Sometime in the next eight months, the City of Des Plaines is going to be able to reach into its coffers for the first time to spend gaming tax revenue from Rivers Casino. Opinions vary among aldermen about how to allocate the new revenue stream. At the same time, other communities with casinos consider similar choices.
At a Finance Committee meeting on March 29, aldermen disagreed about the parameters and need for a revenue spending policy presented by Third Ward Alderman Matt Bogusz.
Bogusz, chairman of the committee, proposed a policy that would allow Rivers Casino money to be spent on debt pay-down, infrastructure projects and lobbying costs associated with the casino. As the policy stands, money could not be used for one-time purchases such as a new fire truck.
Some aldermen said one-time costs should be allowed under the policy, and others said the policy is unnecessary.
“This is a chain around our necks,” Fourth Ward Alderman Dick Sayad said at the finance committee meeting.
Sayad’s meeting for Fourth Ward residents on April 10 drew more than 170 people, and, among other topics, they discussed casino revenues, Journal & Topics Newspapers reported.
Des Plaines attracted its casino license from the state, in part, because it entered a 30-year business development agreement, which stipulates the state of Illinois receive $10 million of gaming tax revenues from Rivers Casino annually. Another 10 communities share 40 percent of the remaining amount, and Des Plaines receives the rest.
At the finance committee meeting, Sixth Ward Alderman Mark Walsten said the city should wait one full year before establishing a policy. At the same time, he said, he supported using the money for infrastructure costs and for paying down debt.
“That’s what I’ve been talking about for five years,” Walsten said.
Opinions about spending casino revenue vary among the communities that host the gambling establishments as well.
Harrah’s Casino on Joliet
Joliet, south of Des Plaines, was one of the fastest-growing cities in the 1990’s, and saw a dramatic decrease in casino and city revenues. Since the early 2000’s, the amount of city staff and services has been steadily decreasing, said Ken Mihelich, director of management and budget.
Mihelich said Joliet started using casino money for operational costs in the early 2000’s, but that really ramped up in about 2008 when the nationwide economic situation took a turn for the worst. He said casino revenue has decreased more than 40 percent since 2007. In 2007, the city received $37 million from casino revenues, and now receives about $20 million.
“It became necessary to use these funds for operational costs,” Mihelich said.
Mihelich said while the amount the city receives from the casino each year does vary, they use projections in budgets to plan accordingly. As the financial situation improves, Mihelich said he hopes the city moves away from using casino money for operational costs.
“We have gaming revenues but our problems aren’t a whole lot different from other towns,” he said.
Harrah’s has also seen numbers drop because of Rivers Casino, he said.
Hollywood Casino in Aurora
Southwest of Des Plaines, Hollywood Casino in Aurora generated about $16 million annually for the city since opening in 1993, said Brian Caputo, chief financial officer for the city. Since the recession and 2008 smoking ban revenues have dropped to about $10 million, he said.
Revenues have been used to pay down debt and TIF costs, to purchase land, and for one-time purchases for the police and fire departments, but have never funded operational costs, Caputo said.
Grand Victoria in Elgin
Neither Joliet nor Aurora have a formal policy in place as to how casino revenues can be used. Elgin, though, has a resolution similar to the one proposed in Des Plaines.
The city goes through a comprehensive and strategic planning process every five years and its resolution guiding how casino funds will be used is renewed every year, said Sean Stegall, city manager for Elgin.
Elgin also uses funds for one-time uses but not operational costs, Stegall said. Much of the money has gone toward street repairs and improvements, which have been affected by reduced revenues in the last few years, he said.
“We can’t make improvements as rapidly as before,” Stegall said.