HARRISBURG -- The political feud between Gov. Ed Rendell and Senate Republicans over a new state budget intensified yesterday as a Senate committee voted to subpoena two top administration officials to find out why the state's five casinos may be shut down Monday morning.
|
|
|||
After Revenue Secretary Thomas Wolf and Administration Secretary Joseph Martz failed to appear voluntarily for questioning, the Senate Finance Committee voted along party lines to require them to show up today. Senators want to ask why a handful of Revenue Department computer operators were classified as "nonessential" and thus are to be furloughed without pay on Monday, forcing the five racetrack casinos to close.
The Senate's move to issue the subpoenas -- something that hasn't happened since 1994 -- was led by Sen. Jane Earll, R-Erie. She said she's concerned about shutting down the casinos, which generate $1.7 million a day in state gaming taxes. She's especially concerned about closing Presque Isle Downs, a casino that opened in her district on Feb. 28. It employs 700, with more to be hired when a racetrack opens there in September.
Shutting down the casinos is one highly publicized result of the ongoing, increasingly hostile budget standoff between Democrat Rendell and Republican senators. If a budget deal can't be reached by Sunday night, it also would cause the shutdown on Monday of state parks, including Presque Isle State Park, a popular Erie destination in Ms. Earll's district, as well as all other state parks, forests, museums, historical sites and other facilities.
Ms. Earll said she can't understand why the five casinos would be shut down when the Pennsylvania Gaming Control Board ended the 2006-07 fiscal year on Sunday with a cash balance of $2.9 million. She wants to know if some of that money can be transferred to keep eight computer workers on the job.
They operate the state's central computer control system, which is connected to 10,000 slot machines around the state. Since closing the five casinos will cost the state an enormous amount of revenue, she said the workers seem essential to her.
Mr. Rendell assailed the subpoenas as "ludicrous" and said his lawyers are looking at whether they must be obeyed. He said he wasn't the one who decided which state workers are essential or nonessential. Those judgments were based on the federal Fair Standards Act and past court decisions.
Only workers who are vital to state "health, safety and welfare" can be called essential, and "by no stretch" would computer operators or casino workers fall into this category, he said.
"Casinos are clearly outside the category of 'essential' workers," he said. To say they're essential "is like Alice in Wonderland."
Essential workers, he said, are state police, prison guards, emergency service workers and welfare caseworkers.
Shutting down the casinos would hurt state coffers. Since the first one opened in November, the state has gotten $554 million from the casinos -- $300 million from one-time license fees of $50 million paid by the six licensed casinos and $254 million in tax revenue. The money goes for property tax relief, aid to local governments where the casinos are located, aid for horse breeders and trainers, and an economic development fund that will help pay for a new hockey arena in Pittsburgh.
"All of us in government need to find a way to keep the business of government open and operating," said Ms. Earll. "I find it unconscionable that we can't find money to keep eight people on the job and keep the casinos operating."
Without those eight workers who run the central computer system for the slot machines, the state can't be sure it's getting its full amount of tax revenue, said gaming board Director Anne Neeb. So without the central computer workers, the casinos would have to close and lay off their workers.
All told, about 25,000 nonessential state workers will be put on unpaid furlough Monday morning if a new $27 billion state budget hasn't been agreed to by then. Also, a total of 3,500 workers at the five casinos would be temporarily laid off.
Nine GOP senators voted to subpoena Mr. Wolf and Mr. Martz to testify today, with five Democrats voting no. Democrats including Sens. Jim Ferlo of Highland Park and Jay Costa of Forest Hills claimed the subpoenas were "illegal" because Ms. Earll never told the committee that votes would be taken yesterday.
The Democrats said a 24-hour notice had to be given before a subpoena vote could be taken, but Republicans said the vote was proper.
Issuing subpoenas to administration officials "is an extraordinary event" and "a partisan ploy," said Christopher Craig, a lawyer on the staff of Sen. Vincent Fumo, D-Philadelphia. He said he couldn't recall a Senate committee issuing subpoenas since the 1970s, but GOP attorneys said the last time it happened was in 1994, as part of the legal proceedings against then-Supreme Court Justice Rolf Larsen.
Amid the political jousting, Ted Arneault, chief executive officer of Presque Isle Downs, told senators that a shutdown of Pennsylvania casinos could make investment bankers more leery about lending money for casino projects and expansion in the state.
"If doubts arise about the cash flow from Pennsylvania casinos, it could affect [getting money for investments]," he said. "In business it's all about cash flow. Wall Street hates any unknowns."
Bill Paulos, president of The Meadows Racetrack & Casino in Washington County, said a casino shutdown would put out of work 505 local employees and harm area vendors who are paid a combined $16,000 per day to provide goods and services to the facility.
He said the state should be worried about "making its gaming industry part of a political process that creates business instability. In light of recent budget years and the threat that currently exists, the thought of a budget impasse leading to annual shutdowns is extremely concerning to us and the financial community, which is currently supporting and considering pending gaming projects in Pennsylvania."
The 1,738 slot machines at The Meadows have been busy since opening June 11, generating about $2 million weekly for the operator and $2.5 million weekly for state and local governments.
Mr. Paulos said that because gaming operators made extensive investments to meet state requirements for licensing and opening, they "should be freed from an annual political budget process that can adversely affect so many lives."
Jim Wise of Mohegan Sun at Pocono Downs, the first casino to open in Pennsylvania last year, said little information about a potential shutdown has been distributed to employees or customers, because "things can change at a moment's notice."
If there is a shutdown, he said, it would be at an unfortunate time because of high tourist travel.
The casino near Wilkes-Barre has been sharing about $3.5 million in weekly revenue with the state.
"Where else could you pay a $50 million fee to operate and then receive a note within the first few months of operations saying you have to shut down because of something completely outside of your control?" asked Mr. Wise.
