An attempt to keep Alderney's gambling revenue ring-fenced for social projects has failed.
States member Richard Wilmott made the case at a meeting on Wednesday.
Mr Wilmott proposed an amendment to the 2006 budget which would prevent �500,000 of gaming revenue being amalgamated with general funds.
He argued that Alderney residents had the right to expect the cost of essential services to be met by general taxes paid to Guernsey.
The house was split down the middle and the president used his casting vote to approve the budget without the amendment.
At the same meeting, politicians approved the budget for 2006 and warned residents to brace themselves for lean times ahead as the island faces the impact of Guernsey's economic shortfall.
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