Gov. Rendell signs gaming bill

HARRISBURG - Gov. Rendell signed the bill legalizing table games in Pennsylvania's casinos yesterday, closing the book on last year's marathon budget process barely a month before he officially opens debate on the next spending plan.

But the same Rendell who only two days ago was threatening to lay off 1,000 state workers if the bill didn't pass chose to sign it behind closed doors. The governor said he had done so because of "reservations" about elements of the bill.

"I signed this bill despite the misgivings I have about it," Rendell said soon afterward at a news conference in his Capitol office. "I have serious misgivings about 'sin' taxes as a way to go. There is no sense of celebration."

Gambling expansion had never been Rendell's first choice for filling the budget gap. Nearly a year ago, he proposed raising the personal income tax and taxing natural-gas extraction. But the first idea got no political support, and Rendell retreated from the second by Labor Day.

He reiterated yesterday that he would have preferred to see all of the state's 14 licensed casinos, including two in Philadelphia, opened before any expansion of gaming.

Rendell also criticized the bill as "laden with pork," with its provisions that fund specific entities, such as hospitals and schools, in certain legislators' districts. "This is no way to run a railroad," he said.

In addition, he said, he took issue with language creating exceptions to Philadelphia's indoor smoking ban. The bill allows smoking in designated portions of the two casinos planned in the city.

"I don't think it's an improvement to take away Philadelphia's right to set its own rules on smoking," Rendell said. "That part of the bill bothers me."

The good news, he said, is that the bill will "produce a balanced budget," saving the thousand state jobs and averting other cuts.

At the same time, Rendell warned that unless revenue collections increased this year, he could not rule out cutting more state jobs beyond the 721 individuals laid off last year.

The Senate and House approved the games bill this week after inter-chamber and intra-party disputes had stalled it since October.

Passage, with the promise of a relatively quick infusion of about $200 million in table-games licensing fees, was vital to balancing the budget in the face of the state's worst revenue losses since the Depression, Rendell said yesterday.

With poker, roulette, blackjack, and other table games expected to be running at existing slot-machine parlors as early as July, new revenue should start coming in to the state, with a smaller share going to the casinos' counties and municipalities.

"It will help," Rendell said.

By 2012, according to an industry-funded study released in June, table games could increase Pennsylvania's annual casino-gambling revenue 30 percent to $976 million.

But Rendell administration figures are more conservative, estimating casinos could bring in $140 million in fiscal 2011, which will begin July 1.

Administration officials say that while the state is not yet staring down a $3.2 billion budget gap it tackled last year, shortfalls could register in the $450 million range.

With the Rainy Day Fund plundered and other special funds raided to balance this year's budget, Rendell said the state would have to find additional sources of revenue or face deeper cuts.

"We're getting to the point where there is virtually nothing left to cut," he said.

Rendell said last month that he would revive the idea of a tax on drilling in the natural-gas-rich Marcellus Shale reserve, which runs below much of the state. He has also hinted that he'll breathe fresh life into his proposal to raise income taxes.

Rendell's chief of staff, Steve Crawford, said administration officials planned to meet with legislative leaders for the first round of budget talks before the end of the month.