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December 18, 2009

Casino table games fail in Pa. House

Lawmakers to take up issue next year. Rendell to lay off at least 1,000 if stalemate remains on Jan. 8.

By Andrew M. Seder aseder@timesleader.com
Times Leader Staff Writer
Andrew M. Seder on Facebook | @TLAndrewSeder on Twitter

The state House failed to vote Thursday on a bill to authorize table games at Pennsylvania casinos, setting up a three-day window in January to reach agreement before Gov. Ed Rendell said he will have to lay off at least 1,000 state employees.

Rendell reacts

Harrisburg - Governor Edward G. Rendell today issued the following letter to legislative leaders calling for passage by Jan. 8 of legislation that will provide the commonwealth with needed revenue to balance the state's budget. Full text of his letter follows.

***

Gentlemen:

There is reason to be encouraged by the progress that has been made on the gaming reform and table game implementation legislation. This week's action in the House and Senate in advancing the legislation is a sign of continued progress toward the enactment of a meaningful and responsible bill. As you well know, that is needed to complete the budget each of you agreed to in October of this year.

It is my understanding that we have all agreed that the Legislature will return on January 5, 2010 to hammer out an agreement. Unfortunately time is running short, and unless I receive legislation on my desk that I can sign by January 8, 2010, I will be forced to place an additional $250 million into budgetary reserve.

Although I will attempt to make as much of those cuts from discretionary lines as possible, there is no way that I can reach that figure solely by doing so. The majority of cuts will have to come from general government operations and that will necessitate a minimum of an additional 1,000 furloughs. I know that none of us want that and the people of Pennsylvania would suffer for it, so it is imperative that this be resolved by January 8th.

In the interim, I will operate on the faith that you understand the gravity of your actions, or the lack thereof.

Sincerely,

Edward G. Rendell, Governor

State House members headed home for their holiday break after a brief session that did not include a concurrence vote on a table games bill the Senate approved 27-22 Wednesday night. The House will not return to session until Jan. 5.

“It was painfully obvious,” that there were not enough votes needed to pass the bill on Thursday, said Brett Marcy, spokesman for House Majority Leader Todd Eachus, D-Butler Township. Also, 19 members of the House, 17 of them Republicans, were absent from Thursday’s session.

With 102 votes needed for passage, the House voted 103-92 Tuesday night for its version of the bill that was then sent to the Senate for approval. When the Senate tinkered with some provisions, including scrapping a House plan to increase the number of casino licenses to 15 from 14, some House members balked.

“There’s no question the changes the Senate made raised some serious concerns for our members,” Marcy added. “We didn’t have a lot of wiggle room when it comes to passing legislation.”

State Rep. Eddie Day Pashinski, D-Wilkes-Barre, said he was disappointed with the way the bill has been handled.

“They’ve been working on this damn thing for months and months and months,” Pashinski said.

Marcy said leaders in the two chambers will spend the next few weeks trying to hammer out an agreement.

“We intend to work with our Senate colleagues over the next couple of weeks to reconcile our differences. We need to come to an agreement with this,” Marcy said.

Haggling over licensing fees and tax rates held up voting for months. The final bill would require a $16.5 million licensing fee for Category 1 casinos, which includes Mohegan Sun at Pocono Downs in Plains Township and Category 2 casinos such as Mount Airy Resort near Mount Pocono, and $7.5 million for Category 3 casinos, which would be smaller.

The tax rate on table games would be 14 percent for the first two years and then the rate would drop to 12 percent. Another 2 percent would be allocated to local entities, including municipalities, development projects and institutions, including The Commonwealth Medical College in Scranton.

The bill is projected to raise $320 million for the state over the first two fiscal years. Proceeds could eventually help pay for public schools once the state’s drained budget reserve returns to $750 million.

The enabling legislation was needed after the Legislature approved a 2009-10 state budget including $250 million in revenue generated by legalizing table games. The money is needed to close a projected budget shortfall.

But the changes the Senate made to the bill Wednesday night were enough to derail agreement for the rest of 2009.

A spokeswoman for Sen. Bob Mellow, D-Peckville, said the lack of a vote Thursday is another speed bump but not a blockade.

“We are extremely close to the finish line and anxious to get this done. We are hopeful that a little bit of time will give way to compromise,” said Lisa Scullin.

The longer the delay, the fewer days of potential revenue will be generated from the table games such as poker, roulette and blackjack.

“We need those table games up and running as soon as possible to defray the budget deficit,” Pashinski said.

The bill, in addition to authorizing up to 250 table games at Category 1 and 2 casinos and 50 tables at Category 3 casinos, includes a measure to allow casinos to extend credit lines to gamblers and institutes a range of reforms relating to gambling regulations.

Rendell said lawmakers’ failure to pass expanded casino gambling will mean more state employee layoffs. Rendell said he will have to lay off at least 1,000 more state employees if the Legislature cannot resolve the stalemate by Jan. 8. That gives the Senate and House three days after they return from the holiday recess to vote on a reconciled bill.

However, Rendell delivered good news to Penn State, Pittsburgh, Temple and Lincoln universities. He said he will approve the state subsidies that he had held up while waiting for the Legislature to pass a gambling bill.

The Associated Press contributed to this report.