Home » KyCIR: Legislators look to expanded gaming to help pension systems

KyCIR: Legislators look to expanded gaming to help pension systems

This article was produced by the Kentucky Center for Investigative Reporting, a non-profit newsroom based in Louisville. 

Louisville, Ky. – State legislators are once again being called upon to allow casino gambling in Kentucky as a way to pump revenue into the ailing pension systems for public employees.

Expanded gaming has been pushed during legislative sessions for years as an answer to Kentucky’s financial woes, but it’s never gotten enough traction to pass.

That doesn’t mean the supporters will stop pushing. On Tuesday, Greater Louisville Inc. announced its support for a bill proposed by two Louisville state senators. In a news release, GLI noted that Kentucky loses tax revenue each year to casinos in bordering states. (Read KyCIR’s “How Kentucky Money Fuels Cross-Border Casinos, Other State Budgets“)

“These are dollars that could be going toward our state deficit and our significant pension obligations,” GLI President Kent Oyler said in the news release.

Here’s what you should know about the new gambling bill:

1. Under the proposal, 90 percent of revenue brought in under the expansion of casino gambling would go to the pension funds for state workers and teachers. The Kentucky Retirement Systems and the Kentucky Teachers Retirement Systems have only a fraction of the money they need to make future payments to retirees.

But expanded gaming supporters estimate the state loses about $546 million in revenue to neighboring states that have casinos.

Gambling tax revenue2. Illinois, Indiana and Ohio raked in a total of $3.9 billion in taxes over 10 years at eight casinos just across state lines on the north bank of the Ohio River, according to a 2015 story from WFPL’s Kentucky Center for Investigative Reporting.

3. The issue might be a nonstarter in Frankfort.

Republican Gov. Matt Bevin and many other top Republicans are skeptical of funding state projects through gambling. The legislation may not require Bevin’s support, although he isn’t necessarily expanded gaming’s greatest obstacle.

The proposal before legislators is a constitutional amendment, which means 60 percent of each legislative chamber would have to vote in favor of it to pass. Bevin would not have an opportunity to sign or veto.

But Senate President Robert Stivers has reiterated his misgivings with the policy, saying that neighboring states that have allowed casino gambling have had mixed results. The Republican-controlled Senate didn’t take up the bill the last time it was proposed in 2014.

If expanded gaming passes the General Assembly, voters would have to approve the measure in a statewide referendum.

The bill filed this year has bipartisan support; it is co-sponsored by Sens. Morgan McGarvey, a Democrat, and Julie Raque Adams, a Republican.