FUMO ASKS SMITH TO RELEASE HIS TAX CUT PLAN

HARRISBURG, January 20, 2004 – State Senator Vince Fumo (D-Philadelphia) sent the attached letter today to House Majority Leader Sam Smith.

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(On Fumo Senate of Pennsylvania Stationary)

January 20, 2004

 

The Honorable Samuel H. Smith
Room 110, Main Capitol
Harrisburg, Pennsylvania 17120

Dear Sam,

Since the early morning hours of December 20, when negotiations ended on a bill to legalize slot machine gambling to provide tax relief, I have been waiting to hear an explanation of your opposition, or to hear your alternative proposal for funding property and wage tax cuts.

Since I’ve heard only rhetorical finger pointing from your office during the recess, I’m writing to you directly in the hope that you will respond with some positive policy proposal. We really have to get moving on this issue.

Now that we are back in session and a new year has begun, it is time to get serious about providing property tax relief for the people of Pennsylvania and wage tax relief for Philadelphians. In fact, it is past time. The public is eager for us to act. (I realize that Speaker Perzel is supposedly in favor of legalizing slots and you are supposedly against, but as I said, it’s time to get serious about tax relief, so I’m going to ignore your good cop/bad cop antics and treat the two of you as what you are, the leadership team of the House Republican caucus. And since you are the one who has been communicating over-heated, hyperbolic messages to your rank and file on the issue, I’ll assume you are representing your caucus leadership viewpoint.)

I have been reading and listening to your statements intently, but still your plan for funding tax relief isn’t clear to me. As I understand it, and as your negative vote on HB 623 on July 19 indicates, you are opposed to the legalization of slot machine gaming in Pennsylvania. You have insisted that I change a provision regarding the regulation of Indian gaming in my proposal, but if I change it, you haven’t said that you will then support the legalization of slots. So, if you are a "no" vote on slots either way, how do you propose to pay for property and wage tax cuts?

You have never provided a reason for opposing the regulation and taxation of Indian gaming, but after reading your Jan. 17 memo to your caucus membership, I’m beginning to believe it is rooted in misunderstanding. In that memo, you made this statement, referring to me:

"I don’t understand how he has convinced his Senate Democrat colleagues to stand with him on behalf of even more expansive Indian ‘owned’ casinos."

Of course, this is a completely inaccurate characterization of the Indian gaming proposal –– 180 degrees. What my colleagues and I are trying to do is prevent more expansive Indian-owned casinos in Pennsylvania.

My proposal would allow an Indian tribe to apply for one of our state-licensed slot parlors. It would be regulated and taxed the same as all the others. It would be completely under our governance, subject to the same fees, rules and restrictions as other slot parlors.

If we do not include that provision, then we do indeed run the risk of more expansive Indian-run gambling operations, because if they successfully press their claim under federal law, they would be able to operate what you refer to elsewhere in your memo as "full casinos," unregulated and untaxed.

This, however, is only one problem we will face. If we have full-fledged Indian casinos in Pennsylvania, they will compete advantageously against our state-licensed parlors and undermine the revenue source upon which we will depend for tax cuts.

Perhaps now you understand why so many of my colleagues are standing with me. It really didn’t take much convincing; they took a few minutes to think about the issue. They realize that if we have competition from Indian casinos within our borders, it is quite possible we won’t be able to raise the $1 billion from slots that we need for property and wage tax relief. They realize it is far better for us to offer Indians the opportunity to come under the state regulatory and taxation umbrella.

Now that I have cleared up your confusion, I hope you will be willing to support a provision to regulate and tax an Indian slots operation in Pennsylvania. There really is no reason not to. At least I’ve yet to hear one. (That’s probably another reason that so many people who are "yes" votes on slots are standing with me on Indian gaming. You haven’t persuaded them not to. As far as I can tell, you haven’t even tried.)

But the bottom line is this: We have a viable plan on the table to cut wage taxes in Philadelphia and property taxes in the rest of the state, and it has solid backing in both chambers. Most of the people who support that plan want the Indian gaming provision included, because it protects the revenue stream that the commonwealth will rely upon to offset the tax cuts.

So if you aren’t going to support that plan, then it’s your turn to stop beating your chest and explain to the people of our state why you do not believe Indian gaming should be taxed and regulated. You and Rep. Perzel are, after all, leaders of the majority party in the General Assembly. If you don’t like our ideas, come up with another way to provide critically needed tax relief –– but don’t send mix messages and create nonsensical excuses for holding up progress.

Please respond soon. I can’t wait to hear your ideas, and the people can’t wait for their tax cuts. I am genuinely excited about working together to achieve this great victory for Pennsylvania.

Sincerely,

(Signed)

VINCENT J. FUMO

State Senator