Fix­ing flaw in Pa. casino law should be easy

This shouldn’t take 120 days. Com­pared to other prob­lems on the Penn­syl­va­nia Leg­is­la­ture’s agenda, fix­ing the con­sti­tu­tional flaw in a casino rev­enue-shar­ing law should be an easy fix.

Daily Local News (West Chester, PA) - - FRONT PAGE -

Fix­ing the con­sti­tu­tional flaw in a casino rev­enue-shar­ing law in Penn­syl­va­nia should be an easy fix.

Still, Harrisburg is where good in­ten­tions turn into par­ti­san crap-outs. Let’s hope law­mak­ers can see the wis­dom of keep­ing a pipeline of gam­bling pro­ceeds open to host towns that rely on it. The city of Beth­le­hem has a huge stake in this.

Here’s the prob­lem: Last month the state Supreme Court ruled, in a suit brought by the own­ers of Mt. Airy Casino Re­sort, that a three-tiered way of split­ting a share of slot­ma­chine rev­enues with mu­nic­i­pal­i­ties is un­con­sti­tu­tional. The law says each casino must ante up $10 mil­lion a year or 2 per­cent of its slots pro­ceeds, which­ever is greater, and dis­trib­ute it to towns to help with polic­ing, fire­fight­ing, road re­pairs or other public needs. Casi­nos in Philadel­phia are cov­ered by a sep­a­rate rev­enue­shar­ing pro­vi­sion.

That ar­range­ment vi­o­lates the state con­sti­tu­tion’s re­quire­ment on uni­form tax­a­tion, the high court said.

Why this is­sue was even lit­i­gated is a fair ques­tion. All the state’s casi­nos out­side Philadel­phia have paid $10 mil­lion each year for the last eight years, be­cause they don’t make enough in slots to reach the 2 per­cent thresh­old.

The rem­edy seems sim­ple — choose a flat fee or a per­cent­age.

Host towns such as Beth­le­hem are fac­ing sub­stan­tial rev­enue gaps, just as the plan­ning for the 2017 bud­get year is get­ting un­der way.

The city is an­tic­i­pat­ing about $9.8 mil­lion in rev­enue shar­ing from the Sands Casino Re­sort Beth­le­hem in 2016. Over­all, the casino sup­plies about 12 per­cent of the city’s bud­get — the equiv­a­lent of 100 po­lice of­fi­cers.

Busi­ness Ad­min­is­tra­tor David Brong said the city is ask­ing Sands of­fi­cials to con­sider a stop-gap ar­range­ment to keep quar­terly pay­ments flow­ing. If that’s not ac­cept­able, the city will take out a short­term loan in an­tic­i­pa­tion of the rev­enue, Brong said, adding that Sands of­fi­cials seemed open to ne­go­ti­a­tions. (A sep­a­rate rev­enue stream from ta­ble games, which pro­vides Beth­le­hem with $1.1 mil­lion a year, isn’t at risk.)

Casino con­tri­bu­tions to host mu­nic­i­pal­i­ties were an in­te­gral part of the bar­gain to le­gal­ize casino gam­bling in Penn­syl­va­nia. The money has paid for in­creased public costs associated with casi­nos.

The Su­pe­rior Court stayed its rul­ing for 120 days to give law­mak­ers time to re­write the law and lessen the im­pact on host towns. The court said its rul­ing isn’t retroac­tive, so there’s no need to rene­go­ti­ate the last eight years of pay­ments to mu­nic­i­pal­i­ties.

The Leg­is­la­ture will be in ses­sion for two weeks in late Oc­to­ber. While it has some big items on the agenda — pen­sion re­form and the opi­oid cri­sis, no­tably — the casino fund­ing dilemma could be sewn up in a mat­ter of days.

Since the casi­nos have been pay­ing $10 mil­lion a year, that should be the start­ing point for dis­cus­sion.

Why this is­sue was even lit­i­gated is a fair ques­tion. All the state’s casi­nos out­side Philadel­phia have paid $10 mil­lion each year for the last eight years, be­cause they don’t make enough in slots to reach the 2 per­cent thresh­old.

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