HELENA -- Montana could afford to extend health care to all children if the Legislature would raise the tax on certain video poker and keno gambling machines, a Helena lawmaker said Friday.

"We don't really have a surplus as long as we have kids that don't have health care," said Sen. Christine Kaufmann, D-Helena.

She pitched her Senate Bill 560 to the Senate Public Health Committee, which took no immediate action.

The bill drew support from anti-poverty and human rights groups and drew opposition from organizations representing tavern and gambling interests.

Kaufmann's bill would set up the Montana Kids Care program, create a governing board and raise the tax on electronic gambling machines to pay for it. The program would work in tandem with existing government funded health care programs to cover all kids.

"This is a critical piece of legislation," Kaufmann said. "This is an entirely possible thing you have before you, not pie in the sky. I believe health care is a human right.

She said several states, including Illinois, Pennsylvania and Washington, have enacted similar programs.

Kaufmann was awaiting the receipt of a fiscal note for a formal estimate of how much the program would cost and how much the higher tax would reap.

At present, the state imposes a 15 percent tax on the money paid into gambling machines, minus the money paid out in winnings.

Her bill would put a graduated quarterly tax on the gross earnings of the machines in each casino or bar. The tax would be 15 percent on the first $37,500, 22.5 percent on the next $75,000 or less and 30 percent on gross income exceeding $112,500.

Olivia Riutta of Working for Equality and Economic Liberation, an anti-poverty group, said one out of every six Montana children is uninsured or 37,000 individuals, leading to an "inevitable health-care crisis."

"Why we don't have a preventative care program that serves children is beyond me," said retired nurse Mary Beaudette. "Children learn better when they're healthy."

Kim Abbott, an organizer with the Montana Human Rights Network, said she supported a graduated tax on gambling as one way to raise the money to provide health care to every Montana child.

"Gambling is a highly profitable industry that enjoys all the social protections of any other business, but is an industry that doesn't actually produce a product," she said. Abbott said it should be paying "its fair share in taxes in proportion to the revenue it brings in and also in proportion to what it produces in our society."

Gambling industry representatives strongly opposed the bill.

Mark Staples, an attorney representing the Montana Tavern Association, said the Montana Legislature settled on the 15 percent tax rate on gambling gross revenues in the late 1980s.

"Our tax is in no respect low," Staples said, calling it plenty "in a state that gnashes its teeth over a 4 percent sales tax."

Since 1989, that tax has raised $623 million in Montana, providing up to 30 percent of local government budgets, helping fund city-county health departments, he said. A 2001 University of Montana study found that the gambling industry had created 22,500 jobs in Montana with a $220 million annual payroll.

Staples agreed that children's health care is a pressing need, but he said it should not be the sole responsibility of a business that is already "the highest taxed business"

Rich Miller, executive director of the Gaming Industry Association of Montana, said Montana's gambling tax is about what the national average is.

A similar 2005 bill to raise the gambling tax for a different purpose would have raised taxes by $18.7 million, Miller said. He predicted if Kaufmann's similar tax passes, it would force gambling operators to lay off some workers, including gambling machine manufacturers furloughing some highly paid computer programmers. He also said the industry likely would be forced to withdraw its support that largely funds the state program that helps problem gamblers.