Nevada is still the gambling capitol of the world, but the crown for collecting the most in gambling taxes goes to Pennsylvania. Why then hasn’t the $1.1 billion windfall in Pennsylvania resulted in the property tax relief politicians promised when voters made gaming legal in the Keystone State?
When slot parlors were legalized in 2004, it was with the promise of school property tax relief. State Rep. Jerry Stern, R-Hollidaysburg wrote in a July 28 op-ed published in the Johnstown, Pa. Union-Democrat, “Gov. Ed Rendell’s campaign to legalize slot machines was based on using the revenue to reduce school property taxes by 30% to 35%. Yet, as of today, property taxes have been reduced only an average of 6% to 9%.”
The average Pennsylvania property owner has saved about $190 annually in property taxes since gaming was approved, Rep. Todd Rock, R-Franklin told the Herald-Mail of Hagerstown, Md.
The smaller than promised savings is, in part, because of the way Pennsylvania allocates its hefty gaming tax:
• 57% funds more gambling (12% subsidizes the horse racing industry and 45% goes straight back to the casinos.)
• 34% is earmarked to offset property tax relief
• 5% to economic development and tourism fund
• 4% to local and county governments
The allocation of taxes for table games, which were approved in January, work a little differently. Legislation allowing table games specifies that none of the resulting taxes go to the state’s Property Tax Relief Fund until after its Rainy Day Fund reaches $750 million, Stern said in his op-ed. With the Rainy Day Fund’s balance now at zero, “it will likely be a decade or more until homeowners see any benefit from table games,” he added. “The state is facing upward of a $2 billion deficit next year and school property taxes continue to rise, placing an additional burden on already-financially strapped taxpayers.”
