Lottery voted down in the House

“No one is leaving this special session without getting something.” … Mississippi Legislator

Update: The House has changed course and voted in favor of a lottery Tuesday afternoon, sending the conference report creating a state lottery to the governor.

The 2018 special session took a surprising turn on Monday as the House voted down the state lottery conference report (SB 2001) by a bipartisan vote of 54 to 60. Moments later, the same lottery bill passed the Senate 31 to 17. The conference report was necessary because the Senate declined to agree to a House amendment that left the door open to video gambling. Democrats, led by House Minority Whip David Baria, were also disappointed that the bill does not directly allocate money for K-12 education.

The lottery bill has been held on what is called a motion to reconsider. This means that when the House reconvenes at 12:30, lottery supporters will have another chance to get a majority vote. If the motion is tabled (i.e., defeated), the lottery is likely dead for this special session.

Status of BP money

With the defeat of the lottery bill in the House, it has become clear why the special session call has not yet been expanded to include the so-called BP money. At issue is approximately $700 million in BP settlement funds. Options for the money include allocating a majority of the funds to either 3 (or 6) coastal counties. Or at least some of the money could be sent to all 82 Mississippi counties. Many observers predict a 70%/30% split between the two blocks.

The promise of getting more BP money or the threat of getting no BP money will be used by lottery supporters eager to flip the House vote. Whether this threat has any merit remains to be seen. But it would seem that Democrats have more to gain from delaying the lottery because they can use the issue next year to both advocate for more K-12 funding. They can also fault Republicans for cutting taxes and not spending more on infrastructure. Moreover, while the lottery remains popular statewide, pockets of resistance in conservative areas are fierce. It may even be enough to get some members “primaried.”

Problems with initial bill

The initial lottery bill also left much to be desired, exempting the new lottery board from state public records and open meetings laws. The House addressed this problem by adding transparency language. A House amendment to leave the door open to video gaming also slowed the bill down. This change was opposed by casino operators as well as the faith community, which has thus far voiced muted opposition to the lottery – and this morning may be wondering if they should have done more to oppose the bill.

A decades-old debate, Mississippi would become the 45th state to enact a lottery if the House approves. A lottery board, appointed by the governor, would also serve as the board of the Mississippi Lottery Corporation. It would act as a private corporation domiciled in Mississippi. The lottery is expected to generate about $80 million in annual revenue, with 35 percent of total proceeds going to the state. The remaining 65 percent will go toward administrative costs/paying vendors and prize payouts. It is MCPP’s contention that this 35 percent of revenue is essentially a tax and that the lottery bill is primarily a revenue bill.

The Mississippi Infrastructure Modernization Act

Also on Monday, the House sent HB 1 on to the governor.

HB 1 provides more than $1 billion in infrastructure funding over the next five years. The legislation is the result of two years of negotiation and compromise between the House and Senate, seeking to find a fiscally responsible way to provide sustainable and reliable roads funding. The Mississippi Infrastructure Modernization Act:

  • Provides $200 million annually for roads and bridges. Funding will reach $1.1 billion over five years. This money will come from $300 million in new bonds/debt, internet sales tax revenue from the 7 percent online sales tax, a new annual tax ($75 to $150 annually) on hybrid and electric vehicles, and sports betting revenue.
  • Of note, raising the gas tax was never part of this package.