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Mount Airy Casino proposes local slots tax fix

    by Harold Brubaker, STAFF WRITER | Columnist
    Published 

A lawyer for Mount Airy Casino Resort, which last month won a Pennsylvania Supreme Court decision declaring a local slots tax unconstitutional, does not like what he has been hearing out of Harrisburg.

"What we're hearing is they're coalescing around the idea of doing a flat dollar amount," as a replacement for the current levy of 2 percent, or $10 million, whichever is greater, Michael D. Sklar, a lawyer for Mount Airy, said Monday.

Mount Airy argued that the $10 million minimum effectively saddled smaller casinos with a proportionally higher tax rate, violating a clause in the state constitution that requires that taxes be applied uniformly to the class of taxpayers. The Supreme Court agreed.

The notion of instituting a flat dollar amount of $10 million, $12 million, or even $15 million per casino will not fly, said Sklar, of Levine, Staller, Sklar, Chan, Brown & Donnelly P.A., in Atlantic City.

"We'll be right back in court. We're prepared to file the litigation again. It's going to be declared unconstitutional, we're convinced," he said.

Nothing has been settled in Harrisburg. "There are many ongoing discussions, and the work continues," said Jennifer Kocher,  spokeswoman for Senate Majority Leader Jake Corman (R., Centre).

Mount Airy has proposed a flat rate of 4 percent for the municipal portion of the so-called local share assessment. Based on slots revenue for the year ended June 30, a 4 percent flat rate would raise $95.55 million. The current tax regime raised $96.27 million in aggregate during that period. 

"It will pass constitutional muster, and there will be certainty. Otherwise we're going to be right back in court," Sklar said.
The 4 percent rate would apply to all casinos, reducing the effective rate for smaller casinos, such as Mount Airy and Presque Isle Downs in Erie, but it would mean an increase in the effective rate for the state's largest casinos, such as Parx Casino in Bensalem and Sands Casino Resort Bethlehem.
Mount Airy had $143.59 million in slots revenue in fiscal 2016, which meant the $10 million minimum local share represented a 7 percent tax rate. Under a 4 percent rate, Mount Airy would pay $5.75 million. For Parx, which had $388.34 million in slots revenue, the $10 million minimum amounted to a 2.6 percent tax rate. Parx would pay $15.5 million if the tax rate were 4 percent.
It would be up to the General Assembly, which after this week is not in session again until January, to decide how to distribute the money, Sklar said. It could maintain the current distribution scheme, which sent money to 157 local governments last year.
Legislative leaders are facing a challenge from members whose districts don't get any of the local share assessment and want it to be spread further and wider.
"There is no easy solution," said Mario J. Civera Jr., chairman of the Delaware County Council, which is facing a Nov. 1 deadline to present a balanced budget to county residents and could have replace the $4.3 million it receives from Harrah's Philadelphia in Chester.
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    Harold Brubaker, STAFF WRITER