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The Budget Dilemma in the State of Pennsylvania

The final components of a $27.8 billion state budget were move into place on October 7th, 2009 as Pennsylvania marked its 100th day without a spending plan. Governor Ed Rendell received the first budget-related bill to approve, a measure stating how the state of Pennsylvania will raise the money it needs. It features bigger business and cigarette taxes but not a highly controversial tax on live stage performances tickets and museums as some legislators had pushed for.

The Senate appears ready to send a second vital budget component to Gov. Rendell's desk which states how Pennsylvania should spend the additional money that it raises. Differences remain on at least one important part of the puzzle-how much the state should tax new casino table games like blackjack at slot-machine facilities-and that might delay the approval of the budget package. A Senate Committee advanced a bill that would impose a fourteen percent tax on blackjack, roulette and poker.

12% would go to Pennsylvania and 2% will go to municipalities. The bill would also set a $15 million license fee for the big casinos. A different version in the House calls for a thirty-four percent tax and a $20 million up-front fee. The gaming industry is pushing for twelve percent.

Don Shiffer, Mount Airy Casino Resort's lawyer, said that a group of lobbyist representing the slots facility was observing every turn of the game measure.

So are gaming critics, especially in Philadelphia, where the proposed addition of casino table games is causing a furor. An anti-casino activist and board member of the Asian Americans United in Philadelphia, Helen Gym, said that the addition of the casino table games will not help Philadelphia and will just increase the crime rate and gambling addiction. Legislators are also divided over another controversial component in the House version of the bill.

The House bill would permit smaller "resort" slot facilities including the one in the Valley Forge Convention Center, which will offer up to 1,500 slot machines. That is triple what the present slots law permits. Three casino facilities-SugarHouse in Philadelphia, the Rivers and Mount Airy casino in Pittsburgh-have threatened to file a lawsuit against Pennsylvania if the measure is passed. Casino officials argue that if resort license holders can add more slot machines, they could take away players and eat into the profits of the casinos. The executive director of the Pennsylvania Casino Association, Ken Smukler, said that the provision could be a potential "deal breaker".

Erik Arneson, a spokesperson for Senate Majority Leader Dominic Pileggi (Republican-Delaware), said that the 1,500 slot machines was never a well-like idea with GOP senators and that the threat of a lawsuit helped put an end to the idea.

The tax legislation would also add twenty-five cents per pack to the price of cigarettes and for the first time tax cigars known as "cigarillos", increase the franchise and capital-stock taxes that state businesses pay and start an amnesty program for those owing Pennsylvania back taxes.

In July 2009, the early days of the standoff on the state budget led to the release of partial paychecks and the suspension of pay for seventy-seven thousand state government employees. In August 2009, Rendell approved a "bridge" budget totaling about $12 billion that cleared the way for state employees to be paid.

But the social service agencies across Pennsylvania and the thousand of workers that work for them have not been so fortunate. Child-care providers, counties and other charitable organizations have not received quarterly payments form Pennsylvania since spring, forcing many to take drastic steps. State legislators hope that the conflict over the budget will end as soon as possible.

 

Monday, November 09 , 2009
Victor Sanchez