As I have written about several times now, Pennsylvania remains without a signed 2015-16 state budget. The only other state in our nation that it is in a similar place is Illinois.
I am very concerned about the impact that the ongoing impasse is having on the services that are supposed to be provided by your federal and state tax dollars that remain stuck in our State Treasury.
Human service providers are genuinely suffering. Thankfully, through their dedication and compassion to their clients, they have shouldered the financial burden of continuing to help our friends, neighbors and community members who need help.
Our schools are reaching a financial tipping point. To date, schools and intermediate units across Pennsylvania have privately borrowed over $350 million to keep operations going. I applaud their willingness to manage and I cannot help but think how wasteful it is that other government institutions must borrow money and pay interest when funds are available.
In an effort to finally move the state budget conversation forward, the leaders in the House of Representatives and Senate allowed Governor Wolf to offer his modified tax plan for a vote.
The Governor was given an opportunity to personally lobby members of the Assembly for his plan, which would have increased the personal income tax by 16%, in addition to imposing additional taxes on natural gas drillers.
After hours of debate, both for and against the plan, the House of Representatives in a bipartisan vote, rejected the Governor’s proposed new taxes 73–127. While the Governor acknowledged the loss, he continues to insist that his new taxes, “remain on the [negotiating] table.”
In the interim, reports have surfaced that there is interest to expand legalized gambling in Pennsylvania to help raise additional revenue.
To be clear, this would be Pennsylvania’s third expansion of gambling in six years.
Proponents would like to introduce Internet gambling, which is currently only legal in New Jersey, Delaware and Nevada.
Other proposals seek to increase the total number of slot machines in Pennsylvania and expand where they can be located, including at airports and off-track horse racing betting parlors – such as the one located at East Towne Mall in East Lampeter Township.
Lawmakers who support more gambling estimate that an expansion of some sort could mean hundreds of millions of dollars in one-time license fees plus collections from taxing a new stream of gambling profits. They believe that it would also keep the state’s industry current in a competitive and fast-changing environment.
However, history has proven that more gambling is not a good answer for funding government and it does little to promote an opportunity society – excellent schools, strong communities and families, and a robust economy driven by the free enterprise system.
For example, in 2010 the General Assembly legalized table games at slot-machine casinos because the Commonwealth was struggling with revenues. The total contribution from that effort netted $96 million last year. To put that in perspective, that represents 0.33% of the total state budget in 2015 – a small one third of one percent.
When the General Assembly legalized gambling in bars in 2013, it was estimated that 60 percent tax on games of chance would raise roughly $150 million a year in revenue. Unfortunately, in the fiscal year that just ended on June 30, only $554,000 came from this revenue source.
I offer these views because I do not believe we should look to gambling as the answer to the challenges Pennsylvania faces. While we cannot tax our way to prosperity, we cannot gamble our way there, either.
Instead, we must seriously consider measures that are supported by a vast majority of the people of Lancaster County and Pennsylvania – privatizing the state liquor store monopoly and making necessary reforms to the public sector pension system.
Far too often government seeks a quick fix. Gambling expansion is a great example.
Let’s instead focus on those things driving up the cost of government. Let’s identify the waste, fraud and abuse of your tax dollars. Let’s make important reforms that are long overdue to unnecessary, ineffective or outdated programs.
Now those are policies worth betting on.