Texas comptroller favors video-lottery machines

Connie Mabin

Friday, April 4, 2003 | 9:50 a.m.

AUSTIN, Texas -- Allowing video-lottery gambling at Texas racetracks to help pay for public education was among 42 money-raising and saving recommendations revealed Thursday by Comptroller Carole Keeton Strayhorn.

The gambling proposal would generate $712 million in the 2004-05 budget cycle, Strayhorn said. If approved by Texas voters, Strayhorn envisions the money offsetting reductions in local property tax revenue used to fund state schools.

She would do that by lowering the maximum increase in local residential property taxes from 10 percent to 5 percent, forcing the state to increase its share of education funding.

Some of the gambling revenue also would be used to pay for Strayhorn's Texas Next Step, a proposal to allow every high school graduate a free education at a two-year college or technical school.

Expansion of gambling is a divisive issue among state leaders. Republican Gov. Rick Perry has repeatedly said he would veto any stand-alone legislation proposing expansion.

Lt. Gov. David Dewhurst shot down Strayhorn's suggestion, saying the Senate's already found enough cuts to balance the next state budget.

"I personally do not believe in expanding gambling, but I appreciate Comptroller Strayhorn compiling ideas, both old and new, to marshal state resources effectively," said Dewhurst, the Republican leader of the Senate.

But intense lobbying by the gambling industry, no-new-taxes pledges and a $9.9 billion budget shortfall have given proponents hope.

Strayhorn said her proposal would happen only if voters approve a constitutional change to allow the gaming proceeds to be earmarked for public education. Voters have already approved the horse racetracks, she said.

Some 1,000 video gaming machines could be up and running by next year, if the idea goes forward, she said.

The proposal does not promote gambling but allows Texas to keep money currently being spent on video gaming in other states, said Strayhorn, a Republican.

"I want to keep those dollars here at home educating our children," she said.

GOP House Speaker Tom Craddick said Tuesday that video gambling didn't appear to be a House priority. "We havent looked at it," he said.

Earlier this week, Perry indicated that he was not likely to veto a bill providing for the continued existence of the Texas Lottery Commission, even if it had gambling expansion amendments tacked on to it. Some lawmakers saw that as the opening they've been looking for for multi-state lottery or video gaming measures.

The state's economic picture remains bleak, with a first-time ever two consecutive years of sales tax losses very likely, Strayhorn warned.

"These are unprecedented and challenging times in our great state," Strayhorn said. "Serious circumstances call for serious action."