MONTGOMERY, Ala. — As lawmakers mull over different options to fill the $250+ million hole in Alabama’s General Fund budget, the top Republican in the Senate is floating the idea of covering the shortfall by issuing a bond against the future earnings from a lottery and expanded casino gambling.
Faced with the choices of raising taxes, making hundreds of millions of dollars of cuts, or expanding gambling, Senate President Pro Tem Del Marsh (R-Anniston) has thrown his considerable influence behind the latter.
Marsh’s proposed lottery bill, a draft of which was just released to senators Thursday, would require a vote of the people to approve a constitutional amendment expanding gambling in the state. The vote would take place September 15, two weeks before the end of the current fiscal year.
Though tax revenues from a lottery and casinos would be more than enough the cover the shortfall in the General Fund budget, the money would not start rolling in for months after the law was put in place. As a result, Marsh said that any appropriations bill passed by the legislature in the next few weeks will not count on gambling funds.
“We’re going to pass a budget that will not be counting on any gaming revenue,” Marsh told Yellowhammer Friday morning. “It will be a bare-bones budget. If the referendum passes, the governor can call a special session and we can go back and do more funding on the agencies that got cut, or we can just wait it out until the next cycle and deal with those revenues when they do start coming in. I’m not going to pass a budget that relies on revenue we don’t have.
“We’re going to continue to streamline and rightsize government,” he continued. “There’s no doubt that Republicans by and large do not want increased taxes.”
To avoid raising taxes, Marsh proposes issuing bonds, using the future lottery and casino money as collateral once the constitutional amendment is passed.
Once the bond is repaid, any funds from the proposed 13 percent tax on casino earnings would be funneled into the General Fund, while lottery revenues would be placed in a trust until the legislature convenes to decide how they are to be appropriated.
Marsh’s bill would also form an Alabama Lottery Corporation to administer the lotto, and the Alabama Lottery and Gaming Commission to oversee all gambling in the state.
He says he expects to work overtime this weekend to have a final bill to officially introduce and get in committee by Tuesday.
While Marsh may have the support to shuttle his proposal through the Senate, he may run into trouble in the House, where Speaker Mike Hubbard leans toward accepting the $250 million bailout offer floated by the Poarch Creek Indians earlier this week.
“The question is, do you want to go in and give a monopoly to the Indians, but it doesn’t have any job creation component, or any economic development?” Marsh said in response to that proposal. “If we’re trying to look at long term solutions, which option is better to deal with that?”
Should Marsh’s proposal make it through both chambers of the legislature, it will face significant opposition from evangelical Christian groups who have campaigned against gambling expansions in the past. One such group, ALCAP, is already drumming up its supporters for a fight.
Governor Robert Bentley has also indicated that he will not support using gambling revenues instead of tax increases to balance the budget.
However, recent polling seems to indicate that public opinion leans in the direction of a lottery.
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— Elizabeth BeShears (@LizEBeesh) January 21, 2015
