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Butler County's great daily newspaper

Slots cash mixed bag for Pa.

Promised tax relief called 'a fraud'

DALLAS — In the summer of 2004, Gov. Ed Rendell and top state lawmakers promoted legalized casino gambling as a way to provide historic relief from burdensome school property taxes.

A decade later, slot-machine revenue has helped restrain the inexorable growth of a tax that homeowners love to hate, and completely eliminated it for thousands of low-income seniors.

But an Associated Press analysis of state Education Department data shows that, despite the meteoric rise of Pennsylvania’s gambling industry, casinos haven’t delivered enough revenue to put a significant dent in most homeowners’ tax bills.

If anything, homeowners are feeling even more of a pinch now, 10 years after gambling proponents predicted casinos would — in the words of one lawmaker — “remove the stifling saddle of high property taxes from the backs of Pennsylvania homeowners.”

That’s because, for all the money they generate, the casinos can’t come close to matching the amount that school districts collect in property taxes.

The numbers show that:

Homeowners got a slots-financed break of about 6 percent on their school property taxes between 2008-09 and 2012-13. Hundreds of thousands of low-income senior citizens got bigger discounts, while other homeowners received less.

On average, $187 was knocked off most homeowners’ tax bills.

At the same time, Pennsylvanians’ overall property tax burden increased by about 12 percent over five years. So that $187 break represents a smaller chunk of the tax bill as time goes on.

Low-income seniors have fared much better, with slots revenue pumping money into a separate property tax and rent rebate program that nearly doubled the number of eligible households to about 600,000. Their average rebate totaled $475 in 2012, and about 35,000 households paid no property tax at all.

Tax relief varies widely for each school district based on a formula that takes into account its wealth and tax burden. For 2014-15, the casino-financed discount ranges from a low of $52 to a high of $641.

In the Dallas School District north of Wilkes-Barre, where homeowners are getting a tax reduction of $52.66 this school year, resident Jill Kryston is underwhelmed.

“It’s nothing,” said Kryston, 60. “It’s a tank of gas.”

When the bill that gave rise to Pennsylvania’s casino industry passed with bipartisan support in July 2004, proponents said revenue from as many as 61,000 slot machines would enable the largest property tax cut in state history.

There’s no question the casino industry has done well financially. Pennsylvania is the second-largest casino market after Las Vegas in terms of gross revenue and No. 1 in taxes collected.

But while the levy on slot machines yields about $615 million per year for across-the-board property tax reductions and an additional $160 million for the rebate program benefiting low-income elderly, homeowners pay nearly $12 billion in property taxes to fund schools.

“They led everyone to believe that property taxes would actually be cut, and that was a disservice and a fraud because that was never going to happen,” said Tim Potts, co-founder of the citizen advocacy group Democracy Rising PA and a Carlisle Area School Board member.

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