HARRISBURG – It's crunch time in the state Capitol.
Pennsylvania legislators returned Monday facing a race against the clock to strike a deal on a state budget for the fiscal year that begins this Saturday. Nothing much was moving.
Disagreements over how much to expand gambling continue to dominate talks, with a top Senate Republican on Monday saying the key sticking point is whether the state should allow bars, restaurants and other establishments with a liquor license to legally install up to 40,000 "video gaming terminals" (VGTs), or slots-like machines.
Senate Majority Leader Jake Corman (R., Centre) said Republicans who control the House of Representatives are insisting that any gambling expansion proposal include VGTs, but that there is still resistance in his caucus to such a move.
"We are working through that to see if there is any way we can thread the needle to get support for that," Corman told reporters about the push to shore up support among Senate Republicans for VGTs. "We haven't hit critical mass as of yet … If we are not going to do that, I think House has made it clear that they are not going to gaming at all."
Many Democrats, particularly those who represent Philadelphia, oppose legalizing VGTs, which they believe will only exacerbate the problems that urban communities face with nuisance bars.
Corman has said that the House and Senate appear close to agreeing on how much to spend in the next fiscal year – about $31.8 billion. The difficult part is how to raise the revenue needed to support that spending, close an estimated $1.5 billion shortfall and resolve some of the state's longstanding troubles in raising new dollars.
Though Gov. Wolf, a Democrat, in his last several budgets has proposed hiking the state's income or sales taxes – this year, he has advocated extending the sales tax to currently exempt items – GOP legislators have consistently rejected such ideas. They have also opposed Wolf's push for a natural-gas extraction tax.
As a result, the legislature has been left to scramble for other ways to generate the big dollar amounts needed to close stubborn budget deficits. Often, they have turned to so-called "sin taxes," including raising taxes on cigarettes and other forms of tobacco, as a solution.
Senate Republicans have said that this year, they are discussing the concept of borrowing against the state fund that receives a steady stream of income from the landmark settlement with tobacco companies – but how much remains unclear.
Another idea being discussed is to assess the sales tax on the retail purchase of alcoholic drinks at bars and restaurants. Currently, the sale of that alcohol is taxed at the wholesale price when the bar or restaurant buys the alcohol.
House Republicans have not taken a position on either borrowing or shifting the drink tax to consumers.
Corman acknowledged Monday that Philadelphia and Pittsburgh already have drink taxes, and implied the Senate does not want to raise the add to the levy consumers pay in those cities.
"Obviously Philadelphia and Pittsburgh already have one, and I don't think we'd want to layer on top," he said. "And we wouldn't want them to lose their money. So we'd have to work through that issue as well."
He said the shift would generate an additional $250 million for the state over a full year.
Despite all the issues that still need to be resolved, the mood in the Capitol hallways did not seem as tense as it often does days before the start to a new fiscal year.
"The feel in the air, it's different," said House Republican spokesman Steve Miskin.
"It's a little strange," he added. "Our members are all concerned that July 1st is less than a week away, and it's June 26th, and there doesn't appear to be the normal budget bustle and scurrying."