Legislators, Gaming Control Board, still assessing proposals
By Darwyyn Deyo | PA Independent
HARRISBURG – Despite a June 30 deadline for casinos to pay back nearly $64 million in loans from the property tax relief reserve fund, a repayment plan has yet to see action.
When the loans were made, repayment was supposed to begin by June 30, under the condition that 11 casinos were operational. But only 10 casinos are operational, with the 11th embroiled in controversy and no clear timeline indicating when it will open.
The loans helped finance the operations of the state Gaming Control Board, or GCB, during the early years of legalized gambling in Pennsylvania, when few slot machine facilities were open.
The reserve fund is used to supplement the state's property tax relief fund in the event the property tax relief fund cannot make the same level of property tax relief payments as the previous year. The fund was created in the 2006 act that legalized gambling in Pennsylvania. Under the act, 55 percent of revenue from slot machine gaming goes into the relief fund.
Property tax relief averages $300 per family annually.
On Thursday, state Treasurer Robert McCord released his proposal on how the casinos can begin repaying their combined $63.9 million debt to the state property tax relief reserve fund, one of many proposals received by the state GCB, which regulates the gaming industry.
In his proposal, McCord suggests moving the repayment deadline to July 1, instead of waiting for the 11th casino to open.
“To wait for the 11th licensee to begin slot operations means it would be another year — possibly two years — before casinos would begin repaying the loan,” said McCord in a statement. “That’s two years of missed investment opportunities during which we could be generating returns that would help reduce property taxes.”
McCord’s proposal would require the casinos to make annual payments during a 10-year period. He is a non-voting member of the GCB.
Richard McGarvey, spokesman for the GCB, said the board is “going to be taking into account all the proposals, (but) no decision has been made as to what method should be used at this point for repayment. That would have to take place at a public meeting with a vote."
The GCB has meetings on June 8 and June 28, but discussion of the proposals is not on the agenda for either meeting.
Property tax relief itself would not be adversely affected if the casinos wait to repay the $63.9 million loan, McGarvey said.
“If, for some reason, the budget secretary thinks there’s not going to be enough in the reserve to backfill, the budget secretary would let the (GCB) know," said McGarvey, "so the (GCB) can go to the casinos and say, ‘We need to pay back the loans immediately.’”
William Thomas, legislative assistant to state Rep. Rosita Youngblood, D-Philadelphia, minority chairwoman of the House Gaming Oversight Committee, said they would work with the Republicans on the proposals.
“It’s definitely something that warrants a conversation, but as you know the Republicans are the ones who set the agenda and if it’s something (state) Representative (Curt) Schroder feels we need to bring up, we’ll definitely have those conversations with him,” Thomas said.
Schroder, R-Chester, chairman of the state House Gaming Oversight Committee, did not return calls for comment on McCord’s proposal.
