Tax relief is near, Pa. says, as 7th casino opens

GRANTVILLE, Pa. - After the celebratory grand opening of the state's seventh slots casino here yesterday, Pennsylvania's budget director said that gambling revenue had reached the $570 million threshold that would allow the state to deliver the tax relief promised by slots proponents.

Gov. Rendell signed the Pennsylvania Race Horse Development and Gaming Act into law in July 2004 with the twin aims of providing statewide property-tax relief and revitalizing the state's struggling horse-racing industry. Seven of the 14 slots licenses were designated for racetracks - such as Penn National Race Course.

Under the law, homeowners outside of Philadelphia will receive property-tax rebates, while Philadelphia workers who pay the city wage tax will see reductions in that tax this summer, said Budget Secretary Michael Masch.

He said that of the $854 million estimated to fund tax relief this year, between $90 million and $95 million will go toward reducing the city wage tax by 3/10 of a percent (from 4.2 percent to 3.9 percent for residents and 3.7 percent to 3.5 percent for nonresidents). It will be up to the city to certify the exact amount of the reductions by April 15, Masch said.

"Over the next four years, as legalized gaming grows, the wage cuts will get deeper," said Masch, who is projecting tax relief to reach $1 billion by 2012.

Property-tax rebates will vary according to school district, but the average amount of the rebate will be $185.

Masch said school property taxes for thousands of senior citizens will be eliminated this year because of added gaming revenue.

John Breski of Summerdale joked about the long-awaited property-tax rebates while he waited in line earlier yesterday for the new casino to open.

"I'm going to spend my rebate check," said Breski, 71, although still not convinced that it would ever come.

With a winter storm advisory closing schools and businesses around Harrisburg, about a dozen hardy gamblers huddled outside in 17-degree temperatures by 9 a.m. to be first in line for the opening of the Hollywood Casino at Penn National Race Course. The line grew to about 150 by 10 a.m., with some customers waving rolls of bills and chanting "Hollywood."

"I've waited and watched for years and thought it would never get here," said Ruth Fetterhoff, who was among the hard-core slots players from central Pennsylvania who used to make monthly daylong trips to Atlantic City, but were now staying closer to home to play slots.

Fetterhoff, 62, a retired insurance company executive from Mechanicsburg, said she visited the first casinos in Atlantic City in the late 1970s and was thrilled to be among the first to visit the new Harrisburg casino yesterday.

"Back then, I was young and carefree and childless," she said. "Now, I'm older and carefree, the kid's on her own, and I have disposable income."

Billboards teasing Hollywood Casino and its 2,000 slot machines have been up for months along Interstate 81.

"Rather than throw a few slots into a temporary facility," said Penn National chairman and chief executive officer Peter M. Carlino, "we made a judgment to do it right, if you will, and build a separate, brand-new integrated racing and gaming facility."

The Wyomissing, Pa., company demolished the old grandstand and built a new one to accommodate a 1–mile thoroughbred track.

The five-story, 365,000-square-foot facility combines new technology with the mystique of Hollywood, using movie memorabilia that Penn National inherited after acquiring Hollywood Casino Corp. in 2003.

When his company applied for a Category 1 slots license in late December 2005, Carlino referred to the $260 million Hollywood Casino, as "one of the company's highest priority development projects."

The company said the model for the Grantville property was its top-grossing Charles Town Races & Slots.

The Charles Town casino, in the eastern panhandle of West Virginia, sits on U.S. Route 340 near the borders of four states and has drawn about four million people a year since it added slots in 1996.

The casino is credited by some with resurrecting West Virginia's once-dying horse-racing industry.

About 15 percent of Charles Town's customers come from Pennsylvania. Penn National's strategy has been to steer about half of the Pennsylvania business that Charles Town is expected to lose to Grantville.

View a photo gallery of opening day at http://go.philly.com/ HollywoodCasinoEndText