Gambling emerges as hang-up in budget talks

HARRISBURG » Tax-averse Republican lawmakers tasked with fixing Pennsylvania’s biggest cash shortfall since the recession are hitting a rough patch over how much more gambling to legalize.

Tuesday was the fourthto-last day of the fiscal year, and leaders of the House and Senate Republican majorities remained behind closed doors discussing compromise spending and revenue plans, without agreement.

Gambling has emerged as a key piece of the multibillion-dollar revenue puzzle that Republicans are trying to assemble, a year after Democratic Gov. Tom Wolf and top Republican lawmakers agreed to expand gambling to help stitch together the state’s increasingly threadbare finances.

Both chambers have backed gambling legislation that would make Pennsylvania the first state to allow both its casinos and lottery to take its games online.

However, House Majority Leader Dave Reed, R-Indiana, maintained that any budget agreement should include a provision for slot machine-style video gambling terminals — called VGTs — at thousands of bars, truck stops and liquor license holders.

“Look, 78 of our members and 102 House members voted (to pass) a gaming bill that included VGTs,” Reed said Tuesday evening, referring to a bill the House passed three weeks ago. “We’ve been working on gaming for three years now, it was part of last year’s budget agreement, certainly the financial situation hasn’t gotten any better since last year and it’s an opportunity to not just add additional revenue, but actually help out some small businesses across the state, too.”

Supporters say the machines will raise hundreds of millions of dollars for the state and local governments, benefit a wider range of small businesses and break the hold that the casinos have on Pennsylvania’s gambling industry. Pennsylvania is the nation’s No. 2 commercial casino state, behind Nevada, and most casinos, Democrats and anti-gambling Republicans have joined forces to oppose VGTs.

Wolf is counting on an extra $250 million in cash from new forms of gambling. However, he has been unenthusiastic about VGTs, suggesting that it would cannibalize revenue the state gets from the Pennsylvania Lottery and licensed casinos.

It’s also not clear if VGTs mean immediate money for the state: Just setting up regulatory systems for gambling in bars could take a year or more, the Department of Revenue has told lawmakers.

Senators said the stalemate around VGTs has stalled wider budget discussions, as Democrats pressure House Republicans to back off a bare-bones budget bill that Wolf’s administration has said would inflict widespread cuts, including to prisons, child care subsidies and veterans’ programs.

“Until that’s addressed, I think it’s sort of holding other conversations up,” said Senate Minority Leader Jay Costa, D-Allegheny.

Senate Republicans say $2.2 billion in cash is necessary just to balance the House GOP’s budget plan, and they are considering borrowing money to fill much of the gap.

The Senate has backed a narrower gambling proposal than the House, and senators said Tuesday that they had yet to find enough support in the 50-seat Senate for a compromise bill that includes VGTs.

One discussion involved limiting the machines to counties that do not host a casino, Republican senators said.

A House gambling bill laden with earmarks narrowly passed the chamber on June 7, and would allow as many as 40,000 of the machines statewide. The vote capped years of unsuccessful efforts by some lawmakers to bring casino-style gambling to bars.

The issue is being heavily lobbied in the Capitol, and people with interests in video gambling machines have given campaign contributions to House Republicans. Casino interests are prohibited from giving campaign contributions in Pennsylvania.