Could legalizing marijuana or casinos solve Kentucky's pension crisis?

Courier Journal

FRANKFORT, Ky. — A law to help control Kentucky's $43 billion pension debt has been struck down, triggering more discussion on new forms of revenue – such as legalizing casino gambling or even recreational marijuana.

Attorney General Andy Beshear, a Democrat who is running for governor, is one who says casinos and other new forms of gambling can generate the money needed by the troubled pension plans.

Don’t bet on it. Here’s why.

Casinos

A constitutional amendment asking voters to legalize casino gambling and earmark its profits – estimated at $250 million or more a year – for pensions was introduced at this year’s session. It went nowhere.

It’s sponsor, Rep. Jerry Miller, R-Eastwood, said, "I couldn’t get near the votes I needed. I got about half the votes I needed.”

And former Democratic Gov. Steve Beshear tried – and failed – repeatedly to pass casino gambling during his 2007-15 administration. Current Republican Gov. Matt Bevin says he’s opposed and calls the idea a “sucker’s bet.”

Opinion:Kentucky lawmakers who are against casinos aren't pious - just dumb

Still Republican Rep. Adam Koenig, of Erlanger, who chairs the House Licensing, Occupations and Administrative Regulations committee, thinks it’s got a shot and said he’ll push for a gambling bill.

Beyond the pension system's needs, Koenig said the proliferation in Kentucky of venues for betting on historical horse racing machines — such as Derby City Gaming in Louisville — "gives us a good argument that we already have casinos.”

“We’ve got a shot, but it needs to be a bipartisan effort,” Koenig said.

Another big question – one lawyers in the legislature disagree on – is whether legalizing casinos requires a constitutional amendment or can be done by simply passing a bill.

A constitutional amendment requires a three-fifths vote in each chamber of the legislature to pass. And if it passes in the 2019 session, the matter would be put on the ballot for voters to decide, but not until the November 2020 election.

Sen. Morgan McGarvey, a Louisville Democrat who supports expanded gambling, said if a simple bill is passed legalizing casinos, it will surely be challenged as unconstitutional in court where the matter would be tied up for a couple years.

"That's why I prefer passing a constitutional amendment. I still support it. We're losing money now that's now going to improve Indiana's schools ... But it didn't get enough votes this year and I don't see that changing next year."

Sports betting

This is in play. Details of how this would be operated have yet to be hammered out. (At specific locations or also online? Which sports? Would you allow betting on college sports? There are plenty of aspects to consider.)

“There’s some potential for this, but a lot of questions have to be answered,” said Sen. Chris McDaniel, a Taylor Mill Republican who chairs the budget committee.

Senate Majority Leader Damon Thayer, R-Georgetown, said he supports sports betting and sees it as the same type of wagering as betting on horses, which has been a Kentucky tradition.

But Thayer said sports betting is no answer to the multibillion-dollar pension crisis. He said the estimates of new revenue produced by sports betting range from $9 million to $35 million a year.

McGarvey said, "Sports betting has a shot ... West Virginia and Mississippi have just done it."

Read this:Bevin says he's open to hearing sports betting law proposals

Marijuana

Thayer, Miller and McDaniel each said a bill legalizing recreational use of marijuana has no chance.

Bevin has said repeatedly he strongly opposes legalizing recreational use of marijuana and that if any such bill gets to his desk he will veto it.

At his community forums across the state, Bevin jokes that to pay off the state's massive pension debt, "Everybody in Kentucky would have to smoke as much they possibly could for 600 years ... I’m not sure that’s really the right solution.”

Rep. Jason Nemes, R-Louisville, has said he will sponsor a bill on medical marijuana – allowing doctors to use it to treat patients they believe can be helped by it.

Nemes said he believes a medical marijuana bill has a "fair chance" to pass, but that it is not a money maker. "It’s a bill to help people who are sick and it should not raise money” for the state, he said.

Tom Loftus: tloftus@courierjournal.com; Twitter: @TomLoftus_CJ. Support strong local journalism by subscribing today: courier-journal.com/toml.