Another state on gaming bandwagon | NevadaAppeal.com

Another state on gaming bandwagon

Nevada Appeal editorial board

Pennsylvania has become the latest state to decide slot machines are the way to lower taxes.

The governor, Ed Rendell, this week signed a law that will allow as many as 61,000 slot machines there – more than any state except Nevada.

“It isn’t a panacea, but it certainly isn’t the demon it’s been made out to be,” Rendell said. “It’s a good, significant step on the road to property-tax relief.”

Well, as residents of the state that invented legalized gambling, we shouldn’t be too surprised to see states continuing to jump on what they view as the easy-money bandwagon.

Pennsylvania becomes the 18th state to legalize slot machines, and that doesn’t count casinos operated by Indian tribes.

Gov. Rendell is expecting the slots to generate $3 billion in annual revenue. Licensees, who will be paying up to $50 million apiece for the privilege, will get to keep just 48 percent of the gross. The rest goes to property-tax relief, as well as money to revive the horse-racing industry, fund construction projects and help cities and counties.

Yes, 52 percent of the gross will go to government projects. We’re not sure how businesses will survive on that kind of margin, but we are sure this is a backward way of shifting taxes. The tax relief is mainly aimed at the state’s 501 school districts.

As Nevadans can testify, reliance on gaming to support government doesn’t mean the hard decisions go away. It seems particularly risky to let the future of your schools ride on the ups and downs of the casino market.

It’s also rather ironic that as Nevada strives mightily to diversify its economy away from gaming and entertainment, which were nearly brought to their knees by the post-Sept. 11 drop in tourism, other states are hoping to cash in.

The fundamental problem, however, is politicians who see gaming as a means of increasing government revenues by taxing the mythical “man behind the tree.” Someone always pays, and with gambling it’s often those who least use the services and can least afford the expense, who end up paying the most.