Auction Slots Licenses

The Commonwealth Foundation called for auctioning off the slots licenses in 2003 and 2004, but the gambling proponents decided to “sell” them at a 90% discount rate.

Rep. Kerry Benninghoff is not letting this go, and has proposed auctioning slots licenses to pay for property tax relief.

Here’s his news release…

Benninghoff proposes auctioning slots licenses to pay for property tax relief
Says proposal would provide $2.8 billion for immediate relief

Rep. Kerry Benninghoff (R-Centre/Mifflin) today proposed in a letter to Rep. Lynn Herman (R-Centre), chairman of the joint Senate-House conference committee addressing property tax relief, that Pennsylvania should auction off the state’s 14 gambling licenses for no less than $200 million each, providing $2.8 billion for property tax reductions statewide.

“This is a simple, sensible solution rather than taking money from the lottery fund,” Benninghoff said in the letter, referring to the plan supported by Senate Democrats and Republicans, House Democrats and Gov. Ed Rendell that would take money from the lottery fund to finance property tax relief. “Quarterly payments and a $200 to $300 rebate is an insult to the citizens and will be negated by any increase in the next school year’s budget.”

Benninghoff’s proposal is the latest legislative attempt to provide meaningful property tax relief after Act 72, the governor’s failed attempt to pay for property tax relief with gaming revenues, was rejected by 80 percent of school boards state wide. Act 72 allowed school boards to opt out of the property tax relief program through a majority vote.

“The people of Pennsylvania have waited 30 years for meaningful property tax relief,” Benninghoff said. “I doubt that most voters waited 30 years for a plan that robs the Lottery Fund to pay for meager property tax reductions for some homeowners but not others. The people want the full meal. The current proposal offers table scraps.”

The conference committee is currently considering a plan that would take $200 million from the state Lottery Fund and use it for property tax relief. The fund would then be repaid using the projected $1 billion in slots revenue, if and when that money materializes.

“Are they really willing to gamble with the Lottery Fund?” Benninghoff asked of the proponents of the plan. “Act 72 failed, but that’s no reason to loot the state’s other funds and jeopardize programs for seniors. This is a big problem and requires a big solution. Those who are seeking a politically painless solution for this problem are doing their constituents a disservice.”

The $200 million from the Lottery Fund would be used to increase annual income limits for senior citizens to qualify for property tax and rent rebates. The current limit of $15,000 would be raised to either $25,000 or $30,000. The maximum rebate, currently $500, would increase to up to $650.

Benninghoff noted that many school districts across Pennsylvania have already begun to draft their FY 2006-07 budgets. The plan currently under consideration in the conference committee could hamper school districts by throwing off preliminary budget calculations, according to Benninghoff. His plan, on the other hand, would not hamper school districts’ budget processes because the money would come solely from the auction of slots licenses.

“Senior citizens would see some relief under their plan,” Benninghoff said. “But working families would be left with little to no meaningful relief. With the revenues my proposal would produce, we could afford to provide real property tax relief for all Pennsylvania property owners. Harrisburg shouldn’t be picking winners and losers in the property tax lottery, and under my bill we wouldn’t.”

A copy of the letter sent by Rep. Kerry Benninghoff (R-Centre/Mifflin) to Rep. Lynn Herman (R-Centre) can be found on the next page.

April 26, 2006

Representative Lynn B. Herman
ChairmanConference Committee on Property Tax
45 East Wing

Dear Chairman Herman:

It appears that one of the largest stumbling blocks in the property tax relief debate is funding – specifically new funding sources versus shifting from one tax to another.

I believe any bill that comes out of your committee should provide immediate and significant relief. Quarterly payments and a $200 – $300 rebate is an insult to the citizens and will be negated by any increases in the next school year’s budget.

I am writing to request that you formally propose to the Conference Committee that the commonwealth either auction off the 14 gambling licenses or sell them for not less than $200 million each. This will provide $2.8 billion of new, real money to provide acute relief to all school property tax payers upon the sale of the gaming licenses. These could be renewed every five to ten years for a continual funding stream to offset escalating property taxes. This is a simple, sensible solution rather than taking money from the lottery fund.

I close by asking your Committee’s sincere consideration to this simple, viable solution. If you have any questions, please feel free to contact me.

Kerry A. Benninghoff
State Representative
171st Legislative District

cc: Honorable Samuel H. Smith