The Gaming Control Board reported today that slot machines produced gross revenue of $196,635,849 in August of this year and $108,121,631 in tax revenue. That compares to $186,936,232 in gross revenue and $102,789,443 in tax revenue during August 2009.  Slot machine revenue is taxed at 55%.

Revenue for the month also showed an increase of 2.60% when comparing just the eight casinos that have operated for at least a full year. The ninth casino, The Rivers, opened on August 9, 2009, and therefore could not be utilized for this comparison.

Gaming Control Board Chairman Greg Fajt said the solid figures in August complete a strong summer for gaming in Pennsylvania.

“Expansion at Commonwealth casinos during the past 90 days has produced tremendous benefits to Pennsylvanians,” says Fajt. “In addition to the growth in tax revenue from slot machine gaming that affords, among other things, a reduction in homeowners property taxes, more than 4,000 additional jobs were created through the rollout of table games.”

Gross revenue for each of the casinos operating in August 2010 is as follows, with percentage change reflected for those casinos that were operating in both years:

*The Rivers Casino was opened for only 23 full gaming days in August 2009.

The average number of slot machines operating statewide daily during August was 25,051.

About the Pennsylvania Gaming Control Board

The Pennsylvania Gaming Control Board was established in 2004 with the passage of Act 71, also known as the Race Horse Development and Gaming Act.  Pennsylvania’s first new state agency in nearly 40 years, the Gaming Control Board is tasked to oversee all aspects of the state’s casino industry.  To date, with nine of a maximum fourteen casinos in operation, legalized gaming in the Commonwealth has created over 8,000 new living wage jobs, revenue that has provided property tax reduction in each of the past three years for all homeowners, funds that have reinvigorated Pennsylvania’s horse racing industry, and new revenue to local governments that has funded scores of community projects.  A wealth of information about the Gaming Control Board and Pennsylvania’s gaming industry can be found at www.pgcb.state.pa.us. At this web site, visitors can view videos of Board meetings and the operation of the PGCB, obtain information on identifying a gambling problem and gaining assistance, look up future meeting schedules and past meeting transcripts, access an interactive map of casino locations, request a speaker for their group, along with much more information.

Grassroots anger at the inability of Washington to live within a budget has been building for some time, and began to boil over in late 2007 as the Bush Administration and Treasury Secretary Paulson abandoned their claimed free market principles to bail out auto makers and Wall Street banks through TARP.

When newly-elected President Obama and his allies in Congress passed the $780 billion debt stimulus plan in February 2009, activists took to the streets.

On tax day, the tea party movement began in earnest. Until now the movement has remained at the local levels. No longer will that be the case. The movement is coming to Washington on September 12, 2009 for a march and rally at the US Capitol.

From autos to banking, the government is crowding out the private sector of our economy. Where Bush bailed out the private sector, Obama is making hostile government takeovers. Ignoring our multi trillion dollar deficit, Washington is considering a massive new energy tax and a takeover of health care.

On Saturday, September 12^th FreedomWorks will be joined by over ten thousands of liberty-loving activists to take a stand against politicians who are bankrupting our future. National co-sponsors include Tea Party Patriots, ResistNet, National Taxpayers Union, Americans For Tax Reform, Young Americans for Liberty, Ayn Rand Center, Campaign for Liberty, Free Republic, Young America’s Foundation, Smart Girl Politics, and The Club for Growth.

The event will kick-off on September 10^th and 11^th with various events throughout Washington including grassroots leadership training and Capitol Hill visits. The three-day event culminates on September 12^th as taxpayers march on the Capitol building.

For more information, including media inquiries, registration, contacting event coordinators, and the schedule of events, please visit our event website at www.912dc.org.

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Sales tax receipts totaled $662.7 million for August, $13.4 million below estimate. Year-to-date sales tax collections total $1.4 billion, which is $13.4 million, or 1 percent, less than anticipated.

Personal income tax (PIT) revenue in August was $683.5 million, $28.3 million below estimate. This brings year-to-date PIT collections to $1.3 billion, which is $28.4 million, or 2.1 percent, below estimate. August corporation tax revenue of $50.2 million was $3.9 million above estimate.

Year-to-date corporation tax collections total $137.9 million, which is $2.1 million, or 1.6 percent, above estimate.

Other General Fund revenue figures for the month included $59.2 million in inheritance tax, $2.6 million below estimate, bringing the year-to-date total to $122.5 million, which is $2.7 million below estimate.

Realty transfer tax was $29.1 million for August, $2.2 million below estimate, bringing the total to $58.7 million for the year, which is $2.2 million less than anticipated.

Other General Fund tax revenue, including cigarette, malt beverage and liquor taxes totaled $91.5 million for the month, $8.5 million above estimate and bringing the year-to-date total to $174 million, which is $8.4 million above estimate.

Non-tax revenue totaled $29.3 million for the month, $14.2 million above estimate, bringing the year-to-date total to $42 million, which is also $14.2 million above estimate.

In addition to the General Fund collections, the Motor License Fund received $151.5 million for the month, $23.8 million below estimate. Fiscal year-to-date collections for the fund total $471.3 million, which is $23.8 million, or 4.8 percent, below estimate.

The Gaming Fund received $64.9 million in unrestricted revenues for August. Fiscal year-to-date collections for the fund total $124.7 million. Gaming Fund receipts include taxes, fees and interest. Of the total for the month, $64.8 million was collected in state taxes for property tax relief, bringing the year-to-date total to $124.6 million.

