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Budget relies on new revenue streams (skill games, adult‑use cannabis); committee highlights IFO disagreement
Summary
The governor's budget counts sizable revenue from proposed skill‑game licensing and adult‑use cannabis. Members noted wide differences with the Independent Fiscal Office estimates; Secretary Munson defended administration assumptions and said teams studied other states and existing medical marijuana infrastructure.
The administration's revenue package includes projected receipts from licensing and regulating skill games and adult‑use cannabis. Committee members repeatedly flagged large differences between the budget's revenue estimates and those the Independent Fiscal Office (IFO) published.
Why it matters: The administration's revenue assumptions for these new streams materially affect the budget picture. Committee members asked why the IFO's first‑year estimate was roughly $80 million while the administration's first‑year assumption was much larger (the budget document's estimate for the first year was several hundred million higher), and why cumulative differences across planning years could reach billions.
Secretary Munson said the administration's teams studied other states and the existing Pennsylvania medical marijuana infrastructure and concluded that licensing, fee structure and the number of machines/retail sites justify higher estimates. "We have more games than we originally expected ... we're recommending 30,000 in year 1 and then growing ... I think they vastly underestimated the per skill machine amount," Munson said.
Munson also argued that recreational cannabis activity is already occurring in neighboring states and that some product and activity cross state lines now; regulation in‑state would allow the Commonwealth to capture revenues and establish a regulatory framework to mitigate harms.
Some members called for the administration to publish the underlying models, licensing assumptions and fee schedules; Munson said the administration is preparing documentation and would share it with the committee.
