December 18, 2006

Dedicated Health Care Funding Might Be
Tied to Statewide Vote on New Gambling

By Mike Hailey
Capitol Inside Editor

A powerful alliance could be in the making at the Texas Capitol as health care professionals consider joining forces with video lottery advocates and possibly casino supporters to push a plan that would use new gambling revenues to strengthen the safety net for uninsured Texans who can't afford health care.

In a state with a soaring indigent health care bill and the largest percentage of uninsured residents in the nation, VLT proponents think that a plan that dedicates a sizeable share of video lottery proceeds to health care for Texans without coverage would have a good shot at overcoming opposition in the Texas Legislature to a statewide vote on new games of chance.

Lawmakers and lobbyists who want to see full-scale Las Vegas-style gambling in Texas will probably campaign to have casinos included in a possible package that would give voters the final say on a constitutional amendment that would legalize new gambling activities with the guarantee that a significant amount of money they raise go to health care for Texans who aren't covered by government programs or private plans.

VLT advocates may have an ally in State Senator Kyle Janek, a medical doctor who's on the lookout for ways to help state medical schools cover the costs of treating an ever-increasing number of patients who are uninsured but still unable to qualify for Medicare, Medicaid or other government-sponsored health benefits. Janek, a Houston Republican who specializes in anesthesiology, suggests that he'd be receptive to video lottery gambling as a source of funding for indigent care at the state's medical schools. But Janek has indicated that finding a way to help hospitals that are part of the state's higher education system through an indigent health care funding crisis is a higher priority to him than the legalization of new gambling in Texas.

Video lottery backers appear to be confident that a plan that dedicates gambling revenues to health care for the uninsured in Texas would have support from hospitals, doctors and other medical professionals as well as the state's business community.

Track owners, breeders and other players in the state's horse and dog racing industries in recent years have encountered stubborn opposition in their attempts to win support from state legislators for a statewide vote on video lottery terminals at existing facilities. With video lottery gambling expected to generate more than $1 billion a year for state coffers, VLT forces argued that the legalization of the machines would help the Legislature avoid higher taxes or painful spending cuts when facing a $10 billion deficit in 2003.

Despite Governor Rick Perry's support for video lottery as part of a school finance plan a year later, the racing industry and other VLT advocates were rebuffed when lobbying in a special session for a statewide vote on the gambling terminals. The Republican governor had abandoned his call for video gambling by the time VLT supporters made another run at the issue in the 2005 regular session and subsequent special sessions on school funding and taxes that year.

While the move to bring VLTs to Texas has run into intense opposition at every turn from a group of about two dozen conservative state House Republicans, video lottery advocates faced an additional roadblock two years ago when House Democratic Caucus leaders announced that they would encourage colleagues to vote against gambling proposals that had been in the mill. The threat of opposition from various angles caused the push for VLTs and casinos to stall that time around.

Pro-gambling forces believe that a majority of the House's 69 Democrats would support a statewide vote on video lottery and possibly casinos if a substantial portion of the new money pumped into VLTs and other games of chance is dedicated to health care for working families and poor people who are unable to pay medical bills. At the same time, video lottery proponents say that some of the legislators who've been fiercely opposed to new gambling might have second thoughts about putting a measure up for a statewide vote if it helps constituents receive health care they need but can't afford.

An estimated 5.4 million Texans - or one out of every four residents in the state - do not have health insurance, a U.S. Census report revealed two years ago. The situation is not as dire on a national level - with about 16 percent of the United States population going without health coverage. Texas Comptroller Carole Keeton Strayhorn has reported that one-third of the people in the border cities of Brownsville, Laredo and El Paso are uninsured.

While some public hospitals are being forced to turn away indigent patients due to a lack of state funding, the large number of uninsured Texans is making it increasingly difficult for businesses in Texas to afford health plans for their employees. As more people without health coverage show up at the doors of public facilities, the cost of treating them without compensation is driving up health insurance premiums for those who are covered.

The state is expected to have a budget surplus of $15 billion or more when the Legislature convenes in early January for its regular session. But about half of that money will be needed to cover the costs of growth and inflation along with property tax cuts approved earlier this year in a special school funding session. VLT advocates hope to make the case that the new money that's left over could be used on a variety of other needs if health care funding was coming from a dedicated fund fueled with new gambling proceeds.

Conservatives have argued that the social costs from crime, addiction and other problems that they think new gambling would bring to the state would be greater than the revenues it would generate for state programs and the economy in general. Behind-the-scenes opposition to VLTs and casinos in Texas has also come from casino owners and racetracks in surrounding states. A huge amount of the business that tracks and casinos in Louisiana, Oklahoma and New Mexico enjoy has been coming from Texans.

With the exception of a casino gambling bill that Democratic State Senator Rodney Ellis of Houston has sponsored during the past several sessions, the only gambling measures that have been filed so far for the incoming Legislature to consider center on limited casino gambling at Indian reservations.