Lawmakers send budget-balancing bills to governor, but gaming bill remains for one more day

Lawmakers send budget-balancing bills to governor, but gaming bill remains for one more day

Author: Jason Gottesman/Wednesday, October 25, 2017/Categories: News and Views

After 118 days, lawmakers on Wednesday sent to Gov. Tom Wolf a package of bills aimed at helping the end the budget impasse and providing funding for state related universities.


However, a gaming expansion bill that was said to provide around $200 million in the first year for the current year’s state budget was unable to get a vote in the House as the chamber pushed up against its 11:00 p.m. deadline.


The effort Wednesday was the latest push of a multi-day process that ended in a marathon session Wednesday as lawmakers worked in haste to latch on to momentum to bring some of the more controversial pieces of the revenue package—a Tax Code bill, a gaming expansion measure, and a Public School Code bill—to a conclusion.


Starting with the Tax Code bill, the Senate approved the measure by a vote of 29 to 21 without changing the bill that came their way from the House last week.


That bill included providing money to close out the deficit from FY 2016-2017 through monetizing $1.5 billion in future Tobacco Settlement Fund revenue. The legislation vests the Commonwealth Financing Authority with the power to determine the best way to finance the money and enter into an agreement. The payments from that monetization will be capitalized for the first two years.


It also included new taxes on fireworks and third-party internet sellers while providing for new revenue collection procedures aimed at enhancing revenue.


A recent state Supreme Court decision no longer requiring new provisions in the Tax Code relating to net operating loss carryforward deductions was said earlier in the week to be a “modest windfall” for the Commonwealth.


The Senate also advanced a Public School Code bill by a 35-15 vote that included controversial elements like ending the so-called “last in, first out” layoff priority in economic-induced teacher furloughs and instead replaced it with a system based upon performance in teacher evaluations.


Among other changes, the bill would also keep in place the moratorium on PlanCON projects, alter superintendent contract renewal terms, provide for newly-adopted truancy laws to apply to nonpublic schools beginning in the 2018-2019 school year, increase the amount of EITC grant money available by $10 million, and change requirements for school director training.


However, the bill does contain a number of pieces liked by both sides of the aisle like opioid education programs, funding for the ailing Erie City School District, and anti-lunch shaming provisions.


Both chambers Wednesday moved to consider a long-sought-after gaming expansion bill that has been in the making over the course of the last two legislative sessions. However, the conclusion of that process was delayed Wednesday due to internal House rules requiring the chamber not remain in session past 11:00 p.m.


Despite earlier remarks to the contrary, the legislation that passed the Senate Wednesday night does include a VGT component that is limited to five machines at truck stops and also includes a local opt-out provision. In addition, it takes on the dual task of authorizing ten ancillary or satellite casinos in the hopes of boosting gaming-related revenues absent a full-blown VGT option.


It is the hope that the ancillary casinos plus the VGT component will provide enough recurring revenue along with the limited taxes in the Tax Code would provide enough revenue to balance not only the current year, but also FY 2018-2019.


Current estimates peg gaming revenues at around $200 million in the first year and $90 million to $100 million in the following year, with much of that being recurring revenue. Potential litigation over the legislation could hold up some of that money from being realized, however.


The House is expected to reconvene at 8:00 a.m. Thursday morning to continue debate on the legislation that was hampered by procedural maneuvering in advance of the 11:00 p.m. deadline Wednesday.


One thing was for certain Wednesday night: despite the positive votes sending the bills to the governor’s desk, the measures were not anyone’s first choice.


“This isn’t perfect by any stretch of the imagination, it’s not what we in the Senate Republican caucus would have preferred, but it’s something the House can pass,” said Senate Majority Leader Jake Corman (R-Centre) on Wednesday evening prior to all bills reaching their conclusion.


“We finally got to a component that they could pass that we could accept and that’s where we are.”


It also appears that we’ll unlikely see a repeat of a scenario where the legislature passes a spending plan before having the money to pay for it.


“I think we learned our lesson to not bifurcate the two from one another,” said Senate Minority Leader Jay Costa (D-Allegheny). “At some point, one has to go first before the other. I don’t think we’ll ever leave the amount of time to allow one to get done and then come back and get the other one done. It’s very difficult in this environment.”


Additionally, on Wednesday, the House sent to the governor around $600 million in additional spending earmarked for Pennsylvania’s four state-related universities and the University of Pennsylvania Veterinary School.


Several of the schools had contemplated eliminating future in-state tuition discounts and other measures to help make ends meet absent state funding this year.


The Senate also sent to the governor two budget-related capital debt authorization bills that provide for infrastructure project itemization and authorization.


The House on Tuesday passed a necessary Fiscal Code budget implementation bill. Last week, they passed a budget-related Administrative Code bill.


All bills, absent the gaming measure, currently await Gov. Tom Wolf’s signature before the budget process can officially be brought to a conclusion.