Marsh files gambling bill; House GOP backs Poarch compact

The leader of the Alabama Senate on Tuesday introduced legislation to create a state lottery, establish casino-type gaming at up to four locations in the state and encourage the governor to enter a gaming compact with the Poarch Band of Creek Indians.

Senate President Pro Tem Del Marsh, R-Anniston, framed the proposal -- a constitutional amendment that will need voter approval -- as a way to save the state's troubled General Fund budget without raising taxes. Marsh also pointed to an Auburn University Montgomery study his office commissioned that suggested the plan could create 11,000 new jobs.

"Do we raise taxes or do we find new sources of revenue?" Marsh said at a Tuesday press conference. "We have hundreds of millions of dollars leaving this state to fund gaming facilities in other states."

The proposal, largely unchanged from draft legislation Marsh circulated to senators last week, will be the spear point of the first major push for gambling legislation in the Legislature in over five years. Minutes after Marsh's press conference concluded, the Alabama House Republican Caucus endorsed a budget plan that included seeking an "agreement" with the Poarch Band of Creek Indians, who have offered to give the state $250 million to address next year's budget woes in exchange for a monopoly on gambling.

The plans will likely run into opposition from Gov. Robert Bentley, who has endorsed a $541 million revenue plan and has said gambling will not solve the state's long-term budget problems. Bentley would not have an official role in the passage of a constitutional amendment and has said that he would not oppose a public vote on the issue. However, Bentley would be responsible for negotiating a compact with any tribes.

Jennifer Ardis, a spokeswoman for Bentley, said Tuesday the governor's staff has met with the Poarch Band about the possibility of a compact, but said no agreements had been reached and that they were looking to House Speaker Mike Hubbard, R-Auburn, for more information on the tribe's offer. Ardis said the office had "a lot of questions" about the Poarch band proposal.

"We don't know if this is a loan, or if it's a gift," she said. "When it is received, does it have to be paid back, does it require a constitutional amendment? There are a lot of questions we have."

Ardis also reiterated a position Bentley stated Monday: no compact agreement would be reached unless the Legislature found $541 million in revenue.

The House GOP's endorsement, announced in a press release, did not give specifics of what sort of deal with the Poarch Band they wanted -- whether it would limit gambling to existing bingo machines on tribal properties or allow Class III gaming, such as slot machines and table games, and whether it would allow expansion of existing tribal gambling facilities.

Experts who study lotteries and gambling told the Advertiser last week that after the big initial revenue surge, gambling generally posts flat growth year-to-year, sometimes as little as 2 percent. That may not be enough to keep up with cost growth in Medicaid and Corrections; Medicaid is seeking an increase of about $70 million this year, an increase of more than 11 percent over the current year's budget.

Marsh said at the press conference he did not what the ultimate growth numbers would be, but suggested that the gambling plan could give the budget breathing room.

"It should take us many years in the future to get these other things under control," said Marsh, referring to growing costs.

Bentley sharply attacked Marsh's proposal in a speech to the Montgomery Area Chamber of Commerce on Monday, calling it "the worst piece of legislation I have ever seen."

"To think we have to depend on some of the most dependent people in our population to fund our government when corporations won't even pay their share — we're better than that," he said.

Bentley's revenue package would raise cigarette and automobile taxes; close a corporate income tax loophole and eliminate certain credits and exemptions for banks, insurance companies and utilities. The package has not moved very far, and Marsh said Tuesday he did not sense a great deal of support for the plan.

"The governor seems to think this is an ugly piece of legislation," he said. "I think it's a pretty good choice for people to make. What I've seen is a pretty ugly tax package."

The governor has threatened to veto the General Fund budget and bring the Legislature back into special session if the budget does not include his revenue package.

The legislation authorizes the governor to enter into a compact with the Poarch Band of Creek Indians, who operate casinos in Atmore, Montgomery and Wetumpka. Marsh, however, has said that Republican senators do not want to grant a monopoly to any entity; a compact with a high return to the state would not be approved by the U.S. Department of Interior without tribal exclusivity.

Non-exclusivity would significantly lower the amount of revenue the state would gain from an Indian tribal compact, but by taxing other entities at a higher rate, the state could potentially see more revenue from those locations.

Allowing slot machines and table games at any location in the state would allow the Poarch Band to have the machines, though the process could take time, depending on Bentley's willingness to negotiate a compact with the tribe.

The House GOP's budget proposal did not specifically address the exclusivity issue, though the tribe has said that the $250 million is conditioned on being granted a monopoly on gaming operations in the state. The GOP proposal also anticipates the transfer of the use tax to the General Fund.