2010-04-22 / Local & State

Slots To Raise $773M For Pa. Proper ty-Tax Cuts

By Peter Jackson ASSOCIATED PRESS WRITER

HARRISBURG, Pa. (AP) – Homeowners counting on relief from school property taxes got some good news from Gov. Ed Rendell on Thursday.

Rendell announced that slot-machine gambling is expected to generate $773 million in property-tax cuts this year, with an average reduction of nearly $200 per household – about the same as last year – for eligible households

To qualify, homeowners must have signed up through their counties for the state’s “homestead exclusion’’ program. The appropriate reductions will be subtracted from the tax bills that school districts will mail out this summer.

Last year, nearly 2.7 million households in 66 counties paid lower property taxes because of the program. In Philadelphia, the slots money is used to reduce the local wage taxes instead of the property tax. Those will make up roughly $595 million of the cuts Rendell outlined Thursday.

Additional tax relief, financed with most of the remaining $178 million in gambling revenue, is available through the state’s Property Tax/Rent Rebate Program for homeowners and renters who meet certain criteria. Participants must be 65 or older, widows or widowers 50 and older, or permanently disabled people 18 and older.

This is the third year of the slots-financed tax cuts.

To satisfy a legal requirement that the state provide at least the same amount in tax cuts as the prior year, officials said they had to transfer part of the money – about $70 million – from a slots reserve fund, but insisted that the unprecedented move does not reflect deep-rooted problems in the gambling industry.

Rendell downplayed the fact that the slots casinos have, so far, failed to fulfill predictions of $1 billion a year for property-tax relief.

Budget Secretary Mary Soderberg blamed delays in a pair of planned casinos in Philadelphia and an increase in nontaxable free plays that casinos use for promotional purposes.

“Gaming has far exceeded its expectations in giving property tax relief, job creation’’ and other benefits, the Democratic governor said. “I shudder to think where we would be in this economy without it.’’

Nine casinos are currently operating and one of the Philadelphia casinos is slated to open in September, according to the Pennsylvania Gaming Control Board.

Rendell said he was encouraged by the fact that more of this year’s slots revenue came from gambling, not the casino license fees that bolstered last year’s total.

Steve Miskin, a spokesman for the Republican minority in the state House of Representatives, said the transfer leaves the reserve account with less than the $150 million minimum required by law. He said it may be a sign of more serious problems – especially at a time the state faces a projected massive spike in public pension funds and other potential big-ticket liabilities.

“What’s going to happen if the gaming money comes in $150 million short’’ next year, he asked.

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