Online gambling

The idea of taxing gambling in Alabama is being sent up as a trial balloon as state government looks down a double-barrel of a lingering recession and retreating tax receipts.

 

With state revenue declining or at a standstill, Paul Hubbert, executive secretary of the Alabama Education Association, and Rep. Richard Lindsey, D-Centre, chairman of the House Education Appropriations Committee, said Tuesday new taxes on gambling might help state budgets in the 2010 budget year.
Lindsey said the $459 million "rainy day" fund for education that voters approved in Amendment 1 on Nov. 4 likely will be quickly used in the coming year.

 

Furthermore, he predicted the education budget in 2010 would probably have to be slashed by $400 million to $500 million.

State school Superintendent Joe Morton said Gov. Bob Riley this month will likely declare proration - budget cuts when revenue falls short - to begin the drawdown of the $459 million. But he agreed with Lindsey that may not be enough to avoid further cuts in the 2009 budget.

 

"If the situation does not improve before April or May 2009 when the Legislature is finishing the fiscal 2010 budgets, education could very likely see a fiscal 2010 budget that is smaller than 2009," Morton said. "This means serious cuts to many programs that have enhanced student learning and Alabama's educational image nationally and internationally. I'm not ready to put an amount on it yet, but at the present prospects look gloomy."

 

Alabama ranks 46th among states in revenue raised from gambling, although gambling, in one form or another, is prevalent throughout the state.

 

In the past fiscal year, the state collected $377,824 from the only gambling law it has, the pari-mutuel pool tax - a 1 percent tax on dog race track owners on the pari-mutuel pool on all races.

 

Lindsey said Riley "missed a golden opportunity" early in his first term by failing to take on the gambling interest and raise revenue from it.
"I hope (the Riley administration) will take a leadership role. It will not be an easy issue," he said. "It would be a very difficult issue. No issue is easy, but it would be well worth the time and effort to try and be successful."

 

Lindsey said the first step would be to bring all the affected parties together.

 

"We're trying to float some ideas (on gambling taxes) to (the Riley administration) and legislators," said Hubbert. "We've had some conversations with the administration."
Alabamians overwhelmingly rejected a state lottery in 1999, but since then lotteries have been established in Tennessee and casinos operate in Mississippi. Florida and Georgia also have lotteries.

 

Gambling also has popped up all over the state since 1999 - from Dothan to Walker County. It includes greyhound dog tracks in Birmingham, Mobile, Eutaw and Shorter, an Indian casino in Atmore, and bingo operations thriving across the state.

 

Some of the operations are protected by state law, and those operated by Indians are protected by federal law and exempt from state taxes.

 

"It's here but we're not getting revenue from it," Hubbert said. "It makes no sense to me to allow it to continue. If it can't be put out of business and it's not going away, there's the question of why others are getting tax money off of it and we're not."

 

Jeff Emerson, Riley's chief spokesman, said he was unaware of any discussions about gambling legislation.

 

"Gambling comes up every year, and the Legislature spends so much time arguing over it that more important issues like ethics reform never get debated," he said. "Governor Riley urges legislators not to waste time on efforts to expand gambling and instead focus on more important matters like the ethics reform proposals he has introduced."

 

Meanwhile, Emerson said tax collections for November were mixed, but there was some positive news.

 

"Tax collections from individual income taxes grew over 7 percent compared to last November, which reflects the good news on our employment front," he said. "Sales tax collections, however, decreased by 2 percent compared to last November."

 

Meanwhile, Riley was among 40 governors who met with President-elect Barack Obama in Philadelphia about federal aid to states. Riley was there to represent Alabama's concerns over Medicaid funding.

 

The governors want Congress to authorize a two-year increase in the federal share of Medicaid, the health program for low-income people. The need for assistance is growing as state revenues shrink.