State bails out Gaming Control Board

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HARRISBURG -- State Budget Secretary Michael Masch has figured out a way to keep the Pennsylvania Gaming Control Board from running out of cash as early as today.

Officials disclosed yesterday that the agency formed to regulate 14 casinos, which will rake in millions of dollars from slot machines, was on the verge of shutting down operations because it was nearly out of money to pay its expenses.

Mr. Masch, despite complaints from some Republicans, this week transferred $10.4 million to the gaming board from two other agencies, the state Department of Revenue and the state police.

Without that cash infusion, Mr. Masch said, the gaming board would not have had money to pay salaries, rent, office supply bills and other costs.

That would have severely crimped the board's ongoing plans to license up to six racetrack/casinos on Sept. 27, said board Chairman Tad Decker.

It also would have delayed the property tax relief that slots revenue will provide for Pennsylvanians, added Mr. Masch.

When the slots law was enacted in July 2004, it contained $36.1 million for the gaming board, revenue department and state police to use in implementing expanded gaming.

The revenue department was given $21.1 million of the total, but hasn't needed all of it. So $7.3 million was transferred to the gaming board in December. Now, another $6.6 million has been shifted from the department.

In addition, state police yesterday gave up $3.8 million of their initial appropriation of $7.5 million.

This new $10.4 million infusion will get the board through the end of the year.

By then, $30 million should be available in a new administrative account funded by the six licensed racetrack/casinos. Each one must pony up $5 million once it is open, which could be by the end of the year, if the licenses are approved by the board Sept. 27.

Some Republicans legislators and gubernatorial candidate Lynn Swann complained that Mr. Masch, appointed by Democratic Gov. Ed Rendell, should have gotten approval from the GOP-controlled Legislature before bailing out the gaming board.

"We think the unilateral transfer violates the appropriations section of the state constitution. It is, after all, the General Assembly that has the power of the purse," said Stephen MacNett, counsel to Senate Republicans.

But Rendell administration lawyers insisted that approval from the Legislature wasn't needed.


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