The Pennsylvania House approved on Tuesday the latest of a series of plans aimed to close a $2.2-billion gap in the state’s $32-billion budget for the current financial year. The budget was approved by lawmakers back in July, but they have failed ever since to produce a solution to the riddle of how it would be funded.
House legislators passed their latest budget deficit plan late on Tuesday by a vote of 102 to 88. The lower chamber of the Pennsylvania Legislature proposed that $1.5 billion be borrowed from the state’s share of a landmark 1998 settlement with the tobacco industry. Here it is important to note that the Senate previously proposed a similar move, but it was vocally rejected by House lawmakers.
The latest House proposal also called for the legalization of fireworks sales and their taxation. If the plan is approved by the Senate and Gov. Tom Wolf, pyrotechnics retailers will be taxed at 12% on sales. What is more, stores will be required to pay certain amounts in order to be allowed to sell fireworks, varying from $3,000 for temporary stands to $20,000 for fireworks-dedicated stores. It is believed that the move could generate nearly $12 million for the state coffers.
A provision in the plan, one that was previously proposed by the Senate, would require online retailers to collect taxes on sales and to contribute those to the state. Goods sold online would be taxed at 6%. The implementation of that particular tax is expected to generate between $30 million and $43 million in proceeds for the coffers.
Where Does Gambling Stand in the New Plan?
Although the plan did not contain any specific gambling-related provisions, House lawmakers told media last night that the industry is still considered as a potential generator of revenue for the filling of the budget gap.
Details on how proceeds will be collected from gambling are yet to be discussed, but it is believed that various gambling services could generate up to $200 million in revenue for the state.
The legalization of online casino games as poker as well as of daily fantasy sports has long been discussed as a move that could help the state in its budget struggles. The legalization of video gaming terminals has been another proposal pointed by lawmakers as a potential source of much-needed revenue.
The gaming machines have actually proved to be a sticking point in previous gambling expansion discussions, mainly due to fears that they could cannibalize revenue from brick-and-mortar casinos. It is yet to be seen whether they will be considered as part of the latest budget plan and if so, how many of them will be proposed to be added at truck stops, taverns, and other facilities. Previously, the House proposed the addition of 40,000 such devices, bu the move was opposed by the Senate.
The House’s new budget plan was referred to the Senate for a vote. If approved there without any further amendments, which does not seem likely to happen, the proposals will then be sent to Gov. Wolf’s desk. Given the fact that the plan was not welcomed by a number of House members, it will probably not gain traction in the Senate or at least not without amendments.
