...overpromise and underdeliver....

EDITORIAL: Casinos never lived up to their hype in Pa.

Posted: 10/11/14

 

In the workplace, some of the best advice an employee can get is to underpromise and overdeliver. Keep expectations realistic and then do your best to exceed them.

In politics, the mode of operation is often just the opposite: overpromise and underdeliver.

That seems to be what happened in Pennsylvania with the legalization of casino gambling in 2004.

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In the debate over legalization, Pennsylvanians were told that casino gambling would help cut the burden of ever-escalating property tax bills. And about a third of slot machine revenue does go to property tax relief.

But the Associated Press analysis found that gambling revenue has made only a slight dent — in some cases, almost unnoticeable — in most people’s property taxes.

Casino gaming netted $1.5 billion for the horse industry, while school districts across the state were slashing services and raising taxes.

Overall, the tax relief funded by slot machines amounts to just six percent of the $12 billion that homeowners pay for schools. In one district, the resulting tax break is just $52 a year.

Low-income seniors do get a significant break, because some $160 million a year of casino money is set aside to help them.

Overall, the AP said the average property tax break funded by casino gambling was $187. That’s barely more than a rounding error on most people’s property tax bills.

Casino gambling could deliver noticeably bigger tax relief if so much of the money didn’t go to subsidize Pennsylvania’s horse racing industry.

Part of the political deal that greased the way for casinos was to hand a slice of the action over to horse racing. The industry, which was then in severe decline, gets a guaranteed share of the casino pie — 12 percent, according to the Pennsylvania Gaming Control Board.

Last fall, the Philadelphia Inquirer reported that over six years, that subsidy for the state’s horse business totaled $1.5 billion.

They got that $1.5 billion at the same time school districts across the state were slashing services and raising taxes, thanks to the Great Recession and the loss of federal stimulus money, which helped fill gaps when the tough times led the state to cut education funding.

The national economic crisis has abated, but now catch-up contributions for underfunded pensions are eating big holes in school budgets. Lawmakers in Harrisburg use an ad hoc way of funding schools, leaving plenty of room for political influence, instead of a fair and predictable formula. No surprise, then, that education funding, past and future, is one of the biggest issues in this year’s governor’s race.

As Rep. Todd Stephens, R-Montgomery, has pointed out on the House GOP website, one way of easing the property tax burden is to stop subsidizing “The Sport of Kings” and use the money on schools.

Stephens writes that state subsidies have allowed horse tracks to offer huge prizes, whose winners “include Sheik Mohammed bin Rashid Al Maktoum, prime minister of the United Arab Emirates, Saudi Prince Faisal bin Khalid bin Abdulaziz, and countless, out-of-state, millionaire racehorse owners.

Regardless of the options chosen, one of the most important challenges facing state legislators is finding a fair way to get schools the money they need without crushing local property taxpayers.

The Philadelphia Inquirer reported last fall that the 2004 political deal that launched casino gaming was “a remarkable boon for an industry that had been languishing for years throughout the country.”

Unfortunately, casino gaming has not been the same kind of boon for Pennsylvania’s property taxpayers.

 

http://www.pottsmerc.com/opinion/20141011/editorial-casinos-never-lived-up-to-their-hype-in-pa