State Supreme Court decision to halt LSA money worries municipal officials


By Melanie Mizenko - mmizenko@timesleader.com



LSA-FUNDED

PROJECTS

A snapshot of some projects funded by LSA grants in Luzerne County:

• Mill Creek flood mitigation

• Kirby Park track and field renovations

• Acquisition and demolition of properties in Nanticoke’s downtown corridor

• Streetscape improvements along North Main Street, Plains Township

• Avoca’s new municipal building

• New fire engine for Hunlock Township

Local municipal officials are worried about lacking money to cover expenses should a state Supreme Court decision hold.

The court recently struck down a provision of state law related to the local share tax imposed on casinos that funds grants on which communities, partnerships and municipalities have come to rely. The decision stems from an appeal filed by the owner of Monroe County’s Mount Airy Casino & Resort.

According to court documents, communities in the Philadelphia region that don’t have a casino within their borders are receiving unequal revenue, and the tax must be reworked.

Casinos in Philadelphia are taxed for their local share at a rate of 4 percent, but Mount Airy claimed the tax was illegal because other casinos were paying a municipal tax of 2 percent of their gross slot machine revenue or a lump sum of $10 million, whichever is greater.

Mount Airy argued that the two-tiered system creates unequal tax rates based on income.

State Auditor General Eugene DePasquale urged the General Assembly on Tuesday to pass changes which would otherwise cost local governments $140 million a year and endanger services to residents. In 2015, Luzerne County municipalities received $12.15 million in Local Share Account grants.

“It would be a terrible thing for communities to lose,” James Reino, chairman of the Kingston Township Board of Supervisors, said. He noted a partnership with the borough of Luzerne gaining LSA funds to pave Bunker Hill as an LSA success.

Halting the grants would mean projects like the Back Mountain Community Partnership’s Regional EMA Building wouldn’t be built, and thus couldn’t serve residents.

“Many counties, cities, boroughs and townships rely on these casino funds to shore up tight budgets for road and bridge maintenance, fire protection, police cars, libraries, debt service and other public service projects,” DePasquale said.

For Jackson Township, the loss of LSA grants would be “devastating,” said Supervisors Chairman John Wilkes Jr. “We couldn’t do without it.”

Both Reino and Wilkes caution that taxes could be raised to complete unfunded state mandates, with which LSA money assists.

Wilkes said the mandates are “crippling.”

“Bottom line is, it’s still going to be hard for small towns to do any projects,” if lawmakers don’t figure out how to fix the tax, Reino said.

As for Wilkes-Barre, which has received $14 million in LSA grants over the past nine years, city Administrator Ted Wampole said the administration would be forced to look at other sources of revenue.

“We’re already facing a 30-mill tax increase,” Wampole stressed. “It’s an important source of funding.”

Wampole notes that some of the projects funded with LSA grants go through municipal hosts, but they actually benefit community organizations. He provided a spreadsheet showing that over nine years, LSA money has funded projects including track and field renovations at Kirby Park, King’s College on the Square/Ramada Hotel renovations and renovations for the Wyoming Valley Art League building.

Lawmakers have until Jan. 20 to come up with a fix, or they can ask for an extension, according to the court decision.

“It is essential that the General Assembly acts quickly and decisively to remedy the local share assessment process thrown out by the Supreme Court,” State Sen. John Yudichak, D-Plymouth Township, said.

State Rep. Aaron Kaufer, R-Luzerne, is on the Gaming Oversight Committee and confirmed they met Tuesday to discuss the upcoming plans.

Kaufer said the administration didn’t offer any plans and they were deferring to the Legislature, which is at square one.

“It’s frustrating,” he said, noting there are only four more session days this year and no session days are scheduled yet for next year.

By Melanie Mizenko

mmizenko@timesleader.com

LSA-FUNDED

PROJECTS

A snapshot of some projects funded by LSA grants in Luzerne County:

• Mill Creek flood mitigation

• Kirby Park track and field renovations

• Acquisition and demolition of properties in Nanticoke’s downtown corridor

• Streetscape improvements along North Main Street, Plains Township

• Avoca’s new municipal building

• New fire engine for Hunlock Township

Reach Melanie Mizenko at 570-991-6116 or on Twitter @TL_MMizenko.

Reach Melanie Mizenko at 570-991-6116 or on Twitter @TL_MMizenko.

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