Time to Protect Casino Revenues
Friday, June 1, 2012
No matter what side of the casino equation you’re on – for or against them – as long as Rivers Casino remains highly profitable, millions of new dollars will flow into Des Plaines’ city treasury every year. How much money depends on how well the “riverboat” operation is run, which by all accounts is very well, and on future action by the state legislature.
Lawmakers are currently in the midst of wrestling with economic issues of epic proportions ranging from pension and Medicaid reform to casino expansion. We should know in a day or two whether the number of casinos in the state – capped several years ago at 10 – will be increase to as many as 15. The controversial bill also calls for allowing slot machines at the state’s six horse race tracks.
Should any part of the bill pass, it will have a profound effect on Rivers Casino’s ability to continue to make a big profit. Since it’s opening last year, it has regularly been the No. 1 casino in the state profitwise. Allowing more casinos and slots at race tracks will unquestionably cut into Rivers’ ability to make money and that in turn will cut into Des Plaines’ take of the 5% host community Wagering Tax and $1 per person Admissions Tax. All indications point to the belief that when the year ends and the city has to pay the state $10 million from casino tax income following by 40% of what’s left to 10 disadvantaged communities, Des Plaines will be left with about $4 million. Proposed legislation could dramatically alter that formula resulting in a more favorable funding picture for the city or dilute the ability of all 10 casinos to rack up big profits as competition increases. We’ll have to wait and see what happens.
For the last year, Des Plaines officials, led by Mayor Marty Moylan and Finance Committee chairman Ald. Matt Bogusz (3d), have been crafting a proposed city policy that would establish firm rules on how that $4 million should be spent starting Jan 1, 2013 and beyond. Because of the instability of casino revenue, such a policy makes sense. For two years, many aldermen have advocated spending that newfound cash only on “one time” items such as street, sidewalk, and anti-flooding sewer improvements. Allocating those funds to things like employee salaries and pet projects is too risky, they say. We agree.
As reported in this Wednesday’s Des Plaines edition of the Journal & Topics Newspapers and in March, a formal proposal is before aldermen to establish a firm policy earmarking casino money only for specific projects such as infrastructure improvements and paying off the city’s still high debt. City council will consider this policy at its next regular meeting on Monday, June 4.
What aldermen have yet to do is engage in a serious public debate on the proposal championed by Bogusz and Moylan and then state clearly their opinions.
We believe the foundation of the proposal is sound. Through honest, concentrated debate a good, city policy can be adopted for now and for years to come. Those currently serving on city council, including the mayor, will all be replaced some day. Term limits and time guarantee that. The next city election is in the spring of 2013. Half of city council could be replaced by then and by 2015, the elected board may have all new faces.
City leaders need to take the appropriate steps to protect the integrity of future casino revenue and to assume that the city’s financial picture remains sound.
The time to do so is now.