Wednesday, July 23, 2003

N.Ky. officials leaning to gambling

Gas tax also on list to avert state budget cuts

By Patrick Crowley
The Cincinnati Enquirer

ERLANGER - Concerned about dwindling state tax dollars, Northern Kentucky's top elected county officials Tuesday made their strongest statements yet in support of expanded casino gaming and an increase in the state's gas tax.

Without new sources of revenue coming out of Frankfort, county governments will be faced with potential cutbacks in public services while being unable to fund important road and other projects, the judge executives of Boone, Kenton and Campbell counties said during the 14th annual State of Northern Kentucky address.

"The biggest threat to the well-being of our constituents is the failure of state government to make a budget that adequately and intelligently provides for the needs of our citizens," said Campbell County Judge-executive Steve Pendery. "When there are state budget problems, there a 1,000 small cuts that bleed counties."

"The state," Boone County Judge-executive Gary Moore told the crowd of 225 gathered at Receptions banquet hall, "has to meet its responsibilities."

To that end, the judge-executives said, state lawmakers may have to address two revenue-generating ideas they have ducked in recent years: expanding casino gambling to Kentucky's thoroughbred race tracks, and increasing the state's 15 cent a gallon gas tax to pay for road projects.

The stance on gaming and taxes varied somewhat among Pendery, Moore and Kenton County Judge-executive Dick Murgatroyd. Moore is less enthusiastic about expanding casino-style gambling to racetracks such as Turfway Park in Boone County.

But even tacit support for gaming and the gas tax is a clear political signal that the region's top county elected officials are ready to push state legislators toward bolder options as dollars continue to be scarce.

For the past two legislative sessions, bills have been filed in Frankfort by, among others, House Majority Caucus chairman Jim Callahan, D-Wilder, that would allow Kentucky's thoroughbred racetracks to offer casino style gambling. Gambling, proponents say, would allow racetracks to better compete with Indiana and Illinois riverboat casinos while providing an estimated $400 million a year in new revenue for state and local programs.

The bills have died without a vote.

Murgatroyd said the issue should be put before voters in the form of a constitutional ballot issue.

"It's not going to be the answer to all of our prayers," he said. "But I think we have to be realistic. ... And in order for us to protect (the thoroughbred) industry that is so critical to this state, we've got to put them on a level playing field."

Pendery said money generated by gaming could not only help the racing industry but also provide money for county services, such as the cost of operating jails.

"Jails are killing us financially," Pendery said. "In Campbell County our subsidy to the jail has grown by $1 million since I took office in 1999 - and jail costs are over $3 million a year."

Moore, who draws support from a large base of conservative Republicans generally opposed to gambling, was the most guarded about expanding gaming, calling it a "tough issue."

"There are so many unknowns" about gambling, Moore said, including how the social costs might affect Kentucky communities.

Moore also said he is concerned that most of the money generated by gambling would go to casino operators elsewhere, and that most of the tax money would go to Frankfort rather than staying in the community.

But Moore did express some support for an increase in the state's gas tax, a notion that Gov. Paul Patton has floated over the years. But each time Patton has raised the issue, it has been shot down by mainly Republican lawmakers in Frankfort.

Moore said more revenue is needed for the state's road fund because there is not enough money for projects on the local level. He used the example of the proposed rebuilding of Ky. 237 in Hebron, a project that includes reconstruction of just three miles of roadway at a cost of $25 million to $30 million.

"We don't have those kinds of resources," Moore said.

Pendery and Murgatroyd also said it's time for a gas tax increase to be considered.

But the three judge-executives - all of whom are Republicans in their second terms - may not find much support for tax increases or gaming from the GOP's gubernatorial ticket.

Republican Steve Pence - who is running for lieutenant governor with gubernatorial candidate Ernie Fletcher - attended Tuesday's breakfast but expressed little backing for a gas tax hike.

"There is no question the state is in some economic hard times, and (the judge-executives) make some very valid points regarding our need to balance our budget and have sufficient revenues to meet our needs," Pence said. "That being said, no economy has ever taxed its way into prosperity. If we approach this problem as simply a tax-and-spend issue, we're simply going to higher taxes and still stay in debt."

Pendery did mention that the gas tax should be considered as a component of overall tax reform and a discussion of how to increase state revenues.

"The Fletcher-Pence team will look at first where we can cut wasteful spending and spend smarter, not just more money," Pence said. "The reality of the situation is we are going to have to have the sufficient revenues to meet the needs of our communities just as the judge-executives were saying."

On gaming, Pence said Fletcher "does not believe gaming is necessary at this time."

Democratic gubernatorial candidate Ben Chandler has also said he is opposed to any tax increases and believes the gaming issue should be decided by the voters and not the legislature.


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