Senate ups ante on Pa. budget

It subpoenaed two Rendell aides to discuss furloughs.

Posted: July 06, 2007

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

The move came as tension escalated between Gov. Rendell and Senate Republicans in a bitter budget impasse that has the state's five casinos caught in the middle.

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

The state has operated without a budget since Sunday, and has notified about 25,000 employees not to show up to work next week unless a compromise is reached.

For Pennsylvania's slots parlors, millions of dollars in profits could depend on 14 state Revenue Department employees who are set to be furloughed Monday at 7 a.m.

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

"Clearly, the industry's become a political football," said Sen. Jane Earll (R., Erie), chairwoman of the Community, Economic and Recreational Development Committee, which held a hearing yesterday 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.

Problem is, the first two witnesses scheduled to testify didn't show.

Earll had asked Revenue Secretary Thomas Wolf and Office of Administration Secretary Joseph Martz to field questions at the hearing. But the administration said the two would not appear and called the hearing "ill-timed." The governor outlined his furlough plan to legislative leaders in May, and any hearings should have been held before now, the administration said in a letter to Earll.

Refusing to testify, Earll responded, 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 today.

Sen. Robert Tomlinson (R., Bucks), whose district includes PhiladelphiaPark Casino in Bensalem, said Rendell's strategy baffled him. Shutting down the slots parlors would only strengthen the resolve of those Senate Republicans who 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," added Tomlinson, who was among the 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."

Legislative committees rarely exercise their power to issue subpoenas to compel testimony. The last time was during the 1994 impeachment trial of Supreme Court Justice Rolf Larsen. Rendell, mayor of Philadelphia at the time, was among those testifying under a subpoena.

Rendell said yesterday afternoon that his top lawyers were reviewing the subpoenas.

Late last night, Senate Republicans said the administration could not make Wolf and Martz available today. They then asked whether the secretaries or their deputies would be available tomorrow. They were waiting for a response.

Earll said she hoped to ask the two about the Revenue Department workers in charge of the central computer and why they were deemed nonessential when so much was riding on them.

Rendell has answered that question several times at news conferences, and he repeated his answer yesterday.

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

About 52,000 of them would stay on the job and be paid even without a budget in place.

Some other state government-related functions would remain open even if they might not seem essential. Liquor stores would not close and lottery drawings would continue because those functions have their own funding source and are not directly part of the state's operating budget.

Senate Republicans are pushing a stopgap measure that would provide temporary funding to pay Revenue Department workers and avert a casino shutdown.

Meanwhile, House and Senate leaders met yesterday with negotiators for Rendell in what Republicans described as a productive session and were scheduled to meet again last night.

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.

Senate GOP leaders countered that they wanted 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 be disastrous for 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 near Pittsburgh, which opened its slots parlor less than a month ago.

Casino owners also fear a shutdown would damage all their efforts to attract customers from nearby states.

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

If the casinos close, reopening them will take at least three days, experts said yesterday.

"It's not like flipping a light switch back on," said Joseph Lashinger, a minority owner of Harrah's Chester Casino & Racetrack.

Lashinger, a former House Republican representing parts of Montgomery County, said 1,150 Harrah's workers would suffer the most from a forced closure.

The casino, once reopened, would continue to make money, he said, "but our workers can't get back the money they lost."


Working, Not Working

A look at how an extended budget impasse would affect some state services.

Functioning

Inspections for food and animal safety.

Processing of birth and death certificates.

Health care for the poor, food stamps, and cash assistance.

Drinking-water inspections.

Inspections of hospitals and nursing homes.

State police patrols.

Unemployment compensation and workers' compensation.

Liquor stores.

Lottery.

Not Functioning

Permitting for mining and oil- and gas-well drilling.

State park campgrounds.

Driver's license offices.

Grant programs.

Civil-service testing.

Museums and historic sites.

Slot-machine casinos.

Highway occupancy permits.

SOURCES: Governor's Office, Associated Press


Contact staff writer Mario F. Cattabiani at 717-787-5990 or mcattabiani@phillynews.com.

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