Slots plan would provide up to $700 million for schools

By Beth Musgrave – bmusgrave@herald-leader.com

House Speaker Greg Stumbo, D-Prestonsburg

FRANKFORT — House Democrats hope to use gambling proceeds from slots at racetracks to fund a large-scale program that would spend up to $700 million replacing dozens of the state’s oldest school buildings.

House Speaker Greg Stumbo, D-Prestonsburg, said the proposal would stimulate the stagnant economy and improve schools, but critics suggested that Democrats are simply promising construction projects to lawmakers who agree to support slots.

“What we are suggesting is an economic stimulus construction plan,” Stumbo said.

House Democratic members were shown the plan during a nearly two-hour, closed-door caucus meeting.

It would use tax revenues generated by video lottery terminals to pay off bonds that would fund the replacement of all schools that are 40 years or older, known as category five schools, and some that are 30 to 40 years old, known as category four schools.

There are approximately 16 schools older than 40 years. Another 142 are 30 to 40 years old, including two in Fayette County, according to the Kentucky Department of Education.

The two in Fayette County are Clays Mill Elementary and Mary Todd Elementary.

The total cost to replace all of the category five and four schools is more than $708 million. But Stumbo said it’s unlikely that all of the schools would be replaced.

Under the proposal, tax revenue from slots could be used to pay off a bond to replace all of those schools — roughly $61 million a year. The current slots proposal estimates that they would generate about $298 million in additional tax revenue for the state each year.

Stumbo said House members were asked to look at some category four schools and see if they should be moved to the category five, or the worst category. In addition, Stumbo said the money could be used for other education-related projects, such as new buildings or renovations at state universities and community colleges.

More details of the plan are expected to be released Wednesday at a meeting of the House Licensing and Occupations committee. A bill containing the new proposal has not yet been filed.

The details of the proposed plan came on the second day of a special legislative session called by Gov. Steve Beshear to tackle a projected $1 billion budget shortfall and consider allowing slots at racetracks, among other issues.

Even with the school construction plan, it’s still not clear the slots proposal has enough support to win approval in the Democratic-led House.

Several House members were called to Beshear’s office on Tuesday for one-on-one meetings with the governor.

Jay Blanton, a spokesman for Beshear, said the governor has not yet seen the schools proposal but was supposed to get a copy of the bill on Wednesday. Until the Democratic governor sees the bill, he will not comment on it, Blanton said.

Although some applauded the plan to spend slots revenue, saying it was a way to help the state’s poorest school districts, others said the move was simply a way to buy votes.

Rep. Stan Lee, R-Lexington, called the addition of the school construction dollars to the proposal “shameless.”

“If they really believed in their bill, they should have sent it out clean,” said Lee, who opposes slots at tracks. Lee said lawmakers who vote for the proposal because of a school project should be prepared to explain their vote to their constituents.

“This may be one of the most important votes they take,” Lee said.

Senate President David Williams, R-Burkesville, has said his Republican-led chamber would not vote on a slots bill that earmarked where proceeds from gambling would be spent.

“Obviously the members want to know where the money would go,” Stumbo countered on Tuesday.

Rep. Kelly Flood, D-Lexington, said she believed that the addition of school projects to the slots bill may make people more inclined to support it, noting that many legislators approved the state lottery in 1988 after learning that its proceeds would go to education.

“I think it’s a natural progression,” Flood said. “I think it’s the kind of issue that can motivate people who are sitting on the fence.”

Wilson Sears, executive director of the Kentucky Association of School Superintendents, said his group has not taken a position on the slots bill.

“It’s the legislators’ discretion on how they generate revenue,” he said.

But if the legislature approves the expanded gambling bill, Sears said, “there are plenty of school facilities that need to be replaced or renovated. Some districts have difficulty in bonding. A move like this could benefit the children and certainly would be a worthy goal.”