The casino tax gamble that hasn't paid off

SANDUSKY — When people walk into casinos, visions of hitting the big jackpot and leaving with a cash-stuffed wallet often crowd their minds — and possibly cloud good-gambling judgment.But then reality sinks in, and the odds take over. After futile attempts at slot machines or card tables, visitors often leave with less money than what they entered the establishment with.Erie County officials, unfortunately, know the feeling of disappointment and coming up short all too well.Just look to their casino-related tax receipts to realize their plight.Failing figuresDuring full-year collections, between 2013 and 2018, the county has annually received, on average, $888,000.A portion of tax money coming from Ohio's four full-scale regulated casinos — Cincinnati, Cleveland, Columbus and Toledo — goes toward funding many public services in Erie County. Once the casinos opened, between 2012 and 2013, tax money began to accumulate and, eventually, distributed.Though it's far less compared to original projections of Erie County receiving $1.3 million per year.The county never came close to hitting that lofty number. The highest amount ever obtained within a 12-month period? About $914,000 in 2014.So what happened?Erie County officials based their estimations on information coming directly from the state. In short, the state overstated those figures and under-delivered on its monetary promises."The initial figures that were going out painted a very rosy picture," county administrator Pete Daniel said.Casino tax money also aimed to offset two funding sources Erie County previously and greatly depended upon:• 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 funding dropped by $1.1 million from the mid-2000s to 2014.Stay in the year 2014 to best understand the depressing fiscal point: When combining losses from those two accounts, $1.6 million, and factoring in Erie County's best year of casino tax collections, $914,000, it comes out to about $686,000 in the red.And the gap has only grown in recent times, as collections have plummeted to about $887,000, on average, per year since then.Putting the numbers into perspectiveTallying actual casino tax income and weighing it against original annual projections, between 2013, and 2018, it amounts to almost $2.5 million in lost income opportunities for Erie County. It's a sizable number, considering Erie County's everyday operating budget hovers at $31 million."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 said. "Essentially, the state was having difficulties balancing their budget and did so on the backs of local governments: counties, cities, villages, townships."The county hasn't experienced any noticeable fallout from the lower-than-anticipated tax collections. For instance, commissioners haven't laid off workers because of this. But officials have shied away from bigger capital purchases, such as vehicles, they might have otherwise considered with more casino money.No doubt commissioners want to see larger casino tax receipts. But they're not organizing trips for locals so they can wager a paycheck in Cleveland or Toledo on Red 7 at a roulette wheel or doubling down on an 11 blackjack count.What they will do: Continue their cost-conscious spending practices to best manage taxpayer dollars."We would like to see the casino revenue numbers be higher," commissioner Matt Old said. "They currently have not made up for the cuts from the state over the last decade. This is yet another reason why it is important for the commissioners to keep county spending levels under control. We will continue to watch every penny."Since Ohio's four casinos opened, Erie County has collected less money in related tax revenues than originally anticipated.By the numbers: Casino taxesAbout a third of a casino's gross revenue is paid out in taxes. Here's how the tax money in Ohio is divvied up:• 51 percent: County fund — distributed quarterly to Ohio's 88 counties based on population; Eight cities with populations exceeding 80,000 people also receive a separate cut.• 34 percent: County student fund — distributed in January and August to all school districts in Ohio, based on student population• 5 percent: Host city fund — distributed to the four cities with casinos: Cincinnati, Cleveland, Columbus and Toledo• 3 percent: Casino control commission fund — helps pay for Ohio's governing body overseeing casino operations• 3 percent: Ohio state racing commission fund• 2 percent: Law enforcement training fund• 2 percent: Problem gambling, additional fundsSource: Ohio Department of TaxationReach reporter Andy Ouriel at ouriel@sanduskyregister.com and follow him on Twitter @AndyOuriel.