The Kentucky House budget committee has advanced a bill designed to provide extra revenues for the state's underfunded pension systems.
House Bill 416 would use revenues from the expansion of Instant Racing if the state Supreme Court upholds the legality of the game. It will also use expanded lottery sales and the proceeds from a new Keno game.
House Speaker Greg Stumbo says the bill does not ask lawmakers to legalize Instant Racing.
"We're simply saying if it is upheld, here is a fund that captures this money that's used to pay off this unfunded liability in our pension fund. So we're not asking you to vote to expand gaming," said Stumbo.
Lawmakers won't pursue a 6 percent tax on lottery tickets as a source of revenue to shore up Kentucky's financially troubled pension system for government retirees.
House Speaker Greg Stumbo said that idea was rejected out of concern that a tax might stifle sales of lottery tickets that generate money for education programs in Kentucky.
Instead, Stumbo said lawmakers will unveil legislation on Tuesday that will call for the lottery to create new games, including Keno, that he said could generate about $25 million for the pension system.
He said the legislation would also call for tax revenue from slot-like machines, called Instant Racing machines, at horse tracks to be designated for pensions. He said that could eventually net $100 million a year for pensions.
Lawmakers are looking to the lottery for a source of revenue to shore up Kentucky's financially troubled pension system for government retirees.
Rep. Brent Yonts, chairman of the House State Government Committee that oversees pensions, said Friday the latest proposal would institute a 6 percent sales tax on lottery ticket sales and implement new games, which could include Keno.
The Greenville Democrat said a lottery tax could generate $49 million a year and that adding more games could generate $70 million to $90 million. He said those actions could be enough to cover the state's full contribution to the pension system, which has a $33 billion unfunded liability.
Yonts' committee is scheduled to vote on pension legislation next Tuesday. The House Appropriations and Revenue Committee would vote separately on the lottery proposal.
Kentucky lawmakers have passed the halfway point in the current legislative session without a deal in sight to shore up the financially troubled pension system for government retirees.
They have only 14 working days remaining before adjourning for the year. However, Gov. Steve Beshear has said he may call lawmakers back into special session if they adjourn without taking action to bolster the pension system, which has a $33 billion unfunded liability.
The Senate passed a measure earlier this month that requires the state to fully fund the pension system but that did not specify where the money would come from.
The House is considering a variety of options to pay the state's contribution, including raising the cigarette to $1 a pack to generate about $100 million a year.