PA Budget Deal Implodes; Online Gambling Relegated To Sidelines

That came despite increasing chatter that lawmakers were closing in on a budget deal amenable to lawmakers in the state and Gov. Tom Wolf.

Caught up as collateral damage is online gambling. Progress on a gaming package for new state revenue appeared to be making progress even as the larger budget deal fell apart.

No deal on the budget

The state government had been waiting on House Republican leadership to produce a revenue package that will fund a $2 billion-plus shortfall in the budget. All sides had been sounding positive notes on a deal coming to fruition this week.

It appeared a package would appear on Tuesday night, and then again on Wednesday morning. But sometime this morning, the deal was pulled off the table and did not progress. House Republicans caucused well past the House’s planned start time of 9 a.m. and a package never emerged.

An increase on the state hotel tax appeared to be the sticking point that stalled progress.

What did happen on Wednesday?

• House Democrats tried to revive the possibility of a severance tax on Marcellus Shale. An effort to bring that bill to the House floor failed. There was some very contentious back-and-forth between Republicans and Democrats during that effort.
• Wolf conducted a press conference on the budget, blaming House Republicans for their failure to act. He also outlined what he could do from his office to limit the damage to a state that still does not have a way to pay for it budget in the current fiscal year.

More on what the governor did

For now, Wolf said he plans to securitize profits from the state’s liquor system. “It will raise $1.25 billion to pay off nearly all of our prior year deficit and significantly reduce the need for additional temporary borrowing to pay our bills,” the governor’s office said in a release following his public comments.

That money appears to take off the immediate pressure for passage of a budget. But it leaves a lot of questions. Most importantly: Will lawmakers let Wolf’s actions be a proxy for passing a balanced budget and do nothing until next year?

From the Associated Press:

Wolf’s announcement seemed to mark an end to months of budget wrangling, along with massive casino-style gambling plans being floated in hopes of squeezing tens of millions of dollars more in casino license fees and gambling losses.

Most lawmakers and Wolf wanted to fund the budget with some amount of recurring revenue, which gaming provisions could provide.

What’s next for PA on the budget and gambling?

Both the House and Senate are not scheduled to be back in session until Oct. 16. While that could presumably be moved up it’s not clear that lawmakers will work on the budget in the short term.

A gaming package has appeared to be unlikely to advance on its own. Now it at least seems feasible that the budget battle — and online gambling — could get kicked down the road to 2018.

However, Wolf’s plan does not kick in immediately, which still means a budget deal could be hammered out beforehand. From Penn Live:

Wolf’s Budget Secretary Randy Albright said that the PLCB borrowing would likely take about two months to close.

That leaves a window for the budget talks between Wolf’s administration and the Republican-controlled legislature to resume, and Wolf himself said he would still prefer to complete an agreed-to package.

A deal on gaming, online gambling?

Despite Wednesday’s setback, it appears all parties still want to move forward on a gaming package.

Penn Live also reported that House Majority Leader Dave Reed intimated “that Republicans have given full support to several non-tax revenue proposals centered on gambling expansion and liquor reforms.”

The package being discussed includes online gambling, along with several other gaming expansions, like video gaming terminals and satellite casinos.

1/ #iGaming—PA casinos to operate; iPoker, iCasino allowed; $10m+ license fee; 20% tax on iPoker; 26% tax on iCasino; no limit on skins.

— Chris Krafcik (@CKrafcik) October 4, 2017

The wait to see the gaming package finalized and voted on will continue for now, however. Whether it’s still very much alive or on life support is unclear right now.