If not for an agreement hammered out by state legislators, local officials and representatives of Parx Casino, Bensalem’s expected revenue for 2017 could have been cut significantly due to a loss of host fees from the casino.
That would have been devastating to township services, Bensalem Mayor Joseph DiGirolamo said, as fees paid by Parx make up about 26 percent of the township’s general fund revenues.
The dilemma results from September’s ruling by the Pennsylvania Supreme Court, which struck down the portion of the state gaming law that requires Parx to pay Bensalem host fees, putting the $10 million banked by the township each year in jeopardy.
But a week after Bensalem Council passed its 2017 budget to the tune of $71,633,100, an agreement was announced between Parx and the township to secure the $10 million host fee, just for this year.
State Sen. Tommy Tomlinson, state Rep. Gene DiGirolamo, Parx Director of Community Development Ron Davis and Tom Bonner, the casino’s chief counsel and vice president, attended the Bensalem Council meeting last week to announce the deal.
“The Supreme Court shut down the $10 million flat fee, calling it a two-tier tax system,” Tomlinson said. “I don’t agree with them, but that was their decision.”
The ruling can’t be appealed, but Tomlinson said that securing the money for years to come is a top priority in the upcoming legislative session.
Legislation has already been introduced to reinstate the local share, but it was amended in the state House to expand fantasy sports and internet gaming in the state. According to a representative from Tomlinson’s office, that brought some serious issues for the bill passing the Senate.
Now the bill is all but dead, but some legislators, including Tomlinson and DiGirolamo, are hopeful that the issue can be worked out before the middle of April, when many municipalities are due their next checks from the casinos.
The belief is that internet gaming has had some issues in New Jersey, where it was passed into law, and could hurt traffic in some of the brick and mortar casinos. That could subsequently hurt the local share in places like Bensalem, while areas currently without casino revenue are looking to make a grab at money generated from online gaming.
“That’s why this memorandum agreement is so important, to give you the stability and so that Gene and I are not leveraged in a vote,” Tomlinson said.
Parx officials also spoke on behalf of the casino.
“As Gene DiGirolamo said, we didn’t have to do this, but we think we did,” Bonner said to Council. “When we came in, we knew that the deal was that the township get $10 million in local share, so we feel, regardless of the law being changed or stricken by the court, that we had to do it. It was the right thing to do.”
There has been no public discussion whether this arrangement would continue to 2018. If that $10 million is not secured via new legislation or another deal, Bensalem may be forced to make some tough choices in its budget next year.
Projections for the 2017 budget show an expected leap in expenditures of over $8 million, from 2016’s $63,308,500 figure. It’s worth noting that the money hasn’t been spent yet, and it’s possible that the 2017 figures won’t reach that height.
Bryan Allen, the only council member who voted against the now-passed 2017 budget, had some concerns about the increased spending in the long term.
“The alarm bells sounded when we passed the earned income tax,” Allen said, referring to the 1-percent tax passed last year to balance the budget. “We have to deal with some of our structural issues.”
Despite maintaining the casino money, and earning a few more million from the earned income tax this year, Bensalem is still projected to spend over $7 million more than the approximate $64 million in expected revenue.
“It’s alarming to me,” Allen said, reiterating that he would prefer to take a harder look at the budget and see what can be cut without hurting township services.
Still, there is a silver lining for residents. The Homeowners Assistance Grant has been raised from $100 in 2016 to $200 in 2017. That’s money paid to residents, funded by the host fees from the casino. Bensalem is the only municipality of those who receive host fees from casinos in Pennsylvania to give money directly back to residents. The passed budget also holds the line on property taxes.
“This 2017 budget will enable the continuation of a full scope of high-quality municipal services,” DiGirolamo wrote in a letter to residents when he proposed the budget. “It will maintain, if not enhance, our ability to deliver to the residents of Bensalem the quality of life they have come to expect.” ••