Gambling on pensions

Posted: May 18, 2012

Once in awhile something gets dropped into the state legislative hopper more interesting than the usual bridge-naming and nonsense.

Take Rep. Paul Clymer’s bill to address the public pension crisis by charging casino-goers a $2 cover charge.

Yeah, I know, nobody going gambling wants to start with a sure loss. But the pension thing is real ugly and getting uglier every year.

So the Bucks County Republican, long a gambling opponent, wants each patron entering any of the state’s 11 casinos to take one (well, actually give two) for the team.

He says they can pony up a pair of singles or casino owners can put in turnstiles, count incomings and forward the dough to the state.

(Not sure how that second option might work.)

The new revenue would be split between the State Employees’ Retirement System and the Public School Employees’ Retirement System.

Both are a mess thanks to a 2001 law signed by then-Gov. Ridge increasing most lawmakers’ pensions 50 percent and other public servants’ 25 percent.

Then came the recession and now taxpayers are stuck for $1 billion-plus this year and $4 billion by 2016, according to the state’s Independent Fiscal Office.

Oh, and the state Constitution prohibits curtailing pension benefits for current or retired employees.

So somebody somehow has to come up with a boatload of money.

Nobody seems to know how much money Clymer’s bill could collect, but it’s surely tens of millions and at least a start; or part of a start.

Clymer says neither the Revenue Department nor the Gaming Control Board is hazarding guesses on what the fee would yield. And state gaming law does not require casinos to count patrons, though (of course) many other states do.

“I actually thought about this back when other states started riverboat gambling and charged $5 for anyone to get on board,” Clymer says. “Our two pension funds are in dire need and $2 a-head is certainly reasonable.”

There is precedent. Indiana, with 13 casinos, has a $3 per person charge and Missouri, with 12 casinos, charges $2.

The industry surely hates the idea in Pennsylvania. We already tax gambling at one of nation’s highest rates, 55 percent, with revenue going to local and state government, public schools, volunteer firefighters, horse racing and more.

And no state produces more gambling tax revenue. We took in $1.5 billion last year, a 10 percent increase from 2010, according to an industry survey.

Clymer’s bill is in the House Gaming Oversight Committee, of which he’s a member. The committee’s chair, Rep. Tina Pickett, R-Bradford County, says, “I think it’s something we should consider and look at.”

There’s even buzz that no-tax Gov. Corbett could get behind it because it’s a user fee. But Corbett press secretary Kevin Harley says in an email that “must be a rumor; we have not taken a position.”

Still, even though the gaming industry likely has the clout to kill it, and even though new or different ideas are rarely winners in the legislature, this is one that deserves a full airing.

It can’t end pension woes, but it can help.

States required to count patrons offer some idea of how much it can help.

According to data collected by the American Gaming Association, Indiana’s casinos had 25 million visitors last year and New Jersey’s 11 casinos had 28 million.

I’d note that Jersey’s gaming revenue is dropping (down 7 percent) while Pennsylvania’s rising (up 21 percent), again according to industry data.

Simple math suggests Clymer’s bill could pick up a pretty pot and provide a piece of the solution to the pension problem.

Question is will lawmakers ante up enough votes to make it happen?

For recent columns, go to philly.com/JohnBaer. Read his blog at philly.com/BaerGrowls.

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