Table-game proceeds eyed to cut 2012 pension pain in Pennsylvania

Brad Bumsted

Jun. 17, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- HARRISBURG -- A member of the state House committee with jurisdiction over gambling is working on legislation to legalize table games, with a new twist.

Republican Rep. Doug Reichley of Allentown said Tuesday he would use the revenue to try to cushion the blow from anticipated property tax increases that would be necessary to fund the Public School Employees' Retirement System when costs soar in 2012.

Reichley, who is researching the bill, said he wants "all table game revenue to go to PSERS to help hold down potential property tax increases."

Table games -- dice, blackjack, poker, roulette -- got a boost Monday when the Senate's top Republican, Joe Scarnati, said he would consider legalization. Scarnati, the president pro tempore, said it's far from a guaranteed deal in the Legislature and that he's "taking a look" at it.

But it is movement on an issue that was limited to the House Democratic caucus, where a pending bill earmarks revenue directly for property tax cuts.

Scarnati said it was necessary to consider as a way to raise money because Pennsylvania faces a $3.2 billion budget deficit.

Table games could bring in about $250 million the first year and $160 million the second, Scarnati said. The Legislature in 2004 legalized slot machine gambling at a limited number of venues.

State license fees would be charged to those wanting to run table games at the state's casinos. Reichley said he's considering auctioning the license fees.

The state and school districts each pay an annual share of pension fund costs. Eight years ago, when the state and public school pension funds were in solid shape, Pennsylvania lawmakers awarded themselves a 50 percent pension boost and granted a 25 percent increase to thousands of state and school workers.

When the economy tanked several months after the 9/11 terrorist attacks, taxpayers faced the prospect of significant increases in contributions to the pension funds to finance lawmakers' generosity.

Lawmakers responded by reamortizing the state's pension debt. The move, akin to refinancing a mortgage, left taxpayers facing payments that would spike significantly in 2012.

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