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Published July 19, 2008 11:38 pm - Lawmakers approved the legalization of slot machines in Pennsylvania in July 2004, and along with the hopes of increasing tourism within the state’s boundaries came promises of $1 billion in annual revenues that would be used to fund programs to reduce property taxes and spur economic development.

Gambling, casinos relieve property taxes


By Penni Schaefer

07/20/08

Lawmakers approved the legalization of slot machines in Pennsylvania in July 2004, and along with the hopes of increasing tourism within the state’s boundaries came promises of $1 billion in annual revenues that would be used to fund programs to reduce property taxes and spur economic development.

Four years later, thanks to gamblers who have laid down their money in any of the six fully-operational casinos in the state, more than 18,000 homeowners throughout Crawford County will soon open up their property tax bills and witness a rare occurrence: lower taxes.

But the question is, is the “relief” that legislators promised to taxpayers living up to their expectations?

After looking at just how much savings the owners of statistically-average homes in Crawford County will actually experience — between $134 and $175 — some of the local legislators themselves have seen the bottom lines and are disappointed.

Republican state Rep. Brad Roae called the amount that the average homeowner will realize “woefully inadequate.”

“It’s not what was promised to the people of Pennsylvania when they pushed that piece of legislation through,” said Roae, whose Sixth District covers all of eastern and north-central Crawford County. “They made it sound like there would be piles of money in the fund to reduce property taxes.”

The homestead and farmstead rebate that Pennsylvania property owners will receive will vary greatly from one school district to another. For example, qualifying homeowners in Harrisburg City School District in Dauphin County will have about $475 knocked off their tax bill. However, homeowners in nearby Susquehanna Township School District, also in Dauphin County, will receive a $75 reduction.

The reason for the wildly varying figures is that the gaming revenues are being divvied up and delivered to school districts based on a complex formula that, according to the Pennsylvania Department of Education, was intended to disperse the funds on an “equitable basis” with the hopes of reducing taxes in communities that carried “the greatest burden and least local wealth.”

While it’s not the fiscal relief that many had hoped for, there is good news: only half of the 14 approved casinos throughout the state are currently open, and in addition to those seven, according to the Pennsylvania Gaming Control Board, two more casinos, Sands Bethworks in Bethlehem and the Majestic Star Casino in Pittsburgh, are expected to be fully operational by the end of 2009.

Theoretically, as more open, qualifying homestead/farmstead owners should expect to see rebates increase. But according to Republican state Rep. John Evans, just how much is still a mystery.

“There is no way to know for sure how much maximum tax relief would be available because of all the controversies surrounding the yet-to-build casinosd,” said Evans, whose Fifth District covers parts of western Crawford and Erie counties. “Realistically, it could take years for revenue from the casinos in Philadelphia and Pittsburgh to be realized — and we expect those casinos to generate the most revenue because they are in highly populated areas.”

To receive the “homestead” exemption, you must meet the criteria and submit an application. Criteria include being a property owner who is occupying the home as a primary dwelling. Owners of seasonal residences such as vacation or seasonal homes will not receive the rebates.

To qualify for the “farmstead” exemption, at least one of the named owners must occupy the residence on a permanent basis. There must also be a minimum of 10 adjoining acres which are primarily used for agriculture purposes.

While people who own homes and farms can anticipate their monthly housing expenses to decrease, those who rent — and typically belong to a lower socioeconomic class — will not benefit from gambling in Pennsylvania. In fact, they can expect to see their monthly expenses increase because in all three school districts — Crawford Central, PENNCREST and Conneaut — property taxes were increased for the 2008-09 academic year. Owners must then decide whether to raise the monthly rent or absorb the cost.

According to Republican state Rep. Michele Brooks, there are programs that can help some renters who qualify, such as senior citizens.



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