Lehigh Valley

Stakes high for municipalities relying on casino money

Stakes high for municipalities relying on casino money; video report by WFMZ's Bo Koltnow

FOUNTAIN HILL, Pa. - The Pennsylvania Supreme Court struck down a law last month that required casinos to pay host fees to surrounding municipalities. Now, state lawmakers have just a few short months to rewrite the law, or the cash is gone for good.

Within the one-square-mile of Fountain Hill, Lehigh County,l 40 properties are tax-exempt.

"A major challenge for council, a major challenge for council," said Tony Branco, the borough's executive administrator.

Branco said it's why taxes are high. He said another tax hike could come if money from the Sands casino in neighboring Bethlehem stops.

"Right now, I'm not budgeting for any new cruiser cars. I'm not going to budget for full or part time employees," he added.

Since 2010, on average, the tiny borough received $90,000 from the Sands as part of a host fee tax.

From new cruisers to new equipment, the money was marked for public safety, but after a recent state Supreme Court ruling called the tax unconstitutional, the $10 million-a-year host fee payments the Sands made to area communities is set to go bust.

Larry Rapp, the borough council president, said he thinks public safety will suffer.

"Oh yeah," he said. "We couldn't keep up to date with equipment as we do now."

Police Chief Ed Bachert said the biggest hit would be the possible loss of three part-time officers.

"It's very expensive to find and hire good police officers," he said.

It's not just affecting Fountain Hill. Lehigh County Executive Tom Muller said he'll veto a property tax cut proposal, due in part to the budget chaos created by the uncertainty with casino cash.

"Gaming is a substantial hit. $800,000," he said of the amount the county receives.

The courts gave legislators several months to find a solution. Currently, legislators are in Harrisburg working on a solution, while Branco is left preparing a 2017 budget without betting on that gaming boost.

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