It was a step away from passage.
Then the lottery bill fell off a cliff.
Needing just one final vote to go on a future election ballot, a proposal to establish a statewide lottery collapsed in the Alabama Senate Friday when Democrats, key to the bill's success, withdrew their support amid concerns language in the bill – or not taken up by the House of Representatives -- could give the Poarch Band of Creek Indians a gaming monopoly at the expense of the state's existing dog tracks.
"If we allow this bill to go forth as it is... it would wipe out the existing industries I have," said Sen. Bobby Singleton, D-Greensboro, whose district includes GreeneTrack in Greene County.
The Senate voted 23 to 7 to nonconcur in the House version of the constitutional amendment, passed by the House late Thursday night amid a dramatic series of votes.
The end result was the death of the centerpiece of the special session called by Gov. Robert Bentley and renewed uncertainty about the future of the state's Medicaid program, which covers 1 million Alabamians, more than half under the age of 17.
"That vote today was not a vote against my bill; it was not a vote against me," Bentley said at a press conference Friday afternoon. "It was a vote against those children, those half a million children out there that are in poverty today because their health insurance is being jeopardized by the fact the Legislature did not take up this bill and let the people of Alabama solve this decades-old problem."
The governor said the vote would also imperil a plan to move Medicaid recipients intoregional care organizations (RCOs), a managed care-type program aimed at slowing cost growth in Medicaid. Alabama could receive up to $748 million from the Center for Medicare and Medicaid Services (CMS), which administers Medicaid, to implement RCOs and make improvements on health care benchmarks like infant mortality. But Bentley said the state may have to forfeit that money,
"They're not going to allow us to continue the program without long-term funding," he said.
The abrupt end to the lottery bill, which had escaped any number of dire situations over the past two weeks, turned legislators toward a short-term solution for Medicaid, which faces a deficit of at least $85 million in the General Fund budget that goes into effect Oct. 1. The deficit has already led Medicaid to cut payments to doctors, which has led to layoffs and could threaten rural physicians, particularly pediatricians.
But the vehicle to get that money — a settlement with BP over claims over the 2010 Gulf oil spill — faces its own controversy. The legislation would use about $448 million to pay off existing state debt, which combined with money under Bentley's control, could free up to $70 million for the Medicaid program. Another $191 million would go to support road projects in Mobile and Baldwin counties.
The failure of the lottery bill, however, will likely give impetus to legislators who want to see the debt payment increased, and possibly free more long-term money for Medicaid. That will lead to a collision with the Mobile and Baldwin county delegations, who say the region is still struggling to recover from the disaster.
"If you talk to those who represent the Gulf Coast, they feel all the money should go to the Gulf coast," Senate President Pro Tem Del Marsh, R-Anniston, said Friday. "The bill that came out of committee had $191 million for the coast. Right now, that's in jeopardy."
A clash of definitions
The lottery bill, had it escaped the Legislature and won voter approval, would have allowed lawmakers to set up a lottery in a future session. It would have put 10 percent of proceeds into the Education Trust Fund, with the remainder sent to the General Fund. The first $100 million would have gone to Medicaid.
Although almost never mentioned by name, senators were thinking a great deal of the Poarch Band of Creek Indians, who operate casinos in Atmore, Montgomery, and Wetumpka. Senate Democrats, who overwhelmingly backed the lottery bill when it passed the upper chamber Aug. 19, balked at a lottery definition put into the bill to appease House Republicans concerned about gambling expansion. The language restricted the definition of a lottery to paper tickets.
That was a deal breaker for most Democrats, who argued that if lotteries are considered Class III gaming — the same classification as casino-type gambling — state gambling operators could only sell lottery tickets, while the Poarch Band, a federally-recognized tribe, would corner the market on casino games like slot machines if the state pursued a compact allowing those.
"I think the paper definition is so restrictive it really doesn't do anything," said Senate Minority Leader Quinton Ross, D-Montgomery. "It limits what we can do."
House members in both parties Thursday attempted to add language to the bill that would require the state's dog tracks — such as GreeneTrack and VictoryLand in Macon County — to have whatever gambling allowed to the Poarch Band in a future compact. All those attempts failed.
Singleton and other Democrats hoped to push the bill into a conference committee in the hopes of putting that language in and taking the lottery definition out.
"They can have whatever the state offers," Singleton said during the debate.
Marsh said Friday the House would not accept those changes.
"They weren't willing to put that on downstairs," he said. "If we had gone to conference and added that, which is what the minority caucus wanted, you would have lost the votes in the House."
Ross said that disappointed him.
"Those of us who have been a part of this process know when the two Houses don't agree, we go into conference to reconcile our differences," Ross said. "But today, that's just not the case."
Lottery supporters were also undermined by the absence of two Republican senators — Bill Holtzclaw of Madison and Paul Sanford of Huntsville — who voted for the lottery bill last week. Holtzclaw, a Marine Corps veteran, said on Twitter he was at a Washington, DC honoring a former commander. Attempts to reach Sanford were unsuccessful.
Some legislators had no doubt about what sunk the lottery.
"Make no mistake," said Sen. Phil Williams, R-Rainbow City. "The casino interests are what killed that lottery."
Rumors about influences on the process flew around the state House throughout the week, and Bentley felt compelled on several occasions this week to strongly deny that he was pursuing a compact with the Poarch Band. Williams suggested Friday the failure of the bill might make Bentley more open to a compact. Bentley declined Friday to speak to a compact's future prospects, but repeated that he had not contacted the Poarch Band during the debates.
"That was not part of the process," he said. "I've never talked about it, I've never talked to the Native Americans or discussed that with them. That was never on the table. That was a smokescreen."
But groups opposed to the lottery on moral grounds were also active; Rep. Arnold Mooney, R-Birmingham, distributed folders prepared by a constituent to House members Thursday that condemned lotteries, in one case by employing veiled anti-gay language.
"There's those adamantly opposed to any gaming," Marsh said. "Now the gaming interests out there probably saw this as a threat as well."
The House and Senate adjourned until Sept. 6 Friday afternoon. There are three days left in the special session of the Legislature.
Bentley said his office would "keep working" on the issue, and left open the possibility of a second special session. Marsh said he hoped the outcome of the lottery would force legislators to look at budget reforms in taxes and the high percentage of revenues earmarked by the state. He did not expect to see another lottery proposal in the near future.
"It's taken a lot out of this body," he said. "They've worked hard, everybody's worked hard. They tried to get this done. The timing wasn't there."