BANGOR (AP) – Penn National Gaming Inc. is threatening to halt construction on its $131 million Hollywood Slots facility because of a legislative push to increase the state’s take from the slot machines.

Penn National says it could be forced to delay, scale back or even scrap plans to build a gaming and hotel complex if legislators press for a larger share of revenue from the voter-approved slot machines.

“Penn National is not going to assign the (construction contract) until this is resolved,” Hollywood Slots General Manager Jon Johnson told the Bangor Daily News from Penn National’s corporate headquarters in Wyomissing, Pa.

As it stands, the company pays the state a 1 percent tax on money plunked into the slot machines, as well as a 39 percent state tax on the company’s net income and a 3 percent tax to the city. The combination of taxes amounts to 51 cents out of every dollar of Penn’s net revenue, said spokesman Eric Schippers.

Lawmakers on the Appropriations Committee who are trying to balance the state budget are revisiting the formula.

Democrats have suggested doubling the state share of the gross slot machine income from 1 percent to 2 percent while reducing the amount of money set aside for winnings for slot machine players from 93 percent to 92 percent.

Those changes would generate $5.4 million more for the state in the first year of the two-year budget and $8.4 million in the second year.

According to Schippers, an additional 1 percent tax on gross revenues would increase the company’s tax burden from 51 percent of each dollar of net revenue to 61 percent.

“Sixty-one percent would make this business unprofitable,” he said.

Gov. John Baldacci opposes gambling, but his budget proposal leaves intact the income split established in the state’s slot machine law.

There’s a lot riding on Bangor Slots’ expansion, which is supported by the city as well as the harness racing industry and others who get a smaller cuts from slot proceeds.

Plans for the new Hollywood Slots include, among other things, a 116,000-square-foot gaming facility featuring up to 1,500 slot machines, an attached four-story parking garage for 1,500 vehicles and a seven-story hotel. The proposed facility, slated to open in mid-2008, would replace the company’s interim slots parlor, which has 475 machines.

Among those frustrated by the legislative proposal is Cianbro, which says the state is jeopardizing potential investments.

“The biggest crime and the biggest problem that could come out of this is that we will be sending a clear message that in Maine, we don’t keep our word” on economic development projects, said Peter Vigue, president and CEO of the Pittsfield-based Cianbro.

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