HARRISBURG -- House Democrats tonight rejected a tentative $27.9 billion budget deal that had been reached with the Senate, which could cause additional lengthy delays in resolving the state's 2009-10 budget situation.

The Democrats, who control the House by a 104-99 margin, rejected two key revenue-raising elements in the 2-week-old budget proposal. They rejected a proposed 20 percent tax on "small games of chance'' run by fraternal groups, and also rejected the idea of extending the state sales tax to arts and cultural event tickets.

To make up for that loss of revenue, House Democrats tonight endorsed a proposed severance tax on natural gas pumped from underground areas of Marcellus shale throughout the state. Senate Republicans are staunchly opposed to that tax, and it almost certainly will be a major stumbling block in future budget talks.

In another controversial move, the House Democrats decided to impose a tax on cigars and smokeless tobacco, a step that legislators have until now been reluctant to take.

The House Democrats also significantly increased a proposed tax on revenue from table games at casinos -- instead of a 12 percent or 18 percent tax, it would be 34 percent on table games. Also, instead of a one-time table games license fee of $10 million, casinos would have to pay a $20 million fee.

The new Democratic tax plan was approved along party lines by the House Rules Committee tonight and will be voted on Friday night by the full House. It is expected to be approved, again along party lines, and sent to the Senate, but the likelihood of it being approved in the GOP-controlled Senate is slim.

House Democratic leader Todd Eachus said the tax on small games of chance run by firehalls and veterans groups -- as well as extending the sales tax to arts tickets -- "were complete nonstarters for our caucus.''

Those two tax elements were part of a three-caucus budget deal announced two weeks ago by Senate Republicans and Democrats and House Democratic leaders. But after two days of closed caucus meetings on the budget, rank-and-file Democrats made it clear to their leaders that they wouldn't vote for those two taxing options.

Other parts of the three-caucus budget deal are included in the just-adopted House Democratic package, including increasing the amount of state forest land that will be available for natural gas drilling, a tax amnesty program for people who still owe state taxes and a 33 percent cut in existing tax credit programs, including one for film credits.

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