When states, counties, and cities discuss the possibility of legalizing casino gambling or authorizing the construction of a new casino, they always talk about the boon it will be to the economy. The casino will create new jobs, ancillary businesses will grow, and the government will reap the tax benefits. According to a report in the Sandusky Register, however, some of those dreams have not come true for Erie County, Ohio.
County not getting the casino taxes it had expected
Erie County, as its name might imply, is located on the southern-most shore of Lake Erie, about halfway between Toledo and Cleveland. There are four full-fledged, land-based casinos in Ohio: Hollywood Casino Columbus, Hollywood Casino Toledo, Jack Cincinnati Casino, and Jack Cleveland Casino. As part of the deal when they were opened in 2012 and 2013, a portion of their casino tax is distributed to the many counties in Ohio.
And that’s great Every county can likely put that money to good use to fund public services. But the problem for Erie County is that they money it has received from casinos has not been able to make up for money the state cut. Reporter Andy Ouriel writes that from 2013 through 2018, years in which collections covered an entire year, Erie County got an average of $888,000. It had projected that it would receive $1.3 million per year. No year has even topped $1 million.
“The initial figures that were going out [from the state government] painted a very rosy picture,” county administrator Pete Daniel told the Register.
Taxes not replacing other lost funds
Now, if that $888,000 per year was a new line item on the county’s budget on top of all of the other income that was coming in, it would be gravy. But Erie County officials were counting on the casino tax to make up for sources of funds that the state had eliminated. From the Register:
• Personal property taxes; Shortly after these casinos opened, the state completely eliminated this assessment to make Ohio a more “business-friendly” area. Erie County used to receive about $500,000 a year in personal property taxes.
• Local government funds: When casinos opened, the state significantly slashed government funds going to counties. In Erie County’s situation, it’s [sic] funding dropped by $1.1 million from the mid-2000s to 2014.
So that’s $1.6 million in revenue being replaced by $888,000 in revenue. The math does not work out in Erie County’s favor.
“When the casino tax was put in place (in 2012), the idea was that it was supposed to make up for revenues we were losing because of actions taken at the state level,” Daniel explained. “Essentially, the state was having difficulties balancing their budget and did so on the backs of local governments: counties, cities, villages, townships.”
Fortunately, to this point, the shortfall has not hurt the county too badly. The main belt-tightening has been with “bigger capital purchases” like vehicles. No jobs have been lost, parks are not overgrown. There are also no casino junkets planned for locals, either, to try to drive up those casino taxes. Erie County just plans to spend carefully and to be smart with its money.
