As the Pennsylvania Legislature debates budget issues, possible revenue sources continue to be topics of conversation. Too much uncertainty exists with federal funding. The federal government is even starting to eliminate existing contracts with municipalities, contracts that promised money to our municipalities for necessary projects such as infrastructure repair. So much of our state budgets depend on federal monies, and the current state of uncertainty is hindering states from composing viable budgets.
Despite this uncertainty, the Pennsylvania Legislature is working toward having a budget in place by the June 30 deadline.
Knowing that taxpayers are already suffering from high costs and financial losses, legislators will look to new sources of revenue. In Pennsylvania, those new potential sources would include taxes on skilled games and the legalization of adult-use cannabis.
While I am in favor of one and against the other, I always step cautiously when being told how many millions of dollars new endeavors can generate.
I stand behind taxing skill games, but not for the obvious reason of generating tax revenue. I truly believe these types of games should be the subject of oversight, in the same manner the state oversees slot machines. These skill game machines are found in many locations now. With no oversight, their misuse is a true concern. And as with other sources of gambling, they should be taxed.
Adult-use cannabis – or legalized marijuana – is another issue. Proponents of this claim the projected tax revenue would be significant. But there is a lot of skepticism over the numbers, and the societal problems of legalization are a great concern among many Pennsylvanians.
Quite frankly, it is my belief that this would not be the revenue source that saves us.
Take legalized gambling, for example. The revenue to be generated was touted as a fix for so many of our funding problems. The tax revenue from gaming has been a big help on our property taxes and state funded programs, but not a complete fix. Gaming is well-regulated, and the revenue generated is utilized well. But the revenue generated can only go so far.
The formula for the use of the gaming taxes is a bit complicated and depends on the classification of each casino. Percentages of the revenues go to help reduce property taxes.
Monies are divided by percentage to property tax relief, local shares to host counties and municipalities, the Race Horse Development Trust Fund, the Economic Development and Tourism Fund and the Commonwealth Finance Agency for particular grants to some counties.
Monies also go to the state general fund. In our District, for example, I have been involved in securing many grants for municipal projects through the local share account monies.
These monies come from the taxes on the slot machines, table games, video gaming terminals, iGaming, sports wagering and fantasy sports contests.
While there is an amount each property owner gets in tax relief, the amount and the way it works is mostly confusing to the taxpayer. To clarify all this, reduce some confusion and show taxpayers what their particular relief actually is, the State House has recently passed House Bill 325. House Bill 325 would include language to be added to tax bills that would state that your tax bill includes a reduction – and then list the specific amount – in the taxes for your property. Casino gaming revenue is used to reduce your taxes, separate from any action taken by your school district. The bill will now move on to the State Senate.
I anticipate a very difficult time as we attempt to approve a budget. The federal government has shown that it may not even be fully cognizant of what its intentions may be, with regard to monies passing to the states.
As always, please feel free to reach out to my staff and me at 412-264-4260 for information on state-related issues. I hope you and yours have a happy and blessed Easter.
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