Legalize video gaming terminals in local taverns

Following the machinations of our legislature can be a tall order under the best of circumstances but, in recent months, the action in Harrisburg has left me dumbfounded.

At the end of June, the General Assembly passed a $32 billion budget — essentially the spending number for the next fiscal year. And then, they left town — without passing a revenue package to actually fund the budget.

Imagine agreeing to buying a new car then telling the dealer that you will let him know, at some point in the near future, how you plan on actually paying for it. Odds are slim that you would be driving it off the lot. (I doubt that few Pennsylvania families, and not a single business that I am aware of, can operate this way.)

More than two months later, it does not appear that the House and Senate are any closer to agreement on a funding plan than they were in June.

What makes this budget purgatory even more frustrating is that there are common sense, viable solutions that could help fund the budget and close the state’s $1.5 billion deficit — that do not require raising taxes on Pennsylvania families.

One of those proposals is legalization of video gaming terminals for local tavern owners. These machines could be installed in bars and taverns around the state, and are expected to generate $400 million in annual revenue for the state, without raising taxes on individual families.

In addition, this legislation would create $140 million for local governments as part of a local share partnership. Centre County alone would receive an estimated $400,000 from this local share.

The state House has passed this bill. Unfortunately, the state Senate has balked. Instead, Senators approved a revenue plan that raises phone and utility taxes on all Pennsylvanians. To make matters worse, the Senate is leaning toward approving more casino licenses for the state to fund the budget.

Rather than support small businesses and all 67 county governments, the Senate plan would provide out-of-state billionaire casino operators the inside track on another round of new licenses in Pennsylvania.

As the president of thePennsylvania Licensed Beverage and Tavern Association, I represent roughly 2,500 small business in this state, including more than 100 in Centre and surrounding counties.

Our members have worked furiously to support legalization of VGTs for several years but in the last year, VGTs have become a make-or-break difference for neighborhood taverns across the state. Last year, lawmakers passed a new law — Act 39 — that allows chain groceries and big box stores to grab licenses to sell beer to go.

These changes to the law have had a tremendous impact on our bottom, and we need new tools to compete successfully against the huge corporate chains who now control many of our licenses. We surveyed our members and some have seen revenue from beer-to-go drop by 50 percent. Many of our members have already begun to remove their six-pack coolers because sales have dropped so precipitously.

In addition to the lost revenue, our members have paid a steep price for their licenses and, each year, pay a fee for the privilege to operate in the state. We have no problem paying our fair share and we have for many, many years. But, when the state changes the rules in the middle of the game, and devalues our license in the process, we do believe we deserve an opportunity to compete with some new tools at our disposal. VGTs would give us that opportunity.

Modernizing beer and wine sales has been a priority in Harrisburg for some time. We have no issue with the concept. But, if we do not modernize the entire alcohol delivery system at the same time, my members get hurt. That is what has occurred in recent years. Part of the industry was modernized while some of us were left in the previous era. It is time to level the playing field.

VGTs would allow tavern owners to provide an additional service and recoup at least some of the losses from beer-to-go coolers. It would generate hundreds of millions in new revenue for the state without raising taxes on every household in Pennsylvania. There is simply no good reason why the state senate cannot return to Harrisburg, approve this legislation and send it to Gov. Tom Wolf.

The General Assembly needs to return to work, and finalize a plan to balance the budget — preferably with a popular, logical solution like VGTs.

This story was originally published September 25, 2017 at 11:36 PM with the headline "Legalize video gaming terminals in local taverns."