Boscola Wants Table Game Revenues Moved to Property Tax Relief Fund

By Yasmin Tadjdeh | PA Independent

With tax revenue on the rise, state Senate Democrats and Republicans disagree on whether to keep funneling millions in table game revenue to the state budget or give it back to taxpayers to relieve property taxes. 

Table game tax revenue generated $71 million this year, but the state collected about $785 million more in other taxes than anticipated last year, prompting state Sen. Lisa Boscola, D-Northampton, to propose returning the gaming money to taxpayers. 

“With this kind of excess cash, there is no reason why the state’s general fund needs more help from table games. These revenues should be used for additional tax relief,” said Boscola in a statement. 

Boscola’s proposal, SB 160, would move table game tax revenue from the general fund to the property tax relief fund permanently. Table games include poker, black jack, craps and roulette. Currently, only tax revenue generated from slot machines goes to the property tax relief fund. 

Senate Republicans said they would not favor any legislation addressing gambling revenue this fall. 

Under current law, table game revenue is allocated to the general fund until the state’s rainy day fund exceeds $750 million, at which point revenue would be diverted to the property tax relief fund along with the slot machine revenue. 

The rainy day fund is empty, having been drained during the budget crisis two years ago. When the fund has money, however, it requires a two-thirds vote from the state House and Senate to be utilized. 

However, the fund can be abolished with a simple majority vote, which automatically directs the revenue back to the general fund. There are no rules requiring the rainy day fund to be replenished. 

Slot machines were legalized in Pennsylvania in 2006, and revenue from their operation goes into the state’s property tax relief fund to be distributed back to taxpayers statewide. Last year, the average distribution was about $200 per household.

But when table games were added to the state’s casinos in 2010, the revenue was directed to the state budget, instead of the property tax relief fund. At the time, Gov. Ed Rendell argued the table game revenue was needed to balance the budget for fiscal 2009-10. 

Last year, the state anticipated a revenue surplus of about $70 million, but ended up collecting $785 million in excess tax revenue. The extra funds were not placed in the rainy day fund, but put into a budgetary reserve fund, which allows legislators to tap into it whenever needed so long as they have a majority vote. 

Republicans argue the $785 million in excess revenue is not a true surplus, because the state has between $13 billion and $100 billion in pension liabilities, owes $3 billion to the federal government for unemployment compensation loans and may have to repay $800 million raided from a special fund during the budget process three years ago. 

State Senate Democrats support Boscola’s bill, including Senate Minority Leader Jay Costa, D-Allegheny. 

Costa "definitely supports any effort to put more money back into the people’s pockets,” said Lisa Scullin, spokeswoman for Costa, who noted that many other caucus members had co-sponsored the bill. 

But Senate Republicans do not support Boscola’s proposal. 

“There are no plans to consider legislation this fall, which would impact general fund revenues,” said Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi, R-Chester. 

Even if SB 160 was to pass, it does not provide taxpayers with real relief and is only a temporary fix, said David Baldinger, president of the Pennsylvania Taxpayers Cyber Coalition, an alliance of 60 grassroots Pennsylvania taxpayer advocacy groups. 

The bill "is nothing more than a bandage on a hemorrhage,” said Baldinger. 

What is needed is not property tax relief, but rather property tax elimination, said Baldinger. 

Eliminating this tax would give residents “true home ownership,” attract businesses to the area, create jobs and give the state a large stimulus among other benefits, according to the coalition’s website. 

But introducing a bill about gaming opens up a bigger can of worms than just property tax reform, said state Rep. Mike Vereb, R-Chester. 

“Anything we do with gaming unfortunately brings up the conversation of (gaming) reform,” Vereb said. 

Vereb, who is a proponent of reforming gaming laws, has pushed for the removal of the Bureau of Investigations and Enforcement, or BIE, from the Gaming Control Board, or GCB, which regulates the gaming industry. A proposal to make this investigation and enforcement arm of GCB a part of the attorney general’s office passed the state House and is waiting in the state Senate. 

Steve Miskin, spokesman for House Majority Leader Mike Turzai, R-Allegheny, said House Republicans would take a look at SB 106, if it passes the state Senate; but for now, it is not being reviewed heavily. 

Bill Patton, spokesman for House Minority Leader Frank Dermody, D-Allegheny, said House Democrats are “always looking for more ways to increase property tax relief,” but the bill would need to “gain some traction in the Senate” before it becomes a significant issue.

GCB declined to comment.