PHILADELPHIA (CBS) — The advent of casino gambling in Pennsylvania was supposed to help homeowners in the form of lower property tax bills. Years later, however, some homeowners say they’ve seen little tax reduction as the casino revenue is actually going elsewhere — specifically, horse racing.
Pennsylvania lawmakers legalized casinos more than a decade ago, making a few promises along the way. First, legislators said slot machines would generate so much in tax revenue, people would see an average savings of $300 a year off their property tax bill.
But that promise has fallen short. This year, the average savings is just $182, according to the state Education Department.
It was even less for property owners in the Great Valley School District in Chester County: $126. In East Penn, Lehigh County, the average savings was $177.
In Cheltenham, Montgomery County, where Larry Angert lives, his property tax savings amounted to $55.
“It’s a joke! It’s a typical politician’s promise and it’s a joke,” he said.
But there was another promise Pennsylvania lawmakers made. They said taxes from casinos would help prop up horse racing. That was a promise kept.
CBS3 discovered $174 million in tax dollars, generated by the state’s slot machines, went to horse races. That cash is used to fund nearly all of the races’ prize money, called purses.
“The purses here are very attractive,” said Paul Trapani of Maryland.
Trapani won $35,000 at a recent race at Parx with his horse, Lord of Misrule. He says most of that will be spent out of state — either in Wilmington, Delaware, where the horse is trained, or Maryland, where he lives.
A 2017 state audit shows almost half of all horse race winnings in Pennsylvania — some $73.6 million — flowed to non-residents.
While out of state horse owners are attracted to Pennsylvania’s tracks, the tax money has not been not enough to attract big crowds.
A benchmark report shows a drop in horse racing attendance statewide for the last three years.
“I’m just frustrated with the lack of results,” said Republican state Rep. Todd Stephens of Montgomery County.
Stephens would rather reform the program or use the $174 million that went to purses last year to help plug the state’s deficit. He calls the money that goes to horse racing a hand out.
“There’s no question, this is corporate welfare,” he said.
“It employs 20,000 people,” countered Pete Peterson of the Pennsylvania Equine Coalition. “It helps reserve 100,000 acres of open space, so it’s a very good return on investment in my opinion.”
Peterson also believes the horse racing industry may soon be on the rebound, but he says it takes time.
“We have seen a very significant impact,” Peterson said. “We’re proud of the jobs it’s created throughout the Commonwealth.”