The Rittenhouse Review

A Philadelphia Journal of Politics, Finance, Ethics, and Culture

Tuesday, July 06, 2004  

Slots Machines in the Commonwealth

It’s official: The once-great Commonwealth of Pennsylvania has jumped the shark.

I know, there’s nothing more boring than budget politics, except maybe a discussion of the budget politics of another’s state, but bear with me on this one.

Over the weekend the Pennsylvania legislature enacted, and Gov. Ed Rendell (D) signed into law, the poorest excuse I’ve ever seen for a budget, at least at the state level, in my 20 years of watching politics.

The most noxious feature of the budget calls for the introduction of slot machines at more than a dozen locations throughout Pennsylvania, including in Philadelphia and nearby Bucks County.

The Philadelphia Inquirer reports (“A Political Jackpot for ‘Fast Eddie’,” by Carrie Budoff and Thomas Fitzgerald, July 5):

Backers say putting 61,000 slot machines at 14 locations could generate up to $1 billion yearly from the state take to reduce local property taxes and pay for economic development -- promises on which Rendell staked his 2002 campaign and his governorship.

It is clearly the most far-reaching legislation in Pennsylvania since the early 1970s, when Gov. Milton Shapp ushered in the state income tax and lottery. Rendell plans to sign the bill this morning at Philadelphia Park racetrack in Bensalem, Bucks County. […]

Although property taxes are supposed to be reduced an average of 20 percent statewide -- and Philadelphia will get money to reduce the wage tax -- dissenters pointed out that in many communities, the reductions would be modest. And relief comes only after the state takes in at least $900 million, which is more than Nevada and New Jersey receive annually. [Emphasis added.]

Sounds a little optimistic, doesn’t it?

So, yes, Pennsylvania joins neighbors New Jersey and Delaware, and far too many other states, in turning to a “higher” level of government-owned gambling in an effort to resolve a fiscal crisis. (Note that in Pennsylvania we have already, in addition to myriad “instant-‘winning’” lottery tickets sold almost everywhere, 39 different lottery drawings each week: the bizarrely misnamed Daily Number, twice a day; the Big 4, twice a day; the Cash 5, every day; the Match 6, twice a week; and Powerball, twice a week).

Pennsylvania lawmakers and other opponents of state-owned slot machines put up a valiant fight against this desperate scheme, one that, I guarantee you, will result in at least several of these sites becoming full-fledged casinos within five years.

It gets worse, worse in a way that even supporters of slot machines are likely to agree. As noted by Inquirer columnist Joe Grogan (“Slots Have Cruel, Selfish Underside,” July 5), and I’m not making this up and I have no reason to believe Grogan is either:

Slots revenue . . . is not free money. It’s a tax on the easily duped.

You want to know who will benefit most? Those splitting up the pie: the connected and powerful -- and the politicians who do their bidding. […]

And now we find out that the architects of this fool’s bonanza have quietly written in their own little cash prize. The bill that passed the state Senate on Friday and the House yesterday allows legislators to privately own up to 1 percent in any of the 14 proposed slot venues. [Emphasis added.]

The same people shoving slots down this state’s throat, the ones responsible for regulating and taxing them, we learn only in the eleventh hour, will be able to personally profit from their oh-so-altruistic legislation. In case you’re curious, 1 percent of $3 billion is $30 million a year. But who’s counting?

Does greed get any more brazen?

Grogan’s last point is well taken, though regarding “more brazen greed” he just might want to dial (713) 759-2600.

But Grogan’s larger point -- that state-owned gambling is a tax on the poor and the working class -- is more important. Sadly, however, it dovetails crudely with the purported, and oversold, tax benefits associated with the slot-machine scheme.

More specifically, “tax relief,” when and if it comes, and remember, there will be none unless and until Pennsylvania’s slot machines are taking in more than the one-armed bandits draw in Nevada and New Jersey, states where government-owned gambling has been a fact of life for decades, will be directed largely toward reducing property taxes, as if home owners, ensconced in their comfortably and generously government-subsidized housing (through the mortgage-interest tax deduction) weren’t already the primary beneficiaries of the Commonwealth’s faulty method for financing education.

[Note: The phone number, above, was corrected post publication after reader M.D., Philadelphia, called the originally posted number asking where exactly he might find the most brazen greed conceivable.]

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