Rumours of a temporary fix for Pennsylvania

Pennsylvania’s search for a funding package on its $32 billion budget and $2 billion deficit (see previous  reports) took a new turn as the week drew to a close with reports that House Republicans (who have been stalling on a Senate funding proposal that includes the legalisation of online gambling and DFS) are mulling a short-term patch instead of a proper solution.

Local media reports noted political rumour that instead of addressing the issue with a gambling expansion package and other measures that could increase tax revenues to plug the financial gaps, House Republicans may be planning to raid other state funds in a one-year solution that simply delays resolution on the central issues, deepening the problems.

The information on the House’s plans is still sketchy, and it is not known whether there is an intention to ditch the Senate’s gambling expansion solution entirely or not.

Our readers will recall that one of the major obstacles to the House and Senate agreeing on a gaming expansion package to fund the state budget has been the House’s insistence on including video gambling terminals in pubs and clubs – something the land industry is vehemently against.

Media reaction to the idea of raiding other state funds has been negative. In an editorial the publication PennLive commented:

“This one-year fix is the worst possible idea because it not only pushes the solution to our structural deficit off to another year, but it deepens the problem. House leaders must recognize that we need recurring revenues and bring a tax code bill to the floor. The bill passed by the Senate is a good starting point because it includes a severance tax on natural gas drilling. This is long overdue.”

Experts have already warned that the continued delay by lawmakers in funding the budget is a violation of the state constitution, runs the risk of the state’s credit rating being downgraded and in extremis could see the state having to postpone payment to its creditors.

Related and similar