Pennsylvania Senate approves gambling bill

Marc Levy

Friday, July 2, 2004 | 9 a.m.

HARRISBURG, Pa. -- After five hours of debate and months of negotiations, the state Senate approved a bill early today to legalize as many as 61,000 slot machines in Pennsylvania in an effort to lower property tax bills by about 20 percent and borrow billions of dollars for public projects.

The bill passed 30-20, but it still requires approval from the House of Representatives. It received support from all 21 Democrats and nine Republicans at the end of a debate that began Thursday evening and ended after 2 a.m.

Proponents framed it as the state's most important legislation in 30 years, while opponents said they feared that widespread gambling would give rise to addiction and organized crime.

West Virginia officials have been weighing the bill's impact on that state. Gross video lottery sales from West Virginia's four racetracks are projected to be $748 million this year. That number is projected to drop to $700 million in fiscal 2004-2005 if Pennsylvania legalizes slots by January.

Following the vote, Sen. Vincent J. Fumo, the Philadelphia Democrat who was one of the bill's chief architects, said that the billions of dollars that Pennsylvanians gamble in other states, such as New Jersey, would come home to roost and create countless jobs.

"This is a competitive decision we're faced with, keeping our money inside our borders," Fumo said.

House leaders said they wouldn't vote on it until they also can consider companion legislation to distribute $1 billion a year in gambling revenue to school districts to reduce property taxes. In Philadelphia, a reduction in the city's wage tax would be substituted.

The Senate was slated to vote today on the property-tax bill as lawmakers rush to finish their business in time for their traditional two-month summer vacations.

The Senate's president pro tempore, Robert C. Jubelirer, a Blair County Republican who opposed the bill, said the idea of raising revenue from gambling is predicated on most people losing money, not winning.

"We must addict tens of thousands of Pennsylvanians who have to lose to make this work," Jubelirer said during debate. "I'm not sure that's such good economic policy."

The House Republican leader, Sam Smith of Jefferson County, said Thursday that he was "99 percent" certain that the gambling bill would pass his chamber.

Gov. Ed Rendell reinvigorated about 20 years of efforts to expand gambling in Pennsylvania when he made the slot machines measure a centerpiece of his 2002 campaign as a way to reduce property taxes. After several near-deals in the past year, the bill ballooned to include more slots licenses and tens of millions of dollars for public projects that its sponsors say was necessary to gain enough support for both House and Senate approval.

The slots bill would authorize a gambling commission to issue 14 slots licenses to resorts, racetracks and other sites around the state. If the House approves the legislation, Pennsylvania eventually could receive more annual public revenue from gambling than any other state and have more slot machines than any state besides Nevada.

The commission would be able to borrow money against expected gambling revenue to pay out property-tax relief sooner than the roughly three years needed to accumulate enough slots revenue to substantially lower homeowners' tax bills.

In addition, proponents expect that the state will borrow about $2 billion to subsidize public projects, including the Pennsylvania Convention Center in Philadelphia and Pittsburgh International Airport, and use gambling revenue to pay down the debt over 25 years.