Pennsylvania Senate clears budget funding bill

Pennsylvania senators have finally (if narrowly) voted through their solution to the state’s $2.2 billion budget deficit, proposing a funding package that includes an estimated $200 million contribution from legalised and expanded gambling (including online and DFS).

The State Senate funding estimate for gambling tax income is $100 million more than similar proposals last year, in part due to significantly higher levels of taxation. Other elements in the Senate funding package include a tax on natural gas extraction along with borrowing on anticipated tobacco settlements, according to local media reports Friday.

The measure has been sent to the House, where debate is still taking place on a House funding proposal that is believed to also include online gambling and DFS legalisation, but still presents serious differences of opinion over whether video gaming terminals in bars and clubs should be excluded.

The Republicans in the House are also reportedly vehemently against any tax increases as a general principle.

The $32 billion state budget and it’s $2.2 billion deficit was passed in June on the understanding that the legislature would return from recess and sort out the funding package for it, but that has so far not happened due to the conflicting views of House and Senate.

Several legal experts have pointed out that the legislature is de facto violating the state constitution by not producing a properly balanced budget.

External pressure on lawmakers is also growing, with the threat that rating agencies may decide that the lack of a properly funded budget is sufficient justification to downgrade the state’s credit rating.

For now, the ball is in the House’s court.

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