This is the final article of a three-part series.
SUNBURY — The intended benefits of state-licensed casinos have not worked out exactly as many politicians and taxpayers planned.
Casinos are driving gambling at private social clubs into the ground, and tax increases have consumed the cushion provided by gambling-funded property tax relief to Valley homeowners.
The result?
Even with casino revenues at record levels, property taxes are higher than ever.
In 2009-2010, $74.2 billion was wagered in state casinos — with $67.6 billion in payouts — producing $2 billion in state taxes; A year earlier, $44.8 billion was wagered. A total of $40.9 billion was paid out to winners, and $1.2 billion in tax revenue was produced.
And yet, the effect of the increase has been minimal for Valley property owners. And this has some taxpayers wondering: Where is the disconnect?
Susan Hooper, communications director of the Office of the Budget, in Harrisburg, said Act 1 of 2006 was enacted to ease the financial burden of home ownership by “providing school districts the means to lower property taxes to homeowners, especially senior citizens, via the funding provided by gaming revenue.”
Bill and Joan Martin, of Pillow — both not senior citizens — hoped their taxes might be lower this year because of the promised casino-funded tax relief.
“We were looking to get a break, with a rebate,” said Bill Martin, “but nothing much has changed. We’re grateful for the relief, but taxes are still going up.”
The Martins are not alone in their disappointment.
In all but two local school districts, the rebate funded by state-sponsored gambling is less now than it was two years ago.
And, in the two districts in which the rebate increased, it was because property owners who originally filed for tax relief did not file. Over the last three years, property taxes have gone up 10 mills in the Shikellamy School District , an increase that amounts to about $180 to the average taxpayer. District homeowners are eligible for $174 in property relief from casino revenue.
Ahead?
So, property owners come out ahead, right?
Hardly. The rebate has decreased by $5 since 2008. So, 10 mills ago, Shikellamy property owners received $179 in tax relief when the average tax bill was $1,125, meaning the average homeowner was paying $946.
Now, the average Shikellamy district homeowner’s tax bill is $1,305. With a $174 tax rebate, the end result is $1,131.
The news is similar for Line Mountain property owners:
Over the last three years, property taxes have gone up 9.15 mills in Line Mountain, an increase of $119 for the average taxpayer.
In 2010-2011, Line Mountain district homeowners are eligible for $131 in property relief from casino revenue.
The rebate to Line Mountain property homeowners has decreased by $17 since 2008.
Bottom line: 9.15 mills ago, Line Mountain property owners received $148 in tax relief when the average tax bill was $758. The average homeowner paid $610.
Now, the average homeowner’s tax bill is $832. And with a $131 tax rebate, the final bill is $701.
So, despite promises of tax relief provided by casinos, taxes are more than they were before the state legalized casinos.
Distribution
“Where is the money going?” Martin asked.
Forty-five percent of casinos’ total gross terminal revenue benefits casino operators; 12 percent, the state’s horse-track industry; 5 percent, the state’s Gaming Economic Development and Tourism fund; and 4 percent, local governments where gaming facilities are located.
The remaining 34 percent is for property tax relief.
That money is divided among the state’s 500 school districts, based on a formula, said Elizabeth Brassell, press secretary for Pennsylvania Gaming Commission. “The formula is based on a district’s population and resources,” she said.
“If it were not for the property tax relief the commonwealth is providing, the property owners in these districts would be paying even higher taxes,” Hooper added.
The estimated amount of tax relief per household from gaming revenue this year ranges from about $45 to more than $600, based on the relative wealth of the school district. Relative wealth is determined by the district’s taxes and income base.
But the bottom line for many homeowners is that 2010-2011 property tax increases have already swallowed the rebate.
Meanwhile, older Pennsylvanians in particular benefit from the commonwealth’s use of gaming revenue to provide property tax relief.
Nearly 600,000 senior citizens will be eligible this year for additional relief through the state’s Property Tax/Rent Rebate Program. Approximately 123,000 older adults will not pay school property taxes again this year because of the state-funded property tax relief.
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