When the debate over allowing slot machines was in full force in 2004, proponents of the bill promised $1 billion of that revenue per year would go toward property tax relief.
Ten years later, York County residents are seeing their tax relief from slots revenue quickly swallowed by increasing property taxes. And that relief, already lower than promised, isn't likely to increase in the foreseeable future, state officials said.
For taxpayers like Jane Johnson in the Central York School District, the $112 she and her husband will receive off their tax bill this year is a help — but not much.
"I'm happy to receive it," she said. "I don't think it's a major break."
In April, Gov. Tom Corbett's office certified $779 million in revenue from slots for tax relief, an increase of just $1 million from last year. That money is dispersed among taxpayers in the 500 school districts in Pennsylvania, based on factors that include a district's poverty level.
State and local officials point to several reasons why the relief hasn't grown as much as expected. Some say expectations might have been too high from the start. But despite those setbacks, former Gov. Ed Rendell is still a staunch defender of the bill, and said the revenue is going exactly where it was targeted in the first place.
How the relief works: In most York County school districts, tax relief for homeowners increased between $1 and $3 this year, for a total that ranges from $82 in West Shore to $519 in York City. After the city, the next highest amount of relief is $204 in the Northeastern School District. The average relief for the 16 York County school districts is $173.50.
When Act 1 passed in 2006 to allow casinos in the commonwealth, it was set up so gross revenue would be taxed at 54 percent, said Doug Harbach, spokesman for the state Gaming Control Board. That includes a 34 percent share that goes toward funding the property tax relief for homeowners. The remaining 20 percent is funneled to the horse racing industry, the statewide economic development fund and to the local governments of each host county for casinos, Harbach said.
The $779 million for tax relief this year is actually lower than in 2008, the first year money from slots went toward tax relief for all homeowners. That year, $787.2 million was available for the tax relief programs, but it dipped to $749.9 million in 2009. Aside from a slight bump in 2012 to $782.5 million, money available for tax relief has been stagnant, with revenues not growing more than $1 million each year.
This year's numbers might have been held down because of the harsh winter weather that kept many people inside instead of venturing out to the casinos, said Jay Pagni, a spokesman for Corbett's office. But there are other factors at play.
For instance, there's increased competition. Casinos in Maryland didn't begin until 2010; the first casinos didn't open in Ohio until 2012.
A report conducted by Econsult Solutions for the state Legislative Budget and Finance Committee, released in May, shows revenue in 2013 from the Presque Isle casino in Northwest Pennsylvania dropped 15 percent, perhaps because of a recent opening of a casino in Cleveland. According to the report, Maryland moved from one to four casinos from 2010 until 2014. Ohio increased sites from four to eight casinos between 2012 and 2014.
Future casinos: Meanwhile, two new casinos that would funnel more money into Pennsylvania's tax relief pot are years away from opening, Harbach said.
Pennsylvania has 12 active casinos, with the possibility for a total of 14 under the law. The remaining two locations could be in Philadelphia and in Lawrence County in western Pennsylvania. Both have started the application process, Harbach said. But building a new casino takes a huge amount of time, he added.
"It's still a number of years down the road," he said. "We're pretty much parked at 12 casinos for the time being."
And though the money has been called "relief," Harbach said it was always meant to be a reduction.
Even though the relief numbers have fallen short of the $1 billion estimation, it would take at least $13 billion in state revenue to completely cover residents' property tax bills, he said.
"There was this idea that property tax relief meant relieved of property tax bills," Harbach said. "That was never going to happen."
Increased taxes: The struggle, he said, is that the reductions in the tax bills have been quickly overcome by increases in property tax bills from local school districts, making the impact seem even smaller.
Though many people say the relief isn't what they'd hoped for, Rendell said the bill has worked for many senior citizens on fixed incomes in the state — the group of people he sought to assist the most in the first place.
With a combination of the tax relief from slots revenue and the abatement program for seniors funded largely by lottery revenues, more than 110,000 seniors saw their property taxes eliminated by the time Rendell left office at the beginning of 2011, he said. Another 200,000 seniors saw their property tax bills reduced by more than 50 percent, he said.
"To that end, the bill has succeeded enormously," he said.
Rendell acknowledged that the average relief for homeowners — about $200 statewide this year — isn't a great deal of money. But if taxes had risen by that much, "we would have heard screaming and yelling to beat the band," he said.
A different view: And for some York County residents, including York Suburban school board member Joel Sears, low expectations at the beginning mean slightly more content taxpayers now.
"My expectations were zero, so 120 bucks is a bonanza," Sears said.
But for some people with mortgage payments on top of tax bills and other expenses, the steady increase of taxes without relief is an unsolved problem. "There's lot of people who aren't senior citizens who live on a fixed income," Johnson said. "It's the same paycheck every week."
Johnson appreciates the reduction to her tax bill every year, but she'd rather have less of a hike in school taxes — which just compound upon each other every year.
"I would rather not pay the $130 (tax increase) than have someone give me a gift of $130," Johnson said.
New revenue: Rep. Kevin Schreiber, D-York, said the relief act was successful in bringing a new revenue source to the state. But property taxes are "unquestionably" one of the largest issues in his district, and the relief hasn't been enough for many taxpayers.
"No one's going to turn it (the relief) down," Schreiber said. "But in the grand scheme of property tax bills, it doesn't have the sigh of relief people are looking for."
He and state Rep. Seth Grove, R-Dover Township, agree with the assessment that homeowners are unlikely to see a significant jump in savings through the tax relief act. If anything, Grove says, the numbers could go in reverse.
With no new revenue set aside for the relief and more people signing up for it, the amount each taxpayer sees could decrease depending on the year, he said.
"That (same) pot is being drawn from," he said.
— Reach Nikelle Snader at firstname.lastname@example.org.
Tomorrow: A look at the effectiveness of the tax caps put in place the same time as the slots relief, and read about suggestions local lawmakers have for offering additional relief.