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No easy fix for Pa.'s local slots tax

It was evident at a hearing in Harrisburg on Tuesday that the Pennsylvania General Assembly will be pulled in multiple directions as it tries to fix a local tax on casinos that the Pennsylvania Supreme Court declared unconstitutional last month.

Numerous lawmakers on the House Gaming Oversight Committee expressed interest at the hour-long hearing in not just making the tax constitutional - so counties and municipalities don't lose money and can meet budget deadlines -  but also in tweaking the formula used to distribute the $140 million a year from the slots tax that goes to municipalities and counties.

Rep. Russ Diamond (R., Lebanon), for example, said he understood the urgent need to resolve the problem created by the Supreme Court decision, which said the municipal portion of the state's local slots tax was unconstitutional because it treats casinos differently, depending on their size and their location.

But he views the distribution as unfair.

Hollywood Casino at Penn National Race Course, is in Grantville, Dauphin County, just across the line from Lebanon County. Dauphin County received $13.5 million from Hollywood Casino, the highest local share in the state, but Lebanon County received nothing.

"I think we ought to look at the distribution end," Diamond said.

Susan C. Helm, another Republican, whose district straddles Dauphin and Lebanon Counties, said that fire crews from a township in Lebanon County regularly respond to calls from Hollywood Casino.

Westmoreland County has three adjoining counties with casinos, but it gets no casino money, said Rep. George Dunbar, a Republican from the county near Pittsburgh. "Not everybody is going to be eager to jump on the green button" for a fix that doesn't address the distribution, Dunbar said.

Other county and township officials, by contrast, urged the panel to leave aside other changes to the 2004 Race Horse Development and Gaming Act to focus on a speedy fix to the local slots tax.

The Supreme Court gave the General Assembly until late January to fix the tax, but local officials are under tight budget time lines.

Delaware County officials are facing a Nov. 1 deadline to release a balanced budget to residents, testified Mario J. Civera Jr., chairman of the Delaware County Council.

The county receives $4.3 million a year from Harrah's Philadelphia in Chester. "To make up $4.3 million in a county of 550,000 people, we have a hard task ahead of us," Civera said.

That amounts to a 3 percent increase in the county's real estate tax, he said.

Mount Airy Casino Resort, which filed the lawsuit challenging the so-called local share assessment, accounts for 40 percent of the annual $2.2 million budget for its host Paradise Township, said Peter Gonze, vice chair of the township's board of supervisors, which is scheduled to start 2017 budget discussions on Wednesday.

Losing the $880,000 from Mount Airy's tax payment would have "dire consequences for our township," Gonze said. The money has been used over the years to restore the township's 35 miles of roads, as well as to fix bridges and culverts, he said.

"The casino has been a good neighbor, but it is not a neighbor without costs," he said.

Gaming Oversight Committee's chairman John D. Payne (R., Dauphin ) said that he favors a narrow fix of the tax, but that he also hopes it is done in a bill that will bring in revenue. In June, the House of Representatives passed a bill that would legalize internet gambling and makes other changes to the state's gambling law that could bring in licensing fees. That bill remains in the Senate.