BANGOR – Penn National Gaming Inc. gave the green light Monday to resume construction on its $131 million gaming and hotel complex on Main Street in Bangor, company spokesman Eric Schippers confirmed.

News that workers will be back at the job site today came shortly after members of the Legislature’s Appropriations Committee killed two proposals to increase the state’s share of revenues from the company’s slot machines as a way to help balance the state budget.

“We are grateful to the Legislature for hearing the concerns that we had about a [higher] tax rate and its effect on [Penn National’s Bangor operations] and the ripple effect it would have had on the economy,” Schippers said early Monday evening.

Penn National now plans to shift its focus to talks with lawmakers aimed at creating a “more stable and predictable environment for our $131 million investment” in Bangor, he said.

Schippers said the company’s decision to resume work on the project was a reflection of the firm’s appreciation for state officials’ willingness to listen to Penn National’s concerns and “a show of good faith.”

Red Webster, senior project manager for general contractor Cianbro Corp., said construction workers would return to the job today.

“We’ve made arrangements to start remobilizing,” he said. “We’re thrilled to resume work.”

Last week’s work stoppage touched off a firestorm that included angry calls and letters to state lawmakers, a pro-project rally at the State House, and a special Saturday workshop at Bangor City Hall, where city officials met with members of their legislative delegation.

Several people, from city and state officials to harness racing supporters and construction company owners, warned that the controversy would have a chilling effect on other companies that might be considering investing in Maine.

In addition, the Bangor Region Chamber of Commerce issued a position statement condemning the attempt to dip further into revenue from Hollywood Slots at Bangor and began circulating a petition to that end.

Though not initially involved in the debate, Gov. John Baldacci late last week joined talks aimed at resuscitating the stalled project.

“I want to thank the leadership in the House and Senate and members of the Bangor delegation for their hard work on this issue,” Baldacci said Monday in a written statement.

“Everyone’s goal all along has been to get people back to work,” the governor said. “That’s going to happen tomorrow. I’m pleased that an agreement has been reached, and I remain optimistic about future talks between Penn National, the Legislature and my office.”

Meanwhile at City Hall, local officials heaved a huge sigh of relief that the project, which they hope will fund a replacement for the aging Bangor Auditorium and Civic Center, was back on.

“The city of Bangor is very pleased about this announcement,” City Council Chairman Richard Greene said Monday night. “This area has experienced over the past few years tremendous economic development and as we all know, last week we were dealt a tremendous blow, not only for this region but for the state as a whole.”

He thanked state and city voters and business leaders for their show of support for the project, now the largest in Maine.

“I want to let everyone across the country know that when Maine makes a deal, we keep our word,” Greene said.

The facility, now under construction and slated to open in mid-2008, would replace the company’s interim slots facility at the former Miller’s Restaurant building, which has 475 machines.

It will include, among other things, a gaming facility with up to 1,500 slot machines as well as a hotel and parking garage.

Under its existing arrangement with the state, the Pennsylvania-based racing and gaming company pays a 1 percent state tax on its gross slot machine revenues, a 39 percent tax on its net revenues and a 3 percent tax on net revenues to the city.

Democrats on the Legislature’s budget panel earlier this month proposed increasing the state’s share of the gross slot machine revenue from 1 percent to 2 percent and reducing the amount of money set aside as the “players’ share,” or the amount of bets that get paid back in winnings, from 93 percent to 92 percent. The proposal would raise an additional $13.8 million for the state over two years.

Republicans on the committee proposed capping at 5 percent a year increases in the allotments to various funds and programs, starting in budget year 2009.

Schippers said last week that 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, rendering the project “unprofitable.”

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