The Attorney General of Kentucky, Andy Beshear has urged lawmakers in the state to look to an expansion of legalized gambling, including sports betting and online poker, as a potential solution to the state’s pension underfunding crisis.
The crisis came to light last month when analysis from Bloomberg found that Kentucky had the largest public pension funding gap and a total pensions liability of $64.9 billion in the fiscal year 2017. Back in April, Kentucky Governor Matt Bevin signed a law designed to tackle the problem, which moved new teachers onto a hybrid cash balance pension plan, rather than the defined benefit plan that was already in place, and that is overseen by the Kentucky Teachers’ Retirement System fund.
But in the same month, Beshear launched legal proceedings against the proposals; a lawsuit is currently being considered by the Kentucky Supreme Court. And now Beshear, who will himself be running for governor in the 2019 state election, says that the newly legal sports betting industry in the US offers a potential solution to the state’s funding crisis. Writing to legislators in the state this week, Beshear proposed expanding gambling and using the resulting revenue to plug the pension hole:
“The solution is not to cut legally promised benefits, but to create a new and dedicated stream of revenue solely for pensions that does not raise any Kentuckian’s taxes.”
According to Beshear, Kentuckians spend over $1 billion in casinos in other states where casino gambling is legal, and that those states are benefitting by around $2.4 billion per year. He called for the Kentucky General Assembly to pass legislation expanding gambling in the state and use all of the tax revenue generated to fund the pension systems.
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