Senate Minority Leader Jay Costa talks budget

HARRISBURG — Legislators began to trickle back into the Capitol, but it remained unclear Friday — a week into the fiscal year — how they would finish paying for the state budget.

The House met for a few hours Friday, but there was no sign of a revenue package on their voting calendar. They, along with the Senate, are scheduled to return to session Saturday.

While negotiators have said they are discussing using some combination of borrowing, gambling expansion and other measures to close last year's shortfall and pay for the entirety of this year's budget, on Friday they were saying little. But Senate Minority Leader Jay Costa (D., Allegheny), took some questions about the talks. Here are excerpts from the conversation, which included his views on proposed slots-style machines called video gaming terminals, commonly called VGTs:

Q: Are we nearing an agreement on revenues?

Costa: "I feel like we are nearing. We're certainly not there yet, but I think there's a commitment from everyone to try to work, to come together, both on the budget stuff, the revenue side of course, and also the gaming issue."

Q: Are you able to say if it looks like VGT authorization is going to be in there?

Costa: "I don't want to speculate what may or may not be… There's this whole conversation about games of skill, which to me is far worse than VGTs, and too expansive, even more expansive than 40,000 VGTs. I've got a real problem with that."

Q: It sounds like you're not in favor of doing something that would cause those to proliferate?

Costa: "Absolutely. I'm not a VGT fan. I think the impact they have on brick and mortars. the impact they have on the neighborhoods and communities, I'm concerned about, and I just think given that we're going to do i-gaming and i-lottery and sports fantasy, I think that that's too much."

Q: Are you seeing part of the revenue coming from allowing wine and spirits to be sold in more private stores?

Costa: "That's certainly one of the things that's being pushed by Republicans in the House. I don't support that. I don't think the House Democrats support that, so it's something the House Republicans are pushing — more privatization of wine and spirits."

Q: Are people coming together on an amount for borrowing?

Costa: "No. That's a function of how much we've got to do with recurring revenue. We have to get our arms around that first and also, in light of this potential downgrade from the rating agencies, that has concern. That's certainly concerned me and others, so I think we have to recognize that we need to. This is an independent agency saying that we need to do recurring revenues. It's not the governor or Democrats saying it. This is an agency that's likely to downgrade us again if we don't be responsible and provide an appropriate level of recurring revenue."

Q: So, it's like mid-afternoon Friday. The talk has been about trying to deliver a revenue package by the end of Monday when the governor would have to sign a bill. Do you think that's realistic at this point if there's no agreement yet?

Costa: "I think it's doable. I think some of these things can come together quickly, and I think measures are positioned well. Different bills are positioned to have them through the legislative process quickly. So yeah, I think theoretically it could be done, but more than likely we're looking Tuesday, Wednesday, probably."

Q: Are you saying you think it's more likely that it will be Tuesday before the revenue package is finished at this point?

Costa: "I think it's likely to be early next week, or it could go the other direction. There could be no agreement on recurring revenue, which means there's no agreement on borrowing, which means we're faced with a $2 billion-plus hole and folks go home, and we'll deal with it in September. That's not out of the realm of possibility either. We have about $30 billion in revenue. It's not like we need it right away."

Q: Would that be OK from your perspective to leave?

Costa: "No. I think we need to address what needs to be addressed. I think we need to resolve the outstanding issues and figure out the appropriate levels of recurring revenue to support a level of borrowing if we're going to do that so that we can, at a minimum, satisfy the rating agencies that we've done enough to protect and preserve our rating and then go and get it done. I don't want to wait until later in the year 'cause then it forces the governor to possibly take steps where he'd have to put money into budgetary reserves, and how do you pick and choose, how much or who has to worry about how they're getting 90 percent of what they were allocating."