Democratic lawmakers vowed Monday not to support GOP-backed casino legalization, even if it were tied with one of Democrats' long-held policy goals — Medicaid expansion — as Republicans seek to break an impasse over the state’s delayed budget.
“We are united in opposing this latest political stunt,” Senate Democrats wrote in a public letter.
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The letter comes days after the proposal was hatched. Republican leaders on Saturday floated a new plan to pull provisions to legalize more gambling and expand Medicaid out of the budget and force two votes: One on the annual spending plan, and another on a bill that would combine Medicaid and gambling provisions. The tactic raised doubts as to whether Republicans — despite controlling supermajorities in both chambers of the legislature — will be able to find enough votes on either side of the aisle to pass a budget.
A draft a copy of the budget bill, obtained by WRAL and confirmed by a person familiar with the negotiations, was being reviewed by officials late Monday. The proposal could change as negotiations continue.
Details of the gambling/Medicaid plan also became clear Monday evening with release of that actual bill, which meshes Medicaid expansion with authorization of new casinos and the legalization of video lottery terminals, a cousin to the video poker and sweepstakes machines lawmakers have tried to outlaw for decades.
No longer would Medicaid expansion, which the legislature's Republican majority agreed to in principal months ago, but delayed implementation on, depend on state budget passage. Instead it would depend on the legislature authorizing four new casinos and legalizing the video lottery terminals, explicitly tying a government health insurance expansion expected to help hundreds of thousands of people to gambling legislation.
Video lottery terminals
Legalizing and taxing the VLTs would generate an estimated $208 million in new state revenue for in the first full year, rising above $400 million a year by fiscal 2027-28, according to analysis from legislative staff.
That accounts for 10,000 machines at first, all available for play 365 days at locations that have an ABC permit, including gas stations and restaurants. Those locations would be limited to three machines each; truck stops could have up to 10. The state would need to hire 200 new people to regulate the industry.
The analysis assumes the total number of machines would increase by 5,000 a year up to an uncertain saturation point, where growth would stop.
Legalizing four new casinos would bring in more than $200 million a year in state revenue once those facilities get up and running, the analysis states, with most of that money coming off a 22.5% tax on gross gaming revenue. The casinos would also generate more than $40 million in revenue for local governments.
The two gambling expansions, casinos and VLTs, would likely rob each other of some revenue if legalized together as planned, the analysis states. Legislative staff figured that would cut state revenue estimates between 5% and 10%.
The opposition from Senate Democrats Monday was unanimous: All 20 of the Democrats in the 50-member Senate signed the letter promising to vote no on legislation tying gambling to Medicaid expansion. In the 120-member House of Representatives, Democrats hold 48 seats. Forty of them signed a letter opposing the deal Monday. The House Democrats slammed GOP leadership for "cynically using health care as a political bargaining chip" to get casinos — but also indicated they could come around if Republicans were willing to now include them in budget negotiations.
"To date Republican leadership has not engaged in good faith negotiations with our leadership," the House Democrats' letter said. "If that changes, we stand ready to pass a budget that meets the needs of North Carolinians."
The top Democratic lawmakers, Chatham County Rep. Robert Reives and Wake County Sen. Dan Blue, have previously said they plan to introduce a proposal of their own within the coming days to highlight how Republicans could win their members' votes.
How budget talks break down
Republicans are seeking Democrats' votes for a workaround on casino legalization after Moore said he does not have the overall votes to pass a budget that includes expanded gambling — a priority for Senate leader Phil Berger. Berger last week accused Moore and House leaders of breaking an agreement to include the provision in the budget since the majority of House Republicans support it.
It has been a tense budget process, playing out almost entirely in private, invite-only meetings. Moore said Monday one of his colleagues compared it to childbirth, but Moore said it’s really more like the birth scene in the science fiction movie “Aliens” — in which an alien bursts violently out of the chest of an infected human.
As the budget talks have fallen apart among Republicans, a spokesman for Democratic Gov. Roy Cooper confirmed the governor has recently spoken with Berger, as well as the two top Democratic lawmakers, on how to best move forward.
"Republicans reneged on the original Medicaid deal, and coupling this suspicious backroom casino plan with the passage of Medicaid expansion has rightfully outraged many Democratic legislators," Cooper spokesman Jordan Monaghan said. "The Governor has spoken to Sen. Berger, Sen. Blue, and Rep. Reives as recently as today, and shared that there do not appear to be enough Democratic votes to help Republican supermajorities pass their casino deal at this time."
State government continues to be funded under spending levels approved in the previous budget, but the impasse is delaying raises for state workers and billions in new spending for government projects ranging from road repairs to school safety improvements. It's also holding up the implementation of Medicaid expansion, which would provide health insurance to hundreds of thousands of low-income residents.
Medicaid expansion passed earlier this session, but its implementation is contingent upon the budget passing. Republican leaders say that’s due to its budget implications. But it also gives the GOP leverage over Democrats in the budget process because it has long been a policy goal of Democrats.
Largely sidelined from budget negotiations, Democrats insisted they would not go along with the plan to float a new bill combining casino legalization and Medicaid expansion.
"It's straining the imagination to conjure a scenario where 11 million people would be held hostage for the bidding of a Maryland casino developer, but that's where we are today," the Senate Democrats said.
Cordish, a Maryland-based casino developer, has asked for and received rezoning of land in Rockingham County — where Berger lives, and where his son is a county commissioner — for a potential casino there. It has hired numerous lobbyists and donated to several state lawmakers.
Cooper has slammed the proposed deal — despite having made Medicaid expansion a key part of his 2016 and 2020 campaigns.
"GOP demand for passage of their backroom casino deal in exchange for a state budget and Medicaid expansion is the most brutally dishonest legislative scheme I’ve seen in my 3+ decades," Cooper wrote on social media Saturday. "People are right to be suspicious. Something has a grip on Republican leaders and it’s not the people of NC."
Talks continue
Berger's and Moore's cars were parked at the legislature Monday morning, as well some of their top deputies — an indication that the secret budget debates continued Monday, at least among GOP leaders.
Berger and other casino supporters say it'll be a much-needed shot in the arm for the economy in struggling rural areas of the state. Moore previously confirmed Rockingham, Anson and Nash counties are among the counties lawmakers have in mind. The draft legislation does not specify which counties, but instead lists criteria for which counties are eligible.
“The purpose of this program is to encourage and promote tourism in rural counties on the state border and along major transportation corridors,” the legislation says. “The program will allow for gaming, which is a new and expanding component of the tourism industry and is currently allowed in North Carolina on certain Indian lands. As many contiguous states allow gaming, those industry business opportunities and employment opportunities are being lost to this state.”
Supporters had hoped that even though some Republican lawmakers would oppose casinos, the promise of other conservative priorities in the budget would make it possible to cobble together enough votes to pass a budget with casino legalization built in. The current version of the budget has not been shown to the public.
But earlier iterations included conservative priorities such as income tax cuts, a massive expansion of private school voucher spending, more money for anti-abortion groups and the creation of a new program at UNC-Chapel Hill that both critics and supporters have said will focus on teaching conservative ideals.