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Municipalities could benefit from changes in Local Share Account law

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Washington County’s municipalities could have an opportunity to receive something extra in the Local Share Account funding they receive as a result of changes made by a new law that provides an equitable funding formula for the state’s 12 casinos to pay local share funds.

When Gov. Tom Wolf signed an expanded gambling law for Pennsylvania on Oct. 30, he also signed House Bill 271, which ended a protracted legislative challenge from the state Supreme Court to find an equitable way for all 12 of the state’s casinos to fund local share money.

In September 2016, the state Supreme Court ruled part of a 2004 gambling law that outlines how casino revenue is distributed to host communities violated a provision in the state constitution. The state Legislature was charged with finding a better way for casinos to fund LSAs, but was not able to do so by a May 26 deadline. Casinos were thus permitted to stop those payments May 27.

For Washington County, however, the missed legislative deadline didn’t pose a threat. Pinnacle Entertainment, the operator of The Meadows Casino, agreed to maintain its LSA contributions to North Strabane Township and to Washington County.

State Rep. Brandon Neuman, D-North Strabane, said Monday H.B. 271 “restores LSA funding permanently with no expiration date.”

While acknowledging the legislation could be challenged in court, Neuman said the House is confident the law would pass muster. He added the only way the funding process could be changed would be with the introduction and passage of new legislation.

The passage of H.B. 271 was buried in a much broader gaming bill that expanded the commonwealth’s gambling choices, including the option of placing video gaming terminals at truck stops, airports and the ability of the casino owner/operators to place smaller satellite casinos in the commonwealth.

The most significant change in the new law is the formula for the distribution of funds to municipalities in the counties that host a casino. Currently, 66 of Washington County’s 67 municipalities, receive an annual direct LSA contribution of $25,000 plus $10 for each resident. North Strabane Township, as the host municipality, is covered by a different formula.

The new law stipulates that the Department of Revenue will make distributions directly to each municipality within the county, except the host municipality, by using a formula equal to the sum of $25,000 plus $10 per resident of the municipality provided however that the amount “shall not exceed 50 percent of its total budget for fiscal year 2009 or 2013, whichever is greater. The law further states that the amount will be adjusted for inflation in subsequent fiscal years by an amount not to exceed an annual cost-of-living adjustment calculated by applying any upward percentage change in the consumer price index.

“There’s an opportunity for some that number” won’t exceed 50 percent of their budget, Neuman said.

Washington Mayor Scott Putnam said Tuesday the formula probably won’t affect most larger municipalities with bigger populations.

“Where our budget sits, we don’t get anywhere near” the 50 percent cap, Putnam said, explaining the city is currently looking at a spending plan of $13.5 million to $14.5 million. “We’re getting the most we can get” from the LSA distribution.

Neuman and Putnam said smaller municipalities with lower populations may benefit from the change in the law.

Donegal Township supervisors Chairman Doug Teagarden said Tuesday the township, which has about 2,500 residents, would consider whether it could receive more in local share distributions, although he acknowledged he was not up to speed on the change.

“It’s something that we’ll look into,” he said, adding the township is struggling with its finances and is looking for ways to increase revenue.

It was unknown Tuesday whether a process was in place for municipalities to submit their requests.

The new law doesn’t change much with regard to how much the host community, North Strabane Township, will receive.

North Strabane Township Manager Frank Siffrinn said Tuesday the township will continue to receive the $2.7 million it has been receiving. He said the funding could be impacted somewhat when the consumer price index is applied in subsequent years.

Siffrinn said the township recently sent a letter to the state Department of Revenue seeking an explanation of the new law, but was told last week that no mechanism has been determined for filing the claims.

Neuman said Monday it appears the law would take effect Dec. 31, meaning the new formula would be in place for 2018.

North Strabane has used LSA funds to float a bond to build a new community park and to purchase to purchase a new aerial truck for its fire department.

The Meadows generates an average of $10 million per year in LSA funding for Washington County, an amount it recommitted to with commissioners in August.

On Dec. 4 and 5, the county will hear presentations on LSA funding requests in the form of 72 applications from municipalities and nonprofits.

Last week, Jeff Kotula, president of the Washington County Chamber of Commerce and chairman of the LSA panel, said after the municipalites receive their share of direct distribution, which will be about $3.5 million, the panel will have between $6 million and $7 million to disburse for approved projects.

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