Other gaming-related revenues collected for August included $7.6 million for the Local Share Assessment, for a net total of $9.6 million for the year; $9.5 million for the Economic Development and Tourism Fund, for a year-to-date total of $18.3 million; and $22.8 million for the Race Horse Development Fund, bringing the total for the year to $43.9 million.

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Wagner sent copies of his report to DGS, Gov. Rendell, and the General Assembly, recommending that they immediately cancel a sales agreement with River Vue Associates, as well as lease agreements with the seven private landlords.

“Our investigation proves conclusively that the sale of the State Office Building is a bad deal for taxpayers,” Wagner said. “It was a fire sale conducted during the worst real estate downturn since the Great Depression, and it needs to be reversed. With our commonwealth struggling to close a budget deficit in the billions of dollars, it would be fiscally reckless to saddle taxpayers with long-term spending obligations they don’t want and can’t afford.”

Besides being a bad financial deal for taxpayers, the investigation also found that selling the State Office Building will decentralize commonwealth operations and relocate agencies to seven different buildings throughout Allegheny and Westmoreland counties, making it harder for taxpayers to find the services they are seeking.

“The residents of southwestern Pennsylvania, who have been able to access numerous state government offices in a single remarkable location for over a half-century – the dream of Pittsburgh mayor and, later, Pennsylvania governor, David L. Lawrence – will suffer due to the inconvenience and confusion caused by this decentralization,” said Wagner, who added, “Decentralization adds costs and decreases efficiencies in state government.”

Opened in 1957 and located at the entrance to Point State Park at the tip of Pittsburgh’s Golden Triangle, the State Office Building was the first structure the commonwealth built outside of Harrisburg to place numerous state agencies under one roof. The 16-story building cost $8 million to construct and contains 274,308 square feet of office space and a 23,848-square-foot basement. Along with the Gateway Center complex, it stood as a symbol of Pittsburgh’s first post-World War II downtown renaissance.

Wagner’s investigators determined that the Department of General Services grossly exaggerated the benefits of the sale of the State Office Building by using the highest conceivable estimate of renovation costs (based on completely “gutting” the building) and understating the cost of leasing office space elsewhere. As a result, DGS concluded that a sale would save the state $14 million over 20 years. However, in reaching that conclusion, General Services did not take into account all costs to be incurred by leasing and used a 20-year time period despite DGS’s own estimate that renovations would extend the useful life of the building by an additional 30 years.

When lease costs are projected over 30 years, investigators found that selling the State Office Building would not save money, but instead would cost taxpayers a significant amount. Investigators estimated the 30-year cost of leasing other office space at $220.8 million, compared with an estimated cost of $166.2 million to refurbish and maintain the building, for a net cost to
taxpayers of $54.6 million.

“Somebody got a great deal on the sale of the Pittsburgh State Office Building,” Wagner said, “but it sure wasn’t the taxpayers of the Commonwealth of Pennsylvania.”

Investigators also found:

* DGS understated the full amount to be paid for leased office space. It said that the average price for three main office leases would be $11.16 per square foot. However, when additional charges to cover operational costs were included, the average cost to taxpayers rose to $25.75 per square foot. In addition, DGS’s estimates entirely ignored the costs of three other leases. A total of seven new leases will be required to house the 22 state agencies and 800 state employees displaced by the sale of the building.
* DGS sold the building for less than its appraised value, for less than the sale amounts of other commercial buildings in Pittsburgh’s central business district, and for significantly less than the sale price of the Philadelphia State Office Building. After certain required deductions and payments, including $160,000 in brokerage fees, the state will net only $1.5 million from the sale — roughly one-third of the building’s $4.6 million sale price.
* DGS did not hold any public hearings on the sale of the building. There was a single informational meeting held, not by General Services, but by a legislative committee. The meeting was held in Harrisburg on the day before the passage of the bill that authorized the sale of the building and 11 other state properties. There were no hearings advertised or held in the Pittsburgh area.
* The owners of Piatt Place, at 301 Fifth Avenue in downtown Pittsburgh, who will receive $165 million in lease payments from the state over the next 30 years, are affiliated with River Vue Associates, the purchaser of the State Office Building. Due to the timing of the leases and the sales closing, the Department of General Services may end up making payments to lease new space from Piatt Place and other landlords even before it receives payment from River Vue for the sale of the building.

“The overall conclusion of this report is that, as a result of its disregard for the best interests of the commonwealth and taxpayers, the Department of General Services sold the State Office Building for less than what it was worth so that it could proceed with new lease agreements – a decision that will ultimately cost the commonwealth and taxpayers almost the entire amount of money that DGS claims would be required to renovate the building,” Wagner said.

General Services estimated that a comprehensive rehabilitation of the State Office Building would cost $64 million. However, DGS staff admitted to Wagner’s investigators that the cost could be significantly lower. Wagner noted that DGS failed to use $15.5 million in capital budget funds for renovations, which the General Assembly had authorized in 1994 and 2002. Wagner has also proposed spending a small portion of the new federal stimulus funds for certain authorized “green” expenditures involved in the renovation of the building.

Wagner’s report, which includes numerous appendices as well as DGS’s response, is available to the public at www.auditorgen.state.pa.us.

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly. He is the commonwealth’s elected independent fiscal watchdog, conducting financial audits, performance audits, and special investigations. The Department of the Auditor General conducts approximately 5,000 audits per year. To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department’s website at www.auditorgen.state.pa.us.

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