The 2004 Pennsylvania Race Horse Development and Gaming Act paved the way for this payback incentive when the state Legislature gave the go ahead for gambling in the commonwealth.
It requires a portion of the gambling revenue collected by the commonwealth to be disbursed each year for property tax reduction. The state has allocated $613 million for property tax relief from the slots this year.
Each school district determines its own tax relief, based on the combination of the gambling revenue and its state fund allocation. The amount of gambling revenue allocated to a district is based on the number of homeowners who filed for the property tax reduction, allowable through the Taxpayer Relief Act of 2006 which uses homestead and farmstead exclusions for property tax reductions.
It has been determined that, on average, a homeowner in Pennsylvania is expected to see their school taxes reduced by $190 next year. Within our region, though, only one district - Mt. Lebanon - comes close to that average, with an estimated $194 in property tax relief.
The swing of the tax relief pendulum in our region spans from a mere $99 in Canon-McMillan to a high of $245 in Upper St. Clair.
While the allure of lower taxes is certainly appealing, we question why the numbers are not higher.
The first of the approved gambling facilities - Mohegan Sun in the Poconos of Luzerne County - opened in November 2006. In just its first week of operation, with just shy of 1,100 slot machines, this facility recorded more than $95,000 in gross terminal revenue. State tax revenue for that one week was more than $95,000.
Today, Pennsylvania has seven gambling facilities with more than 15,000 slot machines. According to the revenue report from the Pennsylvania Gaming Control Board, gross terminal revenue for the week of April 21-27 was nearly $30.5 million, of which more than $10.3 million was handed over for the 34 percent state tax.
With $1.1 billion recorded to date in gross terminal revenue for the fiscal year (July-June), that same state tax has brought in nearly $377 million. That number does not include the tax for local share assessment nor does it include two additional taxes - one for funding economic development and the other for race horse development.
Gov. Ed Rendell has said when all 14 of the casinos are operating and bringing in $1 billion annually for tax relief, homeowners could see an average $300 in property tax relief. Although we agree that every little bit helps, given the millions of dollars the state is already receiving weekly from the casinos, what homeowners are being promised really doesn't seem like all that much.