Casino Tax Revenue Reality Not Meeting Expectations for Erie County, OH

  • Erie County, Ohio receiving $412,000 less per year from casino taxes than projected
  • State over-promised, under-delivered on what it originally told the county
  • County needed casino taxes to make up for previous state revenue cuts
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The share of state casino tax revenue that Erie County receives has fallen more than $400,000 short of projections on average each year.

Original projections much higher

According to a report by Andy Ouriel of the Sandusky Register, the portion of state casino taxes Erie County, Ohio has received since the state’s four casinos were built has fallen well short of expectations.

Over the course of those six years, the shortfall adds up to about $2.5 million

There have been five complete years of tax receipts so far (2013 through 2018), with the average annual distribution to Erie County amounting to $888,000. The high-water mark was $914,000 in 2014. The state had projected the county would receive $1.3 million per year in casino taxes.

Over the course of those six years, the shortfall adds up to about $2.5 million that the Erie County government had counted on to fund county services.

Fortunately, the county has made spending adjustments and has not had to cut jobs or services. Instead, it is putting off larger purchases such as vehicles.

Casino tax needed to balance out other funding cuts

The other problem with receiving less casino tax money than expected is that the state also cut a couple of sources of revenue. The county was banking on the casino taxes to make up for the losses.

The first income stream to go was the tangible personal property tax (TPP), erased by lawmakers in 2005. It took about a decade for it to be completely phased out. Erie County received around $500,000 from the TPP.

Secondly, the state government cut county funding across the state after the casinos opened, resulting in about a $1.1 million loss to Erie County. The casino taxes have only made up a bit more than half of what Erie County needed to reclaim.

“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,” county administrator Pete Daniel told the Sandusky Register. He added that “essentially, the state was having difficulties balancing their budget and did so on the backs of local governments: counties, cities, villages, townships.” He went on to observe that:

The initial figures that were going out painted a very rosy picture.”

Erie County gets a minuscule share of total taxes

The state of Ohio charges casinos a 33 percent tax on adjusted gross gambling revenue. 51 percent of that is split among Ohio’s 88 counties, based on population. 34 percent is distributed to school districts, based on enrollment. Five percent is divided among the four cities that host casinos: Cleveland, Toledo, Columbus, and Cincinnati.

The rest of the casino taxes are distributed to the casino control commission fund (three percent), the Ohio state racing commission fund (three percent), the law enforcement training fund (two percent), and problem gambling plus other funds (two percent).