the state’s health.
Not everyone, including all Kentucky lawmakers, is on board with the ban. Those who oppose a statewide smoking ban feel, among other things, that banning smoking should be a local decision. We will have to wait and see how the issue is addressed in the coming months in session.
Another issue that appears ripe for discussion next session is possible reinstatement of Kentucky’s estate tax, which has not been collected in full for a decade because of its direct ties to the currently phased-out federal estate tax. A 10 year phase out of the federal estate tax beginning in 2001 has cost Kentucky about $40 million a year in inheritance and estate tax receipts, according to the State Budget Director’s office. Kentucky’s revenues for coming fiscal years could “be impacted negatively,” based on one legislative summary, if the federal government continues to revoke the state credit against the federal tax.
To prevent further loss of state revenue, some lawmakers favor what is called “decoupling” of Kentucky’s estate tax from the federal estate tax. Decoupling would allow the state to only receive revenue from receipts on relatively large estates that are passed to heirs after the receipts are paid. Opponents say such a move would result in a tax increase since state estate tax receipts would have to be paid by estates instead of being “picked up” from federal estate receipts as a credit. This is another issue we will all be tuned into in the coming months.
I will share more issues facing the 2012 General Assembly with you next week. Enjoy the New Year’s festivities and stay tuned.