Taxpayers not high on the list of 'slots' beneficiaries
"It's all about you, the burdened payers of property taxes," has been the message from Gov. Ed Rendell and state lawmakers in Harrisburg after approving historic legislation that legalizes slot machines in Pennsylvania.
But when examining the primary beneficiaries of slot machines, taxpayers don't seem to be anywhere near the top of the list.
Consider the national gambling interests as well as the race track operators where slot machines will be installed. The operators of the new slots casinos will be sold licenses by the state for $50 million each, far less, says an independent analyst, than if the state had put the licenses up for competitive bidding. The slots licensing analysis looked at licenses sold in other states and suggested Pennsylvania could earn nearly double the $600 million to be raised by selling licenses without competitive bidding.
The casino operators and racetrack owners stand to make hundreds of millions from gamblers playing slot machines programmed to guarantee healthy profits. Yet lawmakers in Harrisburg appear to have left millions of dollars on the table by not getting competitive prices for the licenses.
The percentage of the gambling winnings that the casino operators in Pennsylvania will be allowed to keep is reported to be much higher than the percentage of winnings kept by casino operators in New York State.
Overall, lawmakers failed to reveal to the public the process though which it was decided the sizes of the slots pie that various interests groups would get.
An Associated Press story written prior to the final vote on slot machines might help answer some questions. ". . . Senators waited for a final draft copy to come out while dozens of lobbyists plied the hallways of the Capitol."
Were these lobbyists working for property tax payers or were they working for casino interests, race track owners or major municipalities around the state?
The legislation commonly referred to as the slots bill, was officially titled "Pennsylvania Race Horse Development and Gaming Act." And millions of dollars will go to horse organizations, jockeys and drivers. But there will be many other winners from thousands of slot machines across the state.
Counties and municipalities where slots are located will get a piece of the action. Volunteer fire departments also are slated to get money from slots.
Other big winners include the Pennsylvania Convention Center in Philadelphia where $600 million from slots will help fund expansion. The Pittsburgh International Airport is targeted to receive $150 million to reduce debt. Slots revenues might also help fund a new arena for the Pittsburgh Penquins as the sports franchise seeks to be a casino operator in the city of Pittsburgh.
An estimated $150 million in slots money will be used to fund borrowing up to $2 billion for various public projects across the state. Another group of beneficiaries includes wage-tax payers in Philadelphia who will get tax relief from the legislation legalizing as many as 61,000 slot machines - more than any other state except Nevada.
Finally, property tax reductions are expected to average about 20 percent, but only after school districts are forced to increase the local earned-income tax by 0.1 percent.
There will be some benefits for millions of property tax payers, but the big bucks go to a handful of other interests. The lobbyists who clearly had a hand in crafting the 146-page slots legislation made sure their interests were satisfied first. Taxpayers had no lobbyists working for them when the backroom deals were being made in Harrisburg - and it shows.
Gov. Rendell and lawmakers who approved the bill might boast to voters that the slots legislation is all about taxpayers, but they can't deny it turned into a sweetheart deal for a few powerful interest groups. And that seems to be par for the course in Harrisburg - or Washington, D.C. for that matter.
