Plan for small games expansion to offset pension costs
HARRISBURG - Taverns could operate small games of chance, provided a portion of revenue goes to offset skyrocketing public pension costs under a new House bill.
The measure by Reps. Eugene DePasquale, D-95, York, and Ron Miller, R-93, York, is one of several ideas for new revenue sources to address the projected $4 billion spike in public school and state employee pension costs that will hit state taxpayers starting in 2012.
Under the bill, some 12,000 taverns in Pennsylvania could operate small games such as raffles and punchboards, but they would pay an assessment of 30 percent of their weekly gross game revenue to a proposed state Pension Stabilization Fund. The taverns would be required to donate 20 percent of their weekly gross game revenue to a charity identified on their small games license application. A companion bill is expected to be introduced soon in the Senate.
The taverns' 30 percent small-game assessment could generate an estimated $150 million annually to partially offset pension costs, said DePasquale.
"Considering the pension spike the state will soon have, the sooner we begin to put funding aside the better it will be for all taxpayers," he said.
This legislation also would increase the maximum limits on small games prizes for the community nonprofits, volunteer fire companies and social clubs that operate them now from $500 to $1,000 on a daily basis and $5,000 to $20,000 on a weekly basis. The higher limits would apply to tavern operators, too.
However, DePasquale emphasized that nonprofits, volunteer fire companies and social clubs would be exempt from the 30 percent assessment and 20 percent charity contribution requirements for taverns.
His measure has support from the Pennsylvania Tavern Association and Luzerne County Tavern Association, which say it would boost business if adopted.
"We've been forced to play by a different set of rules that make it harder for us to compete," said Patrick Heberlie, spokesman for the Luzerne tavern association. "The small games of chance proposal would be a big win for our family-owned businesses."
Since the opening of slots casinos in 2006, the existing small games licensees have been lobbying for higher prize limits on the grounds they need more of a competitive draw to draw players.
The issue got tangled up with a short-lived proposal during last year's state budget debate to tax licensees' small-games profits in return for the higher prize limits. That was left out of the final budget deal after a large number of rank-and-file House Democratic lawmakers objected to it.
Senate Appropriations Chairman Jake Corman, R-34, Bellefonte, said this week that broad support exists in the Senate to increase the prize limits. He said no decision has been made about allowing taverns to run small games.
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