It is no secret that our next state budget will be a challenging one. The pandemic-triggered tax losses in Pennsylvania could mean a large deficit we will need to fill.
No one, including Lancaster County residents, wants to see tax increases; that is not the answer, especially because the reason we are behind in tax revenue is because people are struggling. As a legislator, I talk to people all the time who have lost jobs and are trying to continue to support their family.
Fortunately there are ways to balance the next spending plan without boosting taxes.
Skill games can provide some of that much-needed revenue. Based on a study by a Villanova University economics professor, skill games will create close to $50 million in state tax revenue in 2021, assuming the current COVID-19-related restrictions continue through next year. That number will increase to $80 million if the economy fully reopens. Beyond that, the study estimates a steady state tax revenue stream of over $100 million a year.
If the skill game industry is regulated and an additional skill game tax is applied — which the industry is asking the state Legislature to implement — the amount of tax revenue will generate hundreds of millions in additional tax revenue. Increasing the state coffers any time is important, but right now it is critical for getting our commonwealth through the next budget cycle and back on steady ground.
Legal skill games are located in neighborhood pizza places, taverns, Veterans of Foreign Wars establishments and fraternal clubs in Lancaster County.
In fact, games of skill are breathing new life into American Legion facilities, Moose lodges and firefighting organizations across Pennsylvania. They also are helping bar and tavern owners who are being devastated by the COVID-19 economy by providing extra income.
Despite what some may say, skill games are not gambling devices on which winning is only a matter of chance. With skill games, the more you play, the more you learn about the game and the more your skill level increases.
Supporters want to make sure there is accountability for these legal skill games and are asking the General Assembly to pass legislation providing regulation and enforcement of the games — along with ample taxes going to the state from the industry. I agree with authorities that there is no place in the commonwealth for illegal games. This legislation would end that problem.
With more than 15,000 “Pennsylvania Skill” games in businesses and organizations around the state, a lot of people are reaping the rewards of the industry. Miele Manufacturing, which produces “Pennsylvania Skill” games in Williamsport, employs nearly 100 people with family-sustaining jobs.
The manufacturing of these machines requires the support of other Pennsylvania-based businesses for the sourcing of component parts and materials, including wood from Lancaster County. This in turn employs significant additional numbers of Pennsylvanians.
Across the state, charitable money from the games has gone to Make-A-Wish Foundation, the Salvation Army, Ronald McDonald House, Children’s Hospital of Philadelphia, Little League Baseball associations, volunteer firefighters and many other causes.
A lot is at stake as we lawmakers consider this legislation. People throughout the state will be watching us and seeing how we handle this difficult time. They should know that Pennsylvanians stand to benefit from the measure.
That is why legislators should pass the proposed legislation regulating the games. It will clarify existing law concerning the devices and help the state clean up the illegal market by providing money for stricter enforcement, which includes more stringent penalties for violations.
It also will make certain we have hundreds of millions of dollars added to the state coffers. I don’t want to see Pennsylvanians lose in the next state budget. Instead, with skill game revenue, we can support small businesses, eliminate the need for broad-based tax increases and balance the state budget.
State Rep. Jeff Wheeland is a Republican from Lycoming County.