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Lottery Debate Dominates Several Budget Hearings

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As Governor Tom Corbett mulls his next steps, Revenue Secretary Dan Meuser spent the bulk of his House budget hearing defending the recently-rejected Lottery contract.  Meuser remarked that the premise for much of the opposition is wrong.  “There’s no plan to sell the Lottery.  We cannot by federal or state law.  There is no plan to relinquish control of the Lottery.  We maintain full control of the Lottery,” he emphasized.

At issue is the private management agreement the Corbett administration negotiated with Camelot Global Services, in which the private company has guaranteed record profits over the next 20-years.  The administration has been working on this for nearly a year, because the demand for senior services is growing at a pace that’s too rapid for the Lottery Fund to sustain. 

On Valentine’s Day Attorney General Kathleen Kane called that contract illegal and unconstitutional, and she rehashed that decision in front of the Senate Appropriations Committee on Wednesday.  Kane’s main points were: 1) the contract infringed on the legislature’s authority, and 2) KENO is not an authorized game under the Lottery Act. 

“I am not an economist and I don’t pretend to be, I am a lawyer, and we went through the statutory construction of the Gaming Act, the Lottery Act, as well as the General Assembly’s authority,” Kane said as she told the panel this was not a policy decision. 

Revenue Secretary Dan Meuser

Revenue Secretary Dan Meuser

But Secretary Meuser disagreed with both of Kane’s major points at his House hearing one day earlier.  “The law clearly states – laws granted by the legislature – granting the Department of Revenue the ability to hire vendors for the effective and efficient growth of the Lottery, and to promulgate new games. 

Meuser also contends that KENO – which was rolled out in nearby Ohio a few years ago – falls within the scope of the Lottery’s terminal-based game regulation, not the “slot machine” definition of the Gaming Act.  He says KENO would us the same algorithm as some exiting Lottery games. 

In lieu of a protracted legal debate, some Democratic lawmakers are calling on Governor Corbett to work with the General Assembly to maximize Lottery revenues in-house.  Also, one Republican lawmaker plans legislation to authorize KENO while barring online, interactive Lottery games.

House Votes to Update Caregiver Program

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Vicki Hoak is executive director of the Pennsylvania Homecare Association.

Vicki Hoak is executive director of the Pennsylvania Homecare Association.

Pennsylvania’s Family Caregiver Support Act was written to reimburse eligible families for expenses relating to caring for an older adult at home, but reimbursement rates have never increased and restrictive guidelines have kept many families on the outside looking in.  “In fact, these restrictions have led to almost $1-million dollars going unspent last year,” says executive director of the Pennsylvania Homecare Association Vicki Hoak.  That’s despite a waiting list for the program. 

The state House voted unanimously (199 – 0) for a bill that would ease those restrictions to allow non-relatives into the program, and increase the maximum monthly reimbursement rate from $200 to $500 dollars.  “I developed a keen interest in the program, and became concerned with the fact that despite the obvious increase in our cost of living, since the program began in 1990, the reimbursements to caregivers were never adjusted upward,” says the bill’s prime sponsor Matt Baker (R-Tioga/Bradford), who has personal experience as a family caregiver.   

Advocates say seniors want to age in their own homes, and State Rep. Phyllis Mundy (D-Luzerne) points out that it’s far less costly to care for a person at home than in an institutional setting.  “The economic value of Pennsylvania’s caregivers has been estimated in the billions,” Mundy said on the House floor.  “Without the support of these unsung heroes, our commonwealth would face even greater fiscal challenges.” 

This is the fourth time the House has passed such a bill, and Rep. Baker hopes this is the year it makes it past the goal line.  He says the Corbett administration has indicated its support.  Up next for HB 210 is the State Senate, where Kim Ward (R-Westmoreland) has introduced a companion bill.  The Family Caregiver Support Program is funded through the Pennsylvania Lottery.

Lottery Fund

House Committee Wants to Study PA Lottery

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The State House Aging and Older Adult Services Committee has unanimously signed off on a comprehensive study of the Pennsylvania Lottery.  “I think it’s going to bring out a number of factors that we really need to consider, because we know that the Lottery system really does provide a lot of revenue for programs that benefit senior citizens,” says State Rep. Martin Causer (R-McKean), the prime sponsor of HR 106.  Causer spoke briefly to the committee, last week, before his legislation was brought up for a vote.  The study would be conducted by the Legislative Budget and Finance Committee, and officials say the cost would be minimal. 

The Pennsylvania Lottery’s contribution to programs and services that benefit older Pennsylvanians is anything but minimal.  “The Lottery, over the course of its existence, has contributed over $19-billion dollars to funding for senior programs,” says State Rep. Tim Hennessey (R-Chester), chairman of the Aging and Older Adult Services Committee.  Since the last study of the Pennsylvania Lottery was conducted in 1994, Hennessey thinks HR 106 is a good idea: “To see in a sense how solvent it is and what it looks like going forward.” 

The largest program supported by the Lottery Fund is the Property Tax and Rent Rebate program, which was expanded with the advent of casino gaming in 2006.  PACE is the second biggest program paid for with dollars from the Lottery Fund; it provides prescription drug benefits to older Pennsylvanians.  According to a financial statement contained in Governor Tom Corbett’s budget proposal, the Lottery Fund is expected to begin the new fiscal year with a balance of $133-million dollars.  It also projects $3.14-billion dollars in gross ticket sales, which is up slightly from the current year.     

Rep. Causer told the committee that budgetary factors have changed since 1994, and casino gaming has been introduced, so it’s time to re-do the study.  Up next for HR 106 is the House floor.