A month into Pennsylvania’s budget standoff, Gov. Tom Wolf appears to have no plans to reduce the expenditures he has planned for the state, like more money for education.
The takeaway? If he wants to keep his plans for the budget intact, he will have to find a way to fund the expenditures while also appeasing Republicans, who have been adamant about not raising taxes in Pennsylvania.
What Wolf wants to keep
In an impasse that has now lasted a month, there has been almost no progress made in meager negotiations between the Democratic governor and Republican lawmakers in the state.
While the two sides have been talking, albeit sporadically, Wolf, at least publicly has shown little willingness to cut back on any of the funding increases he earmarked in his version of the budget.
In particular, Wolf appears to remain firm that funding be increased for Pennsylvania’s schools, one of the major tenets of his successful campaign. To back down from his promises on education would amount to a major political defeat for Wolf.
Despite the fact that funding for this school year might be affected if a budget isn’t passed soon, Wolf is sticking to his guns. In talking to the York Rotary Club on Wednesday, Wolf had this to say about increased education funding in his budget:
“It may take a little longer to get there,” Wolf said. “There may be some temporary inconvenience to get to a place where all schools, all human services, are in a better place.”
How does the education funding get paid for?
Republicans would likely be happy to approve Wolf’s education funding, but only if it isn’t accompanied by a suite of tax increases that Wolf is also proposing.
There’s been no mention of online gambling as a bridge between Wolf and Republicans on the revenue front. But if Republicans want no new taxes, and Wolf wants more education funding, there is clearly going to need to be compromise on revenue-generating measures.
Internet gambling remains one of those possibilities. Privatization of the state liquor system, which Wolf has opposed, is a Republican-backed plan that Wolf may end up acquiescing to. At the same time, it also seems highly unlikely that Republicans’ hard line on opposing tax increases will continue, either.
No matter what, the two sides will have to figure out how to pay for Pennsylvania’s budget, one way or another, and that has been the most contentious part of the impasse.
No positive signs
The latest nugget of news on the iGaming front came from Penn National Gaming CEO Tim Wilmott, who is bearish on online gaming happening during this legislative session.
Here’s what Wilmott said in an earnings call last week:
“I think there’s more lawmakers here in Harrisburg that are interested in the revenue potential of all these different options. And I think it’s very difficult to predict. We don’t expect anything happening in ’15, but we’ve been encouraged by the hearings that we’ve participated in, in and around the state of Pennsylvania, that there’s more of an appetite to consider these options than there ever has been.”
In the same call, however, PNG Senior Vice President of Public Affairs & Government Relations Eric Schippers did leave the door open for a possible avenue to a deal getting done this year that that would regulate iGaming.
Beyond that, there has been no mention of online gambling by politicians in the state in recent weeks.
At the same time, the budget standoff, which was mostly political theater until now, will start having a real impact on the state soon, as money to some state-funded programs will run out in August or shortly thereafter.
For now, everyone in Pennsylvania is watching and waiting for one of the sides to give some ground, or find a new solution to the issues Democrats and Republicans disagree on. Will online gambling be a part of that solution? While it’s looking increasingly unlikely, it’s not off the table yet.