Law­mak­ers on spot to re­vive in­tensely po­lit­i­cal casino tax

Daily Local News (West Chester, PA) - - NEWS - By Marc Levy The As­so­ci­ated Press

HARRISBURG >> A court de­ci­sion that has hacked a ma­jor chunk out of Penn­syl­va­nia’s heav­ily ne­go­ti­ated casino gam­bling law is prompt­ing fear among law­mak­ers who rep­re­sent casino dis­tricts that their com­mu­ni­ties may never re­coup the tens of mil­lions of gam­bling tax dol­lars they’ve en­joyed over the past decade.

The state Supreme Court, in an opin­ion re­leased late Wed­nes­day, ef­fec­tively ends the flow of more than $140 mil­lion that Penn­syl­va­nia’s 12 casi­nos pay an­nu­ally to lo­cal govern­ment bud­gets, in­sti­tu­tions and projects in Philadel­phia and 11 coun­ties.

The guar­an­tee of casino cash for com­mu­ni­ties was an in­te­gral part of the orig­i­nal 2004 law, ne­go­ti­ated be­hind closed doors and nec­es­sary to se­cure a hand­ful of ex­tra votes to le­gal­ize casino-style gam­bling in Penn­syl­va­nia for the first time.

But now a new Leg­is­la­ture must con­struct a for­mula to re­place the money, if casi­nos are go­ing to be re­quired to keep sub­si­diz­ing host com­mu­ni­ties, and there may not be enough sup­port in the Leg­is­la­ture to re­vive a pro­vi­sion that sim­ply helps the casi­nos’ host com­mu­ni­ties.

Rather, law­mak­ers with­out a casino near their dis­trict might de­mand some of that money for their com­mu­ni­ties, or they might de­mand an ex­pan­sion of casino-style gam­bling that would bring tax dol­lars to their dis­tricts. Al­legheny County Rep. Nick Kotik, the rank­ing Demo­crat on the House Gam­ing Over­sight Com­mit­tee, said he wouldn’t be sur­prised to see 100 dif­fer­ent amend­ments posted by law­mak­ers to any un­der­ly­ing bill.

“I’m very con­cerned about the po­ten­tial loss of funds needed for projects in our com­mu­nity,” said Sen. Rob Teplitz, D-Dauphin, whose cen­tral Penn­syl­va­nia dis­trict in­cludes Hol­ly­wood Casino, which pumped more than $14 mil­lion into Dauphin County and East Hanover Town­ship last year. “And I fear that open­ing up the gam­ing law to address the court’s con­cerns could pro­duce a free-for-all that could jeop­ar­dize that fund­ing even fur­ther.”

Cash-strapped mu­nic­i­pal­i­ties Beth­le­hem, Ben­salem and Ch­ester count on more than $28 mil­lion com­bined ev­ery year.

In its rul­ing, jus­tices agreed with casi­nos that the for­mula that dic­tates how much money casi­nos must pay their host com­mu­ni­ties was un­con­sti­tu­tional be­cause it im­posed a dif­fer­ent fi­nan­cial bur­den on each casino, and a heav­ier one on lower-per­form­ing casi­nos.

The high court gave law­mak­ers four months to come up with a new for­mula be­fore the rul­ing takes ef­fect.

Sen­ate Mi­nor­ity Leader Jay Costa, D-Al­legheny, whose dis­trict gets lo­cal tax dol­lars from the Rivers Casino in Pitts­burgh, said the Leg­is­la­ture could vote as early as Oc­to­ber to pass a new rev­enue for­mula that is de­signed to pass con­sti­tu­tional muster. But, he said, it will take longer and be­come more com­pli­cated if law­mak­ers widen their fo­cus to in­clude an ex­pan­sion of casino gam­bling or to change the dis­tri­bu­tion of the lo­cal casino rev­enue.

The money had been ne­go­ti­ated into the casino leg­is­la­tion in 2004 af­ter the bill’s pro­po­nents, pri­mar­ily Democrats and thenGov. Ed Ren­dell, needed to se­cure Repub­li­can votes in the GOP-con­trolled Leg­is­la­ture to pass it.

“I was lit­er­ally buy­ing votes at that time by adding things for lo­cal gov­ern­ments,” said Vin­cent Fumo, the for­mer Demo­cratic sen­a­tor from Philadel­phia who was a key ar­chi­tect of the law. Kotik said rank-and-file law­mak­ers had lit­tle in­sight into the ne­go­ti­a­tions, call­ing them a “best-kept se­cret,” and that many re­al­ized only af­ter the vote how the cash would be dis­trib­uted.

Ul­ti­mately, Fumo got the Repub­li­can votes he needed, and law­mak­ers jus­ti­fied the dol­lars for lo­cal gov­ern­ments as a way to off­set the need for more po­lice officers and road im­prove­ments to han­dle the forth­com­ing casi­nos. Now, Fumo sus­pects that the Leg­is­la­ture will be un­will­ing to sim­ply re­vive a pro­vi­sion that re­wards casino com­mu­ni­ties. In­stead, he pre­dicted that any re­place­ment pro­vi­sion will dis­trib­ute casino cash statewide.

“They’re all go­ing to say ‘I want a piece of the ac­tion,’” Fumo said, “even if they’re 100 miles away” from a casino.

The guar­an­tee of casino cash for com­mu­ni­ties was an in­te­gral part of the orig­i­nal 2004 law, ne­go­ti­ated be­hind closed doors and nec­es­sary to se­cure a hand­ful of ex­tra votes to le­gal­ize casino-style gam­bling in Penn­syl­va­nia for the first time.

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