LEXINGTON, KY - As a result of a nearly $1 billion projected general fund shortfall and a quarter of billion shortfall in the road fund, governor Steve Beshear said in a statement from his office late Friday he will bring the legislature back for a special session starting June 15.
"It is the largest budget shortfall in modern Kentucky history. And it represents the third year in a row that projected revenues have not met projected needs in our state," said Beshear in a statement released following the latest projections by the Consensus Forecast Group, an independent group of Kentucky economists. "There will be pain associated with further spending reductions, on top of the nearly $600 million we've already cut in the past 18 months."
Over the next few days Beshear said he will work on a budget proposal to address the $996 million shortfall for the General Fund and a $239.1 million shortfall for the Road Fund in the next budget year and then officially call back the legislature.
In a special session the legislature can only address items in the official call set forth by the governor. While Beshear's statement did not mention any specifics as to how the budget shortfall will be addressed, expanded gaming has been a main area discussed by legislators and the governor.
Fellow Democrat and Speaker of the House Greg Stumbo has set forth a plan to allow racetracks in the state to house Video Lottery Terminals (VLTs) or video slots on-site. Projections of the VLTs see nearly $1 billion in annual gross to be brought in, which at a tax rate of around one third, could bring between $300 million and $400 million in new monies to the state.
But questions linger as to whether the state has the authority to allow VLTs at racetracks without a constitutional amendment that requires a statewide vote and can only be brought before the electorate in a even year general election. Most opinions by previous Kentucky attorneys general have said it would take a constitutional amendment to expand gaming in anyway, but the most recent opinion on the matter issued by former attorney general, and now Speaker Stumbo, states the legislature has the authority to allow racetrack VLTs.
Regardless of how courts would rule if asked to do so, Beshear and Stumbo would still have to get Republican Senate President David Williams to agree to call expanded gaming to a vote in his chambers and to have enough votes in the Republican majority. Williams has stated numerous times in the past there aren't enough votes to approve gaming in the Senate