FRANKFORT, Ky. (AP) -- Gov. Steve Beshear used his fifth state of the commonwealth speech Wednesday to again call on lawmakers to put a proposed constitutional amendment on the ballot so Kentucky voters can decide whether to legalize casino-style gambling.
The second-term Democrat, speaking to a joint session of the House and Senate, said Kentucky is losing hundreds of millions of dollars in tax revenue to neighboring states -- such as Illinois, Indiana, Ohio and West Virginia -- that allow gambling.
He said that makes no sense at a time when state government's financial outlook is so dire and more cuts are projected for the state's next two-year budget that's expected to be adopted by mid-April.
"We will not be relying on new revenue to balance this budget," Beshear said. "The key to balancing this budget lies not on the revenue side, but on the spending side. We will be cutting a lot. We will, of course, continue to find efficiencies, but the numbers are so wretched that we will likely be forced to carve into some of our most critical, basic services. And it will hurt."
Beshear said legalizing casino-style gambling and imposing a tax on proceeds could generate needed money for education, public protection and transportation projects. The move could create needed revenue to bolster the state's struggling thoroughbred horse racing industry, he said.
Too many people, he said, are traveling to states along Kentucky's northern border to gamble.
"We might as well be backing trucks filled with cash up to the Ohio River and dumping that money into the water," Beshear said.
Expanding gambling isn't the ultimate answer to the state's financial woes, he said.
"It's a mechanism that will keep significant money in our state that we're now sending elsewhere, money we can use to protect and invest in our priorities, like education, job creation, and, yes, our horse industry," he said. "So tonight, I reiterate, it's time to let Kentuckians decide the future of gaming in our state."
Martin Cothran, spokesman for The Family Foundation, called Beshear's speech "a lot of pretty words."
Cothran said Beshear didn't provide any details about his gambling proposal and that the governor still hasn't said whether he's proposing stand-alone casinos, slots at horse tracks or a combination of the two.
"He talks a good game, but he doesn't have a game plan," said Cothran, an anti-gambling advocate. "And until he does, it's hard to even debate the issue."
Senate President David Williams, R-Burkesville, criticized Beshear for not including the details of his gambling proposal in the speech.
"I don't think the governor knows what will be in the proposal yet," Williams chided. "It's just been five years in the making, so he's probably still drafting it."
House Speaker Greg Stumbo, D-Prestonsburg, said he also doesn't yet know what will be in Beshear's proposal. The wording of the proposal, Stumbo said, will be important, because it would have to pass muster with lawmakers and withstand legal scrutiny.
State Rep. Tim Moore, R-Elizabethtown, said he is concerned that Beshear's gambling proposal will again be a roadblock to getting "a reasonable budget" passed, as he said happened two years ago when lawmakers had to have a subsequent special session to get their work done.
"I continue to fear that will be a sideshow that will eat up so much time and energy that really doing the responsible thing with the budget will take a backseat," Moore said. "And that cannot happen, again."
Beshear said Kentucky is at a competitive disadvantage to other states that are using gambling revenue to boost purses and breeders' incentives to lure race horses, brood mares and stallions.
Past attempts to legalize more forms of gambling in Kentucky have failed.
"But I believe that if we all sit down and negotiate in good faith, if we avoid making public comments that box people in or draw lines in the sand, and if we keep uppermost in our minds that the people of Kentucky have repeatedly made clear that they want to vote on this issue, then we can come up with language that can pass both chambers without amendments," Beshear said.
Beshear also called for reforming Kentucky's tax code in "a strategic and non-partisan way" that will allow Kentucky to better compete with other state's economically. He promised that all options will be considered and all voices heard in creating a tax system that meets the state's future needs.
The governor also called for tax reforms that would strengthen the economy are needed with Kentucky continuing to suffer from the recession.
"It's true that state revenues are improving," he said. "But revenues are not improving fast enough to replace federal stimulus funds which helped us and every other state through the worst of this historic recession.”
The Beshear administration warned state agencies earlier Wednesday that they should brace for substantial spending reductions in the next budget cycle. Spokeswoman Kerri Richardson said those reductions could be in the range of 7 to 9 percent below the current spending levels.
Budget cuts have been common over the past four years in Kentucky because of the recession that's blamed for $1 billion in revenue shortfalls.
"Over the past four years, some state agencies have reduced spending by 25 to 30 percent," Richardson said in a statement. "Spending pressures and critical needs in priority areas will result in the most difficult budget the commonwealth has faced in some time. The next budget will require tough choices, and we are working to prepare for those choices."
Moore said he's hopeful Beshear doesn't present a budget proposal that includes projected revenue from gambling. The governor is expected to release his budget proposal in two weeks.
Beshear said passing a gambling amendment and reforming the tax code can be done during the current legislative session.
"Both will take political courage and will," he said.
The governor also said creating jobs will continue to be top priority.
"While too many Kentuckians remain out of work, unemployment rates are edging downward, and they're now the lowest in almost three years," he said.
The governor also called for a crackdown on "pill pushers in white coats" who he blames for "a scourge" of prescription abuse in Kentucky. He also urged lawmakers to strengthen Kentucky's prescription drug monitoring program at a time when more Kentuckians are dying from overdoses than from traffic accidents.
Beshear said Kentucky's medicine cabinets have become more dangerous than state highways. He said a renewed crackdown on prescription drug abuse is vital for the health, safety and productivity of all Kentuckians.
State Rep. Keith Hall, D-Phelps, said he's pleased Beshear is taking on the prescription drug problem.
"It's an epidemic," he said. It's a catastrophe. It has affected every family, every life of everyone in the East. It truly is a scourge on society."Beshear ended his speech with an appeal to put politics aside for the good of Kentucky.
"The issues -- from attacking prescription drug abuse to keeping our kids in school, from improving our workforce and protecting our children to keeping Kentucky tax money here at home by passing expanded gaming -- require us to collaborate," he said. "The lure of partisanship is strong. Having just finished a long political campaign, I personally know that to be the case. But election season is over. Now it's time to govern."
Associated Press writer Brett Barrouquere contributed to this report.