After the Pennsylvania Supreme Court ruled in favor of Mount Airy Casino, legislators in the state will be forced change taxes for casinos throughout the state, including something called the local share tax, which is a small amount of casino revenue that is distributed to the communities they operate in. Mount Airy Casino claims that the current laws in place to tax the Pennsylvania casinos is unconstitutional, and favors casinos that make more money. This is raising a number of questions from communities that rely on this income to maintain the casinos as well as the area around them.
The Current Taxes for PA Casinos
Like most states, Pennsylvania taxes its casinos and collects a percentage of income a casino earns each year. In this particular state, 54 cents is collected for every dollar a casino earns at a slot machine. Every time a bettor loses that dollar it is distributed to a number of things like property taxes, the state’s horse racing industry, a state economic development trust fund, and, last but not least, the local share tax.
Mount Airy Casino Resort challenged the law that has been in place since casinos first came to the state in 2006. Casinos are required to pay whichever amount is greater: $10 million or 2 percent of their slot machines revenue. No casino has ever reached the $10 million threshold, which in turn has caused a number of casinos to pay more, due to the fact they are making less money.
Over the past year casinos throughout the state have paid $2.4 – $7.8 million in order to meet the current state requirements. The issue is that the range being paid is significantly different, which has led to the deficit being paid and Mount Airy Casino’s decision to challenge the law in the state’s Supreme Court.
What the Local Share Tax Provides
The Mount Airy Casino’s revenue accounts for more than half of its township’s budget. Paradise Township representative Peter Gonze says that the casino has been a blessing for the financial struggles of the community. The casino employs just fewer than 1,100 workers and is the largest taxpayer in Monroe County. The casinos local share tax goes to maintaining the town’s infrastructure, fire and ambulance services, while also keeping tax rates low for the residents.
“We’re not saying for a second that there shouldn’t be a local share tax,” Said Michael Sklar, an attorney representing Mount Airy. Sklar went on to explain that the new law should be done in a responsible and constitutional way. A change like this would affect a number of communities, who have seen the benefits it has provided Paradise Township.
State Senator Scavello said that people won’t have to wait long to learn the proposed solution; saying that he expects a fix to be proposed as early as the end of May. However, there is still debate over what is the best solution. Some propose casinos should pay an increased 4 percent tax on slots and others suggest casinos should pay an annual slot machine license renewal fee of $10 million. Regardless, the legislature has until Memorial Day to finalize a decision that would fix the law.