Pennsylvania must devote table-game revenue to property tax relief
Gov. Ed Rendell went into seclusion last week to sign the bill to bail Pennsylvania out of its long-running budget disaster. He said he took no joy in affixing his name to legislation allowing slots casinos to offer table games, primarily because the bill is flawed.
Well, of course. All legislation is.
Said Rendell: “I have serious misgivings about ’sin’ taxes as a way to go. There is no sense of celebration.”
We’ll second that, but here’s what the governor and legislators should have said: Even with a quick shot of revenue — about $200 million in license fees, to plug a hole in the current budget and avoid Rendell’s threatened layoff of 1,000 state workers — the state still didn’t solve a recurring, structural budget mess. It didn’t learn to live within its means; it decided to entice a wider class of problem gamblers to live beyond theirs.
Here’s what the gambling bill will accomplish:
State-related universities, including Penn State and other institutions caught up in the budget impasse, will be able to get on with their programs.
The state gets a windfall of $200 million in license fees, plus a bump in annual revenue from the added games. Counties and cities near casinos — including those affected by Bethlehem’s casino — will get a small slice of the proceeds.
The addition of table games will help some casinos become more full-service destinations. The Sands Casino Resort Bethlehem, for example, expects to tackle its unfinished hotel and retail area.
What’s not to like? Plenty.
Pennsylvania’s gain means more red numbers for New Jersey’s budget. Atlantic City casinos will take another hit when bettors can play poker, blackjack, craps, etc., closer to their homes. And New Jersey’s budget crisis is much worse that Pennsylvania’s.
Pennsylvania casinos will be allowed to extend loans to bettors. Casinos see this as critical to run table games, but it’s devastating to those who can’t resist dipping into debt to try to reverse losing streaks.
There are new limits on campaign contributions from casino interests, but the bill has enough loopholes to make sure the money seeps through.
Pork. To get this bill passed, several legislators insisted upon grants for pet projects in their districts.
Here’s the worst news: While the original slots legislation was paired with property tax relief, there’s no such promise here. In the first few years, at least, the additional revenue will go to the state to help balance recession-plagued budgets. Yet taxpayers are in the same fix.
Tax relief from slots has been underwhelming — an average 11 percent reduction on bills, much lower than the predictions of 25 to 40 percent. The Legislature needs to “sunset” table-games revenue going to the treasury — say, a year or two to stabilize the budget — and then give it back to the rightful recipients: