But questions remain about way in which state grants awarded for public projects.

Last updated: April 13. 2013 11:20PM - 6532 Views

Mike Lombardo, Pittston Redevelopment Authority; Mike Lombardo, Pittston City Council and Jason Klush Pittston City Mayor pose for a photo on Main Street in Pittston in a area where several projects were paid for with casino grant money. Clark Van Orden/photo
Mike Lombardo, Pittston Redevelopment Authority; Mike Lombardo, Pittston City Council and Jason Klush Pittston City Mayor pose for a photo on Main Street in Pittston in a area where several projects were paid for with casino grant money. Clark Van Orden/photo
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First of a two-part series that explores how funding from gaming grants has financed public projects throughout Luzerne County.

Since the first ones were awarded in 2008, slot machine-revenue grants have spread millions throughout Luzerne County, ranging from $24,144 for a Nescopeck police cruiser to $12 million to help fund roadway work from Interstate 81 and state Route 315 into the sprawling CenterPoint East Commerce & Trade Park in Jenkins Township.

By law, 2 percent of money wagered in Mohegan Sun at Pocono Downs slot machines is earmarked to be allocated to communities submitting grants each year. So far, the allocations have helped pay for municipal buildings, recycling centers, a library and other public projects.

Thirty-three projects have been funded and reached completion, more than two dozen more are underway and the rest, mostly those that were just awarded grants this year, will be starting shortly.

Yet, five years after the first wave of the 96 grants totaling more than $73 million were awarded, questions remain about criteria used to evaluate applications. Some people say there should be greater emphasis on economic development, and many residents question why money isn’t used largely to reduce real estate taxes.

Without question, the availability of funding for municipal projects appeals to many public officials.

“Everybody’s budget is very difficult and very tight,” said Tim McGinley, chairman of the Luzerne County Council, noting that having access to gambling grants is a major benefit of hosting a casino. “To get that shot in the arm is nice.”

Original intent

Creating that pool was something legislators tucked into the 146-page bill that legalized slot machines across Pennsylvania in a 2004 provision that allocates 2 percent of the gross slot machine revenue generated at the casino toward community and economic development projects in Luzerne County.

The thinking then was to give preference to projects in the venue’s host municipality — Plains Township — and the contiguous municipalities of Bear Creek, Jenkins and Wilkes-Barre townships, Wilkes-Barre city and the boroughs of Forty Fort, Kingston, Laflin, Laurel Run and Wyoming. The state Department of Community and Economic Development was tasked with awarding applicants under the original bill.

Retired state representative Tom Tigue, who voted in favor of the slots bill when he was in office in 2004, said there were many discussions about how to allocate the local revenue.

Provisions were added to the bill’s final version that the House approved 113-88 and the Senate passed 30-20 before then-Gov. Ed Rendell signed it into law. They spelled out how a local share assessment account would be handled in each county where a casino operated.

For Luzerne County, the local Democratic delegation of two senators and six House members agreed to support a version that included the percentage of revenues staying local and being allocated with preference given to the host municipality and nearby communities. The two local Republicans voted against the measure.

Tigue — a member of the Democratic delegation — said the thinking was that the casino would bring heavy traffic and possibly the need for increased police presence to the Route 315 stretch that runs by the Mohegan Sun at Pocono Downs.

“Some of that ended up being overestimated,” Tigue said.

When table games were subsequently legalized in 2010, slots bill language was changed that shifted the government body responsible for sorting through grant requests from DCED to the newly created Commonwealth Financing Authority. In addition, the law allowed each of the county’s 76 municipalities to apply for funding on equal footing, regardless of proximity to the casino.

Job creation projects

While he’s glad to see funds generated in Luzerne County staying here, state Sen. John Yudichak said he doesn’t always agree with the way the Local Share Assessment Account funds are allocated.

“It’s terrific to have an annual appropriation coming to the county,” said Yudichak, D-Plymouth Township, who was a member of the state House when he voted in favor of the 2004 bill legalizing slot machines. “Is the process perfect? Absolutely not.”

He said he would prefer to see funds go toward applications that “stress projects of regional value that create jobs.”

The first year the grant program was in operation, DCED weighed several key factors in reviewing the 72 requests seeking $83 million. Preferred consideration was given to projects that were ready and had community support. Requests exceeded money 7 to 1, so the competition was stiff.

Even with the host/contiguous municipalities factor involved then, seven of the 17 projects awarded funding were in municipalities not in that classification. Among the recipients of the $11,556,096 were:

* $562,500 to Pittston for downtown revitalization and streetscape improvements.

* $627,500 to Plymouth for Main Street development.

* $500,000 to Nanticoke on behalf of Luzerne County Community College to relocate and expand its new Culinary Institute in the city’s downtown.

Yudichak blamed the diminishing pool of other state grants as the reason so many applications have been made recently for projects that might not have been attempted in previous years. They include recycling, energy-efficiency and handicap-accessibility projects.

He said he’d like to see more economic development plans being pushed and awarded grants. The time might be coming to once again review the eligibility and preferences for the types of projects to receive funds, Yudichak said.

Other perspectives

State Rep. Mike Carroll, D-Avoca, succeeded Tigue in office and supported the change in the way the local share is to be handed out. He never thought it was right to create an advantage for some municipalities.

While he agrees some projects that receive funding are not in line with the original intent of the provision — economic development and public safety — he sees nothing wrong with recycling programs or community theaters receiving funding.

Residents in those municipalities also deserve to benefit from the casino’s revenues, said Carroll, in part because their residents patronize Mohegan Sun.

“In order to allow the Freelands and the Jeddos and the Foster Townships of the world to participate, the door had to be allowed to be opened wider,” Carroll said.

He also touched on a topic that’s been a thorny one since the slots bill went into effect: property tax reduction.

One of the major selling points of legalizing casinos was the promise of property tax reduction. While tax increases have been reduced, people have made it clear to elected officials that the system hasn’t worked the way it was promised.

Carroll disagrees, saying that taxes would be much higher if not for the casino funds. Some people have argued that instead of using the local share to benefit private projects or municipalities, the money should go into a pot to additionally reduce property taxes countywide each year.

Carroll said that when factoring in the dollar amount generated (about $12 million annually) with the number of eligible properties in the county for property tax reduction (87,000) it would come out to an average per property of $137 per year.

State Sen. Lisa Baker, R-Lehman Township said: “dedicating all the proceeds to property tax relief would have minimal additional benefit to homeowners across the state. Efforts would be better devoted to the property tax elimination proposals offered again this session.”

Mike Bean, the president of Mohegan Sun at Pocono Downs, said it should be noted the bill’s intent was to reduce the annual tax increases that were burdening families across the state.

Carroll said the benefit of the grants for municipalities offset the dollars taxpayers would have to spend on police car purchases, paving projects, municipal buildings and more.

Baker noted: “There is no doubt that many of the projects funded have offered a tremendous community benefit without the need to seek additional taxpayer dollars. For example, when the roof of the Hoyt Library collapsed and destroyed the Children’s Activity Center, Kingston was able to utilize gaming money to make the repairs.”

Vocal complaints

Like most competitive grant programs, Carroll and Yudichak both said that when some projects are selected over others, it causes animosity and complaints about the process.

“However you do this, there are people that think they’re getting short-changed,” Carroll said.

Swoyersville Councilman Joe Olejnick is among them.

The borough has applied for funding each year that the grant money has been available, but only been the recipient once. It received $360,292 for a new police station and some cruisers.

He said he sees the same towns getting funding each year, mentioning Plains Township, Wilkes-Barre, Kingston and Hazleton, and he wonders why Swoyersville, which is closer to Plains Township than Kingston and Hazleton, usually ends up a loser.

He suggested tweaking the law to allow municipalities that get funding to be prohibited from applying for a year or two so others can compete. The current process just doesn’t seem “fair,” he said, and he’s urged borough residents to contact legislators to express those feelings.

While lawmakers can lobby for projects or lend their support, the decision rests with the Commonwealth Financing Authority.

That seven-member board is made up of the secretaries of Banking, Community and Economic Development, and the Budget, the heads of the Greater Scranton and Greater Pittsburgh chambers of commerce, and the presidents of two private real estate companies, one from Philadelphia, one from Pittsburgh.

Worthy projects lose

“It’s not a pretty process,” Yudichak said. “It’s not an easy process. There’s a lot of worthy projects that go unfunded.”

In the latest round that occurred last month, among the applications for projects that did not get funding was the restoration of the historic Irem Temple mosque on North Franklin Street, Wilkes-Barre.

The Greater Wilkes-Barre Development Corp. — an arm of the Chamber of Commerce — did not get approval for its application for $2.4 million to secure the building and stop vandalism contributing to the building’s deterioration.

“Naturally, we are disappointed,” said Chamber President and Chief Executive Officer Bill Moore. “We realize there are lots of deserving projects out there.”

Year after year applications for projects are denied grants. This year alone, 58 projects were rejected, including $2 million for an upgrade of the Shickshinny Sanitary Sewer Plant, $1.7 million for a Wyoming sewer project and $710,000 to expand the Wright Township municipal building.

“There’s no perfect system for distribution,” Carroll said.

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