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Lawmakers to receive details on Lottery cuts

CHARLESTON, W.Va. -- State Revenue Secretary Bob Kiss told Senate Finance Committee members they will be receiving a detailed breakdown of Gov. Earl Ray Tomblin's proposal to cut about $39 million in state Lottery appropriations in the 2014-15 budget.

Sen. Ron Stollings, D-Boone, said legislators are being approached by those that would take some of the largest cuts under the bill, including thoroughbred and greyhound racing interests and cities and counties with racetrack casinos.

"I had no doubt you would be approached," Kiss said of the cuts to percentage appropriations that are built into state Lottery laws (SB385).

In the 2012-13 budget year, the so-called statutory transfers totaled $226.8 million, with subsidies for the thoroughbred and greyhound racing industries amounting to $87.6 million and payments to racetrack counties and cities totaling $40.4 million.

Tomblin's bill would cut funding for those and most other statutory transfers by 15 percent.

"Keep in mind, they will still be receiving 85 percent," Kiss said.

Lottery Director John Musgrave noted that when the Legislature first put the percentages into law in the early days of the Lottery, they may have anticipated annual payments much smaller than what they ultimately grew to be with expansion of gaming statewide.

"These dollars have almost become a handout, if you will," he said.

Kiss said that while some of the funds would be available to close gaps in the state budget, more important, they would stabilize debt ratios on numerous bonds backed by Lottery revenue, assuring that the Lottery's bond rating will not drop below its current AAA rating.

"The more important part of that bill is to be able to continue to support bonding from Lottery funds," Kiss said.

Musgrave told the committee that the state's share of total Lottery profits peaked in fiscal 2006-07 at $592.8 million, and has been dropping since, as more than a dozen competing casinos have opened in Maryland, Ohio and Pennsylvania.

In the current budget year, the state's share of profits is projected to come in at $394 million.

In response to a question from Sen. Clark Barnes, R-Randolph, Musgrave said the Lottery has not looked at the possibility of licensing a casino in Mercer County, in the southeast corner of the state, to draw players from Virginia, most of North Carolina and South Carolina, where there are no competing casinos.

That would require a change in the current law, he said, which limits the Lottery to issuing five casino licenses -- four for the existing racetrack casinos and one for The Greenbrier resort.

Reach Phil Kabler at philk@wvgazette.com or 304-348-1220.


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