Pennsylvania is about to enter the racino game, by legalizing slot machines at 12 racetracks and standalone casinos throughout the state. The state's rake will be big: the current bill provides for "up to $1 billion a year for school property tax relief ... [and] would create a new statewide economic development fund of up to $2 billion." Pittsburgh-area officials had a list of "specific priorities" for their share of the funds:
$44 million to help finance a new convention center hotel, $20 million to defray the convention center's annual deficit, another $20 million to finish construction of the convention center, $80 million for infrastructure needs in smaller Allegheny County towns, $60 million to retire the debt of the Pittsburgh Development Fund, and a slim possibility of funds for a new hockey arena in Pittsburgh.
While it might seem odd that public officials would earmark funds for deficit and debt relief, Pittsburgh has been in a financial bind. The reason? According to the Allegheny Institute, an "economic development initiative" centered on the construction of stadiums for the Pirates and Steelers had, ahem, failed to develop the economy, and left the city in a financial crisis.
A new hockey arena doesn't rank high on the list of a city burdened with substantial debt from earlier projects. But Penguins owner Mario Lemeiux has played the relocation card, declaring the team will be a "free agent" following the 2007 season, when its lease at Mellon arena expires. Having met resistance at the local level, the Penguins appear poised to benefit from what the Pittsburgh Post-Gazette calls "Slots bill tinkering."
State legislators pushing slot machine legislation are putting their faith in Pittsburgh's Sports & Exhibition Authority.
Rather than directing that slot machine revenue go toward Pittsburgh's convention center, as an earlier version had done, the slots bill nearing a Senate vote tonight will leave that decision up to the city-county sports authority...
They operate an unfinished convention center burdened with debt. But how do you think the "Sports & Exhibition Authority" will choose to spend its slot-machine windfall? I'm betting on a sweet stadium subsidy. But do they have the nerve, given the record in Pittsburgh, to justify the investment on economic development grounds?