Pennsylvania's state budget talks are stuck and video gaming terminals appear to be the dam

Not a lot got done, publicly, on the new state budget Monday and we think we know why:

The intense quest to allow slot-machine style video gaming terminals at Pennsylvania's bars, restaurants and private clubs.

For the last few days, it seems like movement on the larger budget package has been stopped up because of what state Senate leaders say is House leaders' insistence that VGTs be part of a final gambling expansion package.

House lawmakers are advancing a major gambling expansion that includes video gaming terminals in bars.

It is, according to sources, the issue that - more than any other - led to the postponement of a hoped-for five-way meeting between top Wolf staffers and legislative leadership over the weekend.

That was put on hold, sources said, because House and Senate Republicans still had no agreement on gaming.

And it is the issue that seemed to leave the Republican-led Senate itself hog-tied on Monday as VGT supporters got an extended shot to try to find language that could get them 26 votes in that chamber.

As of Monday night, that vote count was still short, but the campaign was still alive.

VGT supporters, who passed enabling language in the House with the minimum 102 votes earlier this month, argue the games will give bars and private clubs a long-sought and badly-needed entree into the legal gambling business, leveling out a playing field that's tilted significantly in the last decade as they try to compete with casinos one on hand, and grocery stores that can sell wine and beer to go on the other.

It will also, in a payroll tax-averse Legislature, help the state balance a 2017-18 budget with new gaming tax revenues estimated at - depending upon how the final language is drawn - about $250 million or more.

Those supporters face fierce opposition from two distinct fronts:

  • Those who argue that the slot style games will hurt the 12 established casinos that have "partnered" with Pennsylvania to create thousands of jobs and already bring in more than $1.4 billion in taxes each year.
  • Those for whom the state is already in too deep with legalized gambling, and who see a serious uptick in social costs like gambling addiction with the final proliferation of slots in every community.

Strange bedfellows to be sure, but that's where we are.

The majority Senate Republicans - who hold 34 of 50 seats - have apparently determined that the next time they meet with the House, they either have a VGT plan in place, or they've shown the votes simply don't exist.

"I still have concerns (about VGTs)," Senate Majority Leader Jake Corman, R-Centre County, explained Monday.

"But I have a lot of members in my caucus who are very big supporters of it so I'm trying to work with them to see if there's a way to navigate through the issues so that people who are not supportive can be comfortable.

"I don't know that that's possible, but between the House's desire to have it and some of my members who want it, we're at least trying."

It means Sens. Rich Alloway, R-Franklin County, and Guy Reschenthaler, R-Allegheny County - the prime supporters of VGTs in the Senate - are getting a long leash to make their case.

It was not immediately clear that anyone's comfort level with VGTs was rising. Informal bipartisan head counts on the issue appeared to top out at 19 as of Monday afternoon, still seven votes short of a Senate majority.

Casino-county lawmakers, publicly at least, didn't seem to be moving.

Sen. Tom McGarrigle, a Delaware County Republican, said a proposal to keep VGT's out of counties that host a commercial casino didn't give him enough comfort that traffic to Harrah's racetrack casino in Chester won't be hurt.

Nor, he said, did potential language that would put the existing casinos in charge of the machines in the bars and taverns.

"My concern is we're trying to come up with gaming legislation in the five days before the budget's due, and I just don't think that trying to ram it down in the last five days is good...

"When you look at a business that generates almost a third of (the city of) Chester's budget," McGarrigle continued, "that's a lot to jeopardize. I just need a lot more time than a week or two weeks to make a decision like that."

Nor was the Senate Democratic caucus - often a critical piece of the coalition to move gambling legislation in Pennsylvania - providing a ton of support at this point.

That's in part because the minority caucus has shrunk so much to the cities of Philadelphia and Pittsburgh, and many lawmakers there are concerned VGTs will worsen nuisance bar problems endemic to many urban core neighborhoods.

Senate Minority Leader Jay Costa said Monday he believes there are "less than five" VGT supporters in his caucus.

Still, as occurred in the drive for House passage in April, there were other senators who indicated privately Monday they could put up a VGT vote if other factors in the state budget play out favorably for their districts.

They declined, in order to preserve their own negotiations, to speak on the record.

Such earmarking was reported to be a major factor in getting the measure to the goal line in the House.

But the sales job is running out of time.

"We've essentially spent a week on this now, which has put off some other discussions," Corman noted Monday afternoon. "So it needs to come to a head one way or another."

With the new fiscal year starting Saturday, Alloway said he expects to have another day or two, at most.

"This is the final budget week and I think that in the next 24 to 36 hours, we need to decide what direction we want to take."

But he also wasn't surrendering.

"Everyone's fighting for their position which they have the right to do, and you got to get 26 votes, so, I don't know," Alloway said. "I don't know where it goes."

Other prongs of the gaming legislation under consideration this year would legalize internet-based games run by the state's casinos, permit sales of Lottery games on-line, and address a Supreme Court decision that upended the method of assessing casinos for "local share" payments to their host municipalities.

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