, Corbin, KY

February 18, 2013

Stumbo suggests instant racing as way to fund pension systems

The Times-Tribune

CORBIN — By Ronnie Ellis

CNHI News Service

Democratic House Speaker Greg Stumbo, D-Prestonsburg, suggested Friday that Kentucky should use state proceeds from instant racing to fund the state’s badly underfunded pension systems.

The suggestion came on the same day that the Lexington Herald-Leader reported Keeneland thoroughbred racetrack has joined with a Nevada-based casino company, Full House Resorts, to purchase land near Corbin and open a quarter horse track there.

Part of that deal is to purchase Thunder Ridge harness track in Prestonsburg and reinvent it as a quarter horse track with instant racing at the new Corbin site.

Also on Friday, Democratic Sen. Johnny Ray Turner, also of Prestonsburg, filed a bill which would resolve the legality of instant racing which is currently before the state Supreme Court.

Instant racing or “historical racing” was approved by the Kentucky Horse Racing Commission in 2010. Betters place bets on races which have already been run. But the better doesn’t know the results of those races, placing bets and watching the race using a machine similar to slot machines.

A Franklin Circuit judge ruled such games constitutional because bets are placed into a pari-mutuel pool, but the ruling was challenged and the issue is presently awaiting a ruling from the Supreme Court. Turner’s bill would end any question of the legality of instant racing.

Stumbo said if the Keeneland-Full House Resorts deal goes through, the purchasers “would make Floyd County whole,” referring to bonds the county issued to build Thunder Ridge.

Turner told The Courier-Journal those bonds were a factor in his decision to file the bill, a decision he apparently made after learning of the Keeneland and Full House Resorts would purchase Thunder Ridge.

Stumbo said if instant racing, which is already underway at Dueling Grounds in Franklin and Ellis Raceway at Henderson, were expanded to all the tracks, the state could realize between $25 million and $30 million which the state could then apply to unfunded liabilities of the pension funds.

Kentucky’s various pension funds face unfunded liabilities exceeding $30 billion. The Senate has passed a bill sponsored by Sen. Damon Thayer, R-Georgetown, which is based on the recommendations of a bi-partisan tax reform which studied the pension problem last year.

That bill would place new employees into a hybrid-cash balance play while retaining current benefits for existing employees and retirees. It would also end cost of living adjustments for retirees. The bill affects state employees but not the teachers’ retirement fund.

But a key recommendation of the task force is that the legislature begin next year making the full annually required contribution (ARC) to the pension funds — about $327 million next year. But while the Senate bill adopted the other task force recommendations, it only states the legislature’s “intent” to fully fund the ARC. It does not specify from where the money will come.

Stumbo has repeatedly said he wants a “dedicated funding stream” before the House approves the Senate bill. He has mentioned raising the cigarette tax for that purpose as well as talking Friday about the possibility of revenues from instant racing.

Senate President Robert Stivers, R-Manchester, and Thayer were cool to Stumbo’s idea. They have maintained the ARC can be funded next year through predicted revenue growths, without new taxes or new revenues.

“It seems as if the Speaker is kind of like throwing anything up and seeing what will stick because yesterday he was all for a cigarette tax,” Stivers said. “Now he’s changed to racing. So I’d like to be what he’s going to be for on Tuesday when we return.” (The legislature is off Monday for Presidents’ Day.)

Stivers said the Senate would be reluctant as well to get involved in a matter already before the courts.

“We have been pretty consistent (in the Senate) in my 16 or 17 years that, while things are in litigation, the legislature shouldn’t involve themselves,” Stivers said. “If you attempt to do that, you are influencing the courts, so the best course of conduct is to just to refrain and let the natural course of the legal system take its course and go from there.”

Ironically, Thayer has previously sponsored bills to allow instant racing and he welcomed the idea of a new facility like that planned for Corbin.

But he echoed Stivers’ comments about a different idea every day on pensions from Stumbo.

Late Friday afternoon, Stivers issued a statement concerning expanded gambling as well, saying the Republican caucus discussed the issue but Republican Senate leadership concluded there wasn’t sufficient sentiment or time to address it in a short session.

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at Follow CNHI News Service stories on Twitter at