GOP leader: Is Keno coming or was it a mirage to balance the state budget?

Though Gov. Dannel P. Malloy’s staff is negotiating with Connecticut’s Indian tribes about adding Keno games statewide, one of the legislature’s top Republicans doubts the administration has any intention of launching the controversial game.

House Minority Leader Lawrence F. Cafero, R-Norwalk, said Keno — which six out of 10 voters opposed in a June poll — was a last-minute option used to strike a deal on a new state budget just before the last legislative session ended.

And given that it would provide a relatively small share of revenue in the current two-year state budget, might it be dropped entirely if it proves too controversial as the 2014 gubernatorial race heats up?

Recent statements by the governor and his budget chief “fuel my hunch that this program was an 11th-hour filler used to balance the budget with no real intent to implement the program,” Cafero told The Mirror on Thursday.

Cafero said he was surprised to hear Malloy’s comments to Capitol reporters on Wednesday following an unrelated news conference.

Technically the new budget doesn’t mandate Keno games statewide. Rather it allows the administration and the quasi-public Connecticut Lottery Corp. to negotiate to make Keno available at Connecticut bars, restaurants and convenience stores. 

The state must negotiate with the two tribes the run casinos in southeastern Connecticut, the Mashantucket Pequots and the Mohegans. They have exclusive rights to casino games under a compact signed 20 years ago during the administration of Gov. Lowell P. Weicker Jr.

How are those talks going?

“They’re dealing with the issue and, quite frankly, I haven’t gotten a report from them,” the governor said.

“What’s surprising to me was to hear the governor’s response that he himself is unaware,” Cafero said. “He is hands-on in every aspect of his administration.”

The Norwalk lawmaker said he also was disappointed with the written response he received Wednesday to a letter he sent Malloy’s budget chief, Benjamin Barnes, asking about the status of the Keno game implementation.

“Those negotiations have not progressed to a point where an update to the General Assembly would be either informative or appropriate,” Barnes wrote.

Keno has been a controversial topic in state budget talks in recent years. 

Malloy’s predecessor, M. Jodi Rell, twice proposed launching Keno as a way to shrink a growing deficit in the last two years of her tenure, 2009 and 2010.

Legislators passed both times, and a March 2010 poll by Quinnipiac University found that 70 percent of voters opposed allowing the game in restaurants, bars and convenience stores.

Malloy and his fellow Democrats in the legislature’s majority were scrambling to strike a budget deal this spring that tried to avoid tax hikes — though the final deal did extend several expiring taxes and implemented a major gasoline tax increase first signed into law in 2005. 

Lawmakers balked at a controversial administration plan to auction off the rights to serve electricity customers, and dramatically scaled back a Malloy bid to extend a tax on power plants for another two years. As a compromise, both sides agreed that adding Keno could help replace some of those other revenue-raising options.

But was it added only to balance the budget on paper only, Cafero asked.

State government enters the new fiscal year with just over $232 million in its emergency budget reserve, commonly known as the Rainy Day Fund, according to state Comptroller Kevin P. Lembo. If the rest of the budget remains in balance, Malloy could tap that reserve to avoid implementing the new game.

And Keno remains controversial.

Another Quinnipiac poll, released on June 19, showed 59 percent of voters still oppose Keno.

That same poll also showed Malloy slightly trailing his 2010 gubernatorial opponent in a potential 2014 rematch.

Greenwich businessman Tom Foley led Malloy in that hypothetical rematch 43 percent to 40 percent — a difference that barely exceeded the 2.9 percent margin of error.

“The administration’s response [about Keno] is unacceptable,” Cafero said, adding the public should be informed whether or not the game is likely to be launched.

Barnes also reminded Cafero in his letter that the revenue potentially provided by Keno “is very small.”

The new state budget spends $18.6 billion this fiscal year and $19 billion in 2014-15. Keno is expected to provide up to $3 million in revenue the first year and $27 million in the second.

That represents less than 1/12th of 1 percent of all revenue needed to support the biennial budget.

Barnes added that the target of having the game available in Connecticut in late spring 2014 remains achievable. “I have every expectation that our efforts will enable us to meet this timetable,” he wrote.

Chuck Bunnell, chief of staff to the Mohegan tribe, wrote in a statement Thursday that “The Mohegan Tribal leadership has been meeting with state government officials. While we have not yet come to an agreement, we remain confident that we will reach a mutually beneficial one that would allow the state to operate Keno.”

William Satti, spokesman for the Mashantucket Pequots, could not be reached for comment Thursday.

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