Rendell officials subpoenaed over pending furloughs

Posted: July 05, 2007

HARRISBURG - Wielding a power not used for more than a dozen years, a Senate panel today issued subpoenas ordering two Rendell administration officials to testify about pending worker furloughs that could force the state's nascent casino industry to shut down.

The rare move came as tension escalated between Gov. Rendell and Senate Republicans, aggravating an already bitter budget impasse that now has Pennsylvania's five casinos caught in the middle.

"This is Alice in Wonderland, and the Mad Hatter is in charge," Rendell said of the subpoenas shortly after they were issued.

Since Sunday, the state has operated without a budget, and has told about 25,000 employees to not show up for work next week unless a compromise plan is reached.

For Pennsylvania's slots parlors, millions in profits could come down to 14 state Revenue Department employees who could be furloughed Monday at 7 a.m.

Those are the employees who monitor the state's centralized computer system, which tallies Pennsylvania's share of all slot wagers. Without those technicians and clerks working, slot machines must, under state law, go silent.

"Clearly, the industry has become a political football," said Sen. Jane Earll (R., Erie), chairwoman of the Community, Economic and Recreational Development Committee, which held a hearing today to examine the impact that a partial government shutdown would have on slots parlors and the $1.7 million they generate daily in state revenue.

The problem is, the first two witnesses scheduled to testify never showed.

Earll had asked Revenue Secretary Thomas Wolf and Office of Administration Secretary Joseph Martz to attend the hearing and field questions. But the Rendell administration said the two wouldn't show and called the hearing "ill-timed." The governor outlined his furlough plan to legislative leaders in May. If hearings were needed, they should have been held before now, the administration said in a letter to Earll.

That set her off. Refusing to testify, Earll said, was "the height of arrogance."

Later in the day, the GOP-controlled committee voted along party lines to issue subpoenas to compel Martz and Wolf to testify when the hearing resumes at noon Friday.

Sen. Robert Tomlinson (R., Bucks), whose district includes PhiladelphiaPark Casino in Bensalem, said he was baffled by Rendell's strategy. Shutting down the slots parlors would only strengthen the resolve of Senate Republicans, many of whom already oppose gambling and would love nothing more than to see casinos closed, he said.

"I'm having a difficulty understanding this play by the governor," said Tomlinson, who was among a few Senate Republicans to side with Rendell in 2004 and vote to legalize slot machines.

Sen. Jay Costa (D., Allegheny) tried to block the subpoenas, arguing that they were meant only "to beat up on the administration."

Rendell said today that his top lawyers are reviewing the subpoenas and he wasn't sure whether Martz and Wolf would testify Friday.

Earll said she hoped to ask the two about the revenue department workers in charge of the centralized computer and why they are deemed nonessential when so much was riding on them.

Rendell has already answered that question several times at recent news conferences. He repeated his answer today.

Federal court cases, he said, have established that only state employees deemed critical to the health, welfare and safety of the public can continue working during a budget impasse.

About 52,000 of them - from state police to welfare caseworkers - will stay on the job and be paid even without a budget in place.

Meanwhile, House and Senate leaders met today in what Republicans described as a productive session and were scheduled to meet again tonight.

But Rendell, who has held firm on his demand that the legislature act on increased transportation funding and his health-care initiatives and energy plan, said he and the Senate Republicans were "nowhere near agreement" on a budget deal.

Senate GOP leaders countered that they want to get the budget done first and talk about other initiatives later.

The state-government shutdown in New Jersey that closed Atlantic City's 12 casinos for three days last July cost the industry about $51 million in gambling revenue.

Casino operators in Pennsylvania hope it doesn't happen here. It could have disastrous results to their business models, they say.

Both sides in the budget impasse "are using our fledgling industry as a pawn and we think, quite frankly, that's pretty unfair," said William Paulos, president of the Meadows Racetrack & Casino in suburban Pittsburgh, which opened its slots parlor less than a month ago.

Casino owners also fear that all their efforts to attract customers away from nearby states would be damaged by a forced shutdown.

"Slot customers are very capricious. They will go to another facility," said Ted Arneault, president and CEO of MTR Gaming Group Inc., which owns Presque Isle Downs, near Erie.

Contact staff writer Mario F. Cattabiani at 717-787-5990 or

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