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HARRISBURG — Pennsylvania’s highest court on Wednesday struck down a requirement that has forced casinos to pay tens of millions of dollars to their host communities for a decade, potentially dealing a crippling blow to local budgets around the state if lawmakers do not act quickly.
The Pennsylvania Supreme Court ruled that the roughly 4 percent “local share assessment” is unconstitutional because it is not uniform and affects Pennsylvania’s 12 casinos differently.
The justices said they would delay the effect of their decision striking down the tax for four months to give lawmakers an opportunity to fix it.
“We are mindful that our decision may significantly affect many counties and municipalities that have ordered their affairs in reliance upon” the casino tax revenue, Justice David Wecht wrote in the 18-page opinion.
Sen. John Yudichak, D-Plymouth Township, acknowledged that lawmakers were under the gun to act on the ruling concerning the Local Share Account program.
“I have already spoken with both my legislative colleagues and local elected officials to advance the necessary legislative remedy to the court’s decision in an aggressive effort to preserve every dollar that has been secured through the LSA process in recent years,” Yudichak said.
His district covers both Luzerne and Carbon counties and he was concerned about maintaining a stream of funding to host municipalities and counties. Luzerne annually receives approximately $12 million on average in Local Share Account program money from gambling revenues from the Mohegan Sun Pocono casino in Plains Township.
“Whether it is critical investments in our public safety systems, local water and sewer systems or job creating economic development projects the Local Share Assessment funds are essential to sustaining communities in Luzerne and Carbon counties as fewer and fewer public dollars are available for local projects,” Yudichak said.
Under the state’s original 2004 casino law, casinos must pay at least 4 percent of gross slot-machine gambling revenues to their host communities. That includes 2 percent to counties and 2 percent or $10 million, whichever is greater, to municipalities.