State Representative Michele Lepore-Hagan (D-Youngstown) Monday called on Governor John Kasich to abide by Ohio law and immediately take the steps necessary to secure millions of dollars in long-promised and much-needed funding for the communities that are home to the state’s racinos.

According to Rep. Lepore-Hagan, two bills signed by the governor, House Bill 386 signed into law on June 11, 2012 and House Bill 59 signed into law on June 30, 2013, mandate that the Governor, in consultation with the State Racing Commission, “discuss, negotiate in good faith, and reach an agreement with necessary parties regarding providing $500,000 per year” to the host communities. “As of today, more than 950 days after he signed HB 386, he has utterly failed to abide by the law he not only signed twice, but helped write,” she said.

“Despite all the rhetoric and misdirection emanating from the administration, only one person is responsible for securing the money these communities, including Austintown, were promised and that person is Governor John Kasich,” Rep. Lepore-Hagan said.

“The fact is no one pulled the wool over his eyes or inserted the funding into a bill in the dead of night or slipped it past him when he wasn’t paying attention,” she continued. “To the contrary, the governor knew exactly what he was promising because obtaining the funding stream was a critical component of the deal he and his administration negotiated with Penn National that enabled the company to relocate its racetracks to Austintown and Dayton.”

That deal was memorialized in House Bill 386, which established the parameters for relocating Penn National’s tracks—as initially outlined in a February 17, 2012 memorandum of understanding between the company and the administration and also authorized the creation of additional “racinos” at Ohio’s five other existing thoroughbred and harness tracks. The following language from the legislation mandates that the governor take the steps necessary to secure the annual $500,000 payments:

“Section 9. A) As used in this section, "permit holder" and "track" have the same meanings as in Section 7 of this act.

“(B) Within six months of the effective date of this section the Governor, in consultation with the State Racing Commission shall discuss, negotiate in good faith, and reach an agreement with necessary parties regarding providing five hundred thousand dollars per year, with the first payment by December 31, 2014, and annually thereafter, to the municipal corporations or townships receiving moneys from the Racetrack Relocation Fund under division (E)(3) of Section 7 of this act.”

Rep. Lepore-Hagan noted that the Governor “tripled down” on the $500,000 payments the following year when he signed the biennial state budget bill on June 30, 2013. That legislation, HB 59, contained a provision that made the following six racino host communities eligible for the ongoing funding:

• Austintown Township
• The City of Dayton
• Anderson Township in Hamilton County
• Turtlecreek Township in Warren County
• Village of Northfield in Summit County
• Village of North Randall in Cuyahoga County

Although the HB 59 language removed the December 11, 2012 deadline established in HB 386, it did not relieve the governor of his responsibility to enter into and conclude negotiations to obtain the promised funding from the track operators.

Despite having twice assumed responsibility for obtaining the promised funding, the Governor had still not discharged that responsibility as 2014 drew to a close. Reacting to both the governor’s refusal to abide by the law and pleas for the money from local officials who faced increased public safety and infrastructure costs generated by the presence of the racinos, Representative Ron Gerberry of Austintown, then-Representative Peter Stautberg of Anderson Township and State Senator Joe Schiavoni of Mahoning County attempted to secure a small portion of the promised funding for the host communities in their districts through a Senate amendment to HB 494.

Under the provisions of the amendment, Dayton and Austintown would have received three annual payments of $500,000. Penn National, the permit holder of the racinos located in those communities would be responsible for half of the payments. The other half would come from the Casino Operator Settlement Fund. The amendment also removed the requirement that the governor enter into and conclude negotiations for ongoing $500,000 payments. The amended bill passed both houses of the General Assembly and was sent to the governor who then promptly line-item vetoed the amendment.

The governor used the fact that the state was responsible for negotiating $500,000 ongoing annual payments for the six above-referenced communities as his rationale for vetoing the limited payments to Austintown and Dayton. Language from his veto message follows:

“The intent of current law is for the State of Ohio to negotiate with racetrack operators to provide an ongoing revenue stream to the local communities in which they are located. Funds for this revenue stream are intended to come from racetrack operations, not the State of Ohio, which this provision would cause to happen. Furthermore, this provision also deviates from the original intent of current law because it would only provide funds to a third of the communities with a racetrack, while effectively leaving other impacted communities deserving of assistance without funding.”

“It is important to note that the veto message represents the third time the governor has acknowledged responsibility for securing the promised revenue stream for the racino host communities, including Austintown,” Rep. Lepore-Hagan said. “He could have allowed the amendment to become law and relieved himself of the obligation to negotiate an agreement with the operators. He chose instead to maintain that obligation and use it as an excuse to deny funds to Austintown and Dayton.”

“So be it. But now it’s time that he either step up, fulfill his Constitutional duty to abide by the laws of the state and immediately enter into negotiations with Penn National and the other ‘necessary’ parties or include an alternative proposal for providing the promised funds in the state’s budget proposal now being crafted in the General Assembly,” she said emphatically.

“I am eager to work with and support the governor whether he decides to finally abide by the law and secure the payments via negotiations with the track owners or decides to appropriate the funds via legislation,” Rep. Lepore-Hagan said. “But what I and my constituents won’t accept is additional delay because he is unwilling or unable to fulfill a promise he made or discharge a responsibility he willingly and knowingly assumed multiple times.”

“I also want him to know that we are watching closely and will vigorously oppose any legislation that seeks to permanently deny the host communities the funding he promised to provide and that they so desperately need,” she concluded

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