New revenue for state, but where should it go?
HARRISBURG - When elected officials at the Capitol create something that generates new revenue, they invariably spend as much time debating how that money pot will be divvied up as on whether to go ahead with the idea itself.
That's been the case in recent years with enactment of impact fees for natural gas drillers in 2012, legalization of table games for casinos in 2010, the legalization of casinos in 2004 and the creation of the tobacco settlement fund in 2001 with funds paid by tobacco companies.
And it holds true with the current debate over legislation to legalize several small games of chance for taverns. The House and Senate have both passed versions of this bill and final action is likely this week.
One of the issues has been whether the bulk of revenue from anticipated revenue from tavern small games should go to the all-purpose state General Fund or to the Lottery Fund which underwrites a range of senior citizen benefit programs.
The prospect of having a new revenue source to buttress the General Fund is a key factor in the push this fall to pass this legislation, said House Majority Leader Mike Turzai, R-28, Pittsburgh.
Lawmakers are bracing for a difficult state budget debate next year due to a variety of factors.
But many Democratic lawmakers want the tavern small games revenue to go to the Lottery Fund.
Rep. Phyllis Mundy, D-120, Kingston, cited projections that new competition from small games in taverns could lead to a 5 percent reduction in Lottery ticket sales.
Gov. Tom Corbett initially wanted this revenue to go to the Lottery Fund, but he's on board with a compromise.
This provision in the House bill directs the Legislative Budget and Finance Committee to conduct an annual study to determine if expanded small games of chance have any negative impact on the Lottery Fund.
If the study identifies a shortfall, Corbett could then ask lawmakers to transfer funds from the General Fund to the Lottery Fund to make up that amount.
Democratic lawmakers complained this provision contains no guarantees such a course would happen.
The House-approved bill distributes revenues so that 60 percent goes to the state General Fund, 35 percent to the taverns and 5 percent to municipalities that have taverns with small games licenses.
This bill would generate $156 million for the General Fund in fiscal 2014-15 and $13 million to local municipalities, according to an analysis by the House Appropriations Committee.
The Senate-approved bill gives 60 percent of the revenue to the General Fund and 40 percent to the taverns. But signs point to the House version getting the final OK.
(Robert Swift is Harrisburg bureau chief for Times-Shamrock Communications newspapers. Email: firstname.lastname@example.org.)