Another Setback for Pennsylvania Slot Machine Plan

June 3, 2005

According to a recent New York Times article, Pennsylvanians may have to wait a bit longer for their long-anticipated property tax relief. Governor Edward G. Rendell’s controversial plan to use slot machine revenue to lower local property taxes met a major roadblock earlier this week when only one-fifth of the state’s 500 school boards voted to participate.

The complicated plan calls for the installation of 61,000 slot machines, subject to a 34-percent tax, at racetracks and casinos. This tax revenue would allow school districts to lower local property taxes.

There is a catch, however: the plan requires participating districts to increase local income taxes by one-tenth of one percent and prohibits (with some exceptions) school districts from raising taxes above an inflation-related index without first holding a referendum.

According to Michael Griffith, an analyst from the Education Commission of the States, “Pennsylvania is the only state where school boards are virtually unfettered in their abilities to increase property taxes.” Local officials are obviously reluctant to give up this power, although concerns about using gambling revenue to fill government coffers probably also played a role in the plan’s defeat.


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