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ANALYSIS In Pennsylvania, battle begins to get shares of slots revenue



Published: Wed, April 23, 2003 @ 12:00 a.m.



The governor is estimating eventual revenues of $800 million a year.

HARRISBURG (AP) -- The jockeying has begun over the cash expected to flow from legalizing and placing thousands of slot machines at the state's horse racing tracks.

Before the next fiscal year begins July 1, the Legislature is expected to vote on a bill to legalize slots and apportion the revenues.

Interested parties, such as the track owners, horsemen and breeders, are lobbying state lawmakers in an attempt to get as big a share of the slots revenue as they can.

All say they are struggling because bettors are sending their money to out-of-state tracks, like in West Virginia and Delaware, where slot machines have pumped up purses.

Reviewing bills

A spokeswoman for Gov. Ed Rendell said the governor is reviewing the bills to determine "which one he believes is going to encompass his vision."

The governor's wish is to place up to 3,000 slot machines at as many as eight racetracks each. For now, there are four operating racetracks, and Rendell is proposing to tax racetrack owners at a rate of 35 percent of their income from the slots.

Rendell estimates that would bring in $300 million in 2003-04, and eventually $800 million a year to the state to help provide $1.5 billion to boost education funding and reduce property taxes.

Of the bills pending in the Legislature, two have been flagged as potential vehicles for an eventual law to authorize slots: a Senate bill submitted by Republican Robert M. Tomlinson of Bucks County and a House bill submitted by Democrat H. William DeWeese of Greene County.

Track owners' choice

The track owners are plugging Tomlinson's bill as their favorite.

"It's the proper split between the state and the tracks and the horsemen," said Mike Jeannot, chairman of the Pennsylvania Horse Racing Association.

The fees for track owners all appear to be significantly less under Tomlinson's bill. For instance, DeWeese's bill would charge each track $500 per terminal, per year; Tomlinson's would charge a $100 annual fee per terminal.

Tomlinson's measure calls for dividing the revenue this way:

* 54 percent for the track owners;

* 15 percent for the purses at the tracks;

* 1 percent for Pennsylvania horse breeders; and

* 30 percent as a state tax, mostly for property tax relief.

Tomlinson's chief of staff, Jim Cawley, said the senator is amenable to boosting the state tax to 35 percent, as per Rendell's formula.

Of the state revenue, 70 percent would go toward local tax relief. Also benefiting would be the state's pharmacy-benefits programs for the elderly, a volunteer firefighters' fund, and counties, school districts, and municipalities that host a track.

George Hempt, who runs a Cumberland County Standardbred horse-breeding farm, said he asked Tomlinson to raise the percentage of slots revenue that would benefit breeders.

"He told me if we could supply him with some Republican votes, he thought he could do better," Hempt said.

Cawley said the senator responded that way because "those breeding farms are represented by senators who have clearly signaled that they are not going to support this bill."

Breeders' preference

A spokeswoman for the Standardbred Breeders Association of Pennsylvania said the organization prefers DeWeese's bill, which gives them a larger percentage.

After deducting up to 1.5 percent of the slots revenue for state operating expenses and a half-percent for the state's pharmacy-benefits programs for the elderly, DeWeese's bill would spread the revenue this way:

* 40 percent for the track owners;

* 15 percent for the purses at the tracks;

* 4 percent for purses won by Pennsylvania-bred horses;

* 4 percent for Pennsylvania horse breeders;

* 2 percent for pension and health benefits for horsemen, jockeys, and drivers; and

* 35 percent as a state tax for public education funding.

On Tuesday, the Senate finance committee plans to address slots in a public hearing.

Although a newspaper poll of lawmakers showed most of them favoring the legalization of slots, support is still fragile, Cawley said.

"In the Legislature, anything can change," Cawley said.




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