JEFFERSON CITY • Exuberant Missouri legislators and military veterans said Monday that they have found a painless way to support the state's financially ailing veterans homes.

Casinos won't have to pay more, and preschools won't lose funding, two options that have been kicked around in the Legislature without success.

So how would veterans get an extra $30 million a year? Take it from prizes given out by the Missouri Lottery.

"We finally found a solution that doesn't hurt anybody," said Richard Heigert, representing the Missouri Association of Veterans Organizations.

Currently, about 27 cents of every dollar the lottery receives goes to education. The new legislation would increase that share to 31.5 cents.

The additional education money — diverted from lottery prizes — would be earmarked for early childhood education. That would free up money that now goes to preschools from the state's share of the $2 entrance fee at casinos.

The Missouri Veterans Commission would gain the preschools' share — about $29 million a year — and use it to help run seven nursing homes and stockpile money to build another one. That money would come on top of $6 million in casino fees the commission already receives.

The switch also would provide about $1.5 million more each year for college scholarships for the Missouri National Guard and burial details for veterans.

"This is a very smart bill," said Bill Ratliff, representing the Missouri National Guard Association.

It's 'so simple, I don't know why we didn't think of it years ago," he added.

The unanswered question was whether less prize money would cause lottery sales to drop, and if so, how much? Monday was a state holiday, so Missouri Lottery officials were unavailable for comment.

Instead of about 63 cents of every dollar going back to players as prizes, that pool of money would shrink to about 59.5 cents of every dollar. (After the education share is deducted, the rest of the money pays for the lottery's administrative expenses and retailer fees.)

In a fiscal note that addressed an earlier version of the bill, Missouri Lottery officials said decreasing prizes would have an "unknown negative fiscal impact" on ticket sales and lottery profits.

Income tax paid on prizes also would drop, as would sales taxes paid on goods purchased by winners, the analysis said.

Since that note was prepared, House Veterans Committee Chairman David Day, R-Dixon, pared back the amount of money he would shift out of prizes.

He said the latest plan, which leaves 59.5 percent of lottery money for prizes, "will still leave us very competitive. I don't think we'll see a big exodus" of players, Day said.

No one testified against the bill at a public hearing Monday. The committee is expected to vote today to send it to the full House for debate. House Speaker Steve Tilley, R-Perryville, has said that finding a permanent funding source for veterans homes is one of his top priorities.

Since the recession hit, veterans homes have gotten less state funding, forcing the Missouri Veterans Commission to drain its trust fund.

Without an infusion, the commission says it may have to close some homes next year.

Gov. Jay Nixon proposed that the Legislature increase casino entrance fees by $1 per patron, which would generate about $50 million a year for veterans' programs.

But the state's casino operators opposed the plan, and Tilley said he would kill it because it was a tax increase on the gambling industry. Casinos absorb the current $2-per-person entrance fee instead of passing it on to patrons.

There appeared to be no losers, other than lottery winners, in the latest plan.

As long as lottery sales don't drop precipitously, preschools stand to gain from the new distribution scheme. Based on last year's ticket sales, early childhood could expect to get $35 million, up from $30.8 million that it draws from casino fees now.

Jeremy LaFaver, who lobbies for a nonprofit group called Child Care Aware, said he is reviewing the details but believes the plan has merit for preschools.

Currently, the early childhood education money helps fund the child care subsidy for low-income working families, as well as early Head Start services, grants to child care providers and the Parents as Teachers program.

"As long as we can continue to fund the programs that are funded now, I don't see a huge issue with it," LaFaver said. "In fact, I think it's better than what we have now, because then I won't have to fight with the veterans every year to get early learning funds."

The Veterans Commission was happy, too.

"This does a lot of things that we certainly had hoped could come out of this session," said Larry Kay, the commission's executive director.

Rep. Barney Fisher, R-Richards, summed up the winning combination thusly:

"No tax increase. No expansion of gambling. Everybody's rice bowl's intact."

The bill is HB1731.