Rivers Casino, Pittsburgh Agree On $10 Million Deal To Avoid Tax Problem

Dustin Gouker November 16, 2016
Pittsburgh Rivers Casino tax
Rivers Casino and the city of Pittsburgh are on the same page on gaming tax revenue, after trading barbs in public and in court earlier this year.

The mayor of Pittsburgh, Bill Peduto, presented his budget of $540 million on Monday.

That budget includes $10 million in a deal struck between the city and Rivers, according to the Pittsburgh Post-Gazette, to deal with a shortfall created by a state Supreme Court ruling regarding casino taxes.

The backstory on the casino tax

A tax on PA casinos that benefited jurisdictions that host them was struck down as unconstitutional earlier this year.

The plaintiff in that case was Mount Airy Casino, although Rivers filed a similar complaint this summer.

Rivers paid the city $10 million a year under the now defunct tax law.

Inside the Rivers-Pittsburgh deal

More from the PPG on the deal:

In Pittsburgh, which receives $10 million a year from Rivers, city and casino officials are finalizing a contribution arrangement as a stopgap measure, according to Mr. Peduto’s administration.

“To reinforce Rivers Casino’s strong commitment to our hometown, we have worked collaboratively with city officials to ensure that $10 million in annual local share payments from Rivers Casino to Pittsburgh will continue uninterrupted through 2017,” casino general manager Craig Clark said in a statement.

Those details have not yet been posted on the mayor’s website.

Earlier this year, Peduto had scolder Rivers for challenging the tax, saying:

“Rivers Casino knew about this funding commitment prior to applying for their license, and knew this funding was due to the city for hosting them. Our intent is to fight this lawsuit vigorously.”

No fix from legislature yet, still a problem for other cities

The state legislature has plans to fix the illegal gaming tax, but it apparently won’t happen this year and will wait until 2017. The House passed a tax fix, but the Senate did not act.

Still, the tax taken off the books by the court results in a shortfall of more than $140 million for jurisdictions around the state.

That means that the budget impact on cities and counties around the state could be palpable without deals like the one brokered between Pittsburgh and Rivers. Here’s an example from Erie, which could suffer a big blow without the casino tax.

Short of similar deals being struck between municipalities and casinos — or a quick fix from the statehouse — the budgets of a lot of places will be up in the air.

 

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