Gaming Tax Revenue Planned for Flood Control, Debt Reduction

Des Plaines will likely receive between $3 and $5 million dollars from Rivers Casino this year and aldermen say they plan to use it for infrastructure improvements and debt reduction in 2013.

The finance and administration committee met last night to formulate a policy that will help guide current and future city administrators and politicians in how revenue generated from Rivers Casino can best be spent. Many stressed that this policy will help Des Plaines avoid mistakes other casino communities made with their revenue, such as spending it on operating costs.

Des Plaines has the tenth and final casino license in the state and earned that in part because it entered a 30-year Business Development Agreement. The agreement stipulates that the state of Illinois gets $10 million of Rivers’ casino revenues. Ten designated communities will share 40 percent of the remaining amount and Des Plaines keeps the rest.

Earlier: 

Rivers Casino pays a gaming tax, which is five percent of its gross receipts, and an admissions tax, which is $1 per person.

Previous estimates show that tens of thousands of visitors frequent Rivers Casino every month and that the casino brought in more than $37 million in profits last month.

While $3 million is a “conservative” estimate, the city will know the exact amount it will receive in August or September, said Acting City Manager Jason Slowinski. Money will be kept in a separate fund and allocated in the 2013 budget.

Many aldermen emphasized the importance of using this money for extracurricular projects and not on operational costs, partly because the amount the city will receive will vary greatly year to year.

Ideas for those projects included improvements to the city’s water system that the . All in attendance agreed that the money should not be spent on personnel salaries.

Aldermen say that that flood mitigation projects top residents’ lists.

This policy will be passed as a resolution, which means it is not a law and can be changed or not followed at will.

Most aldermen emphasized that the policy is a means of government transparency and a way to show residents how the casino money will be spent.

Other communities with casinos did not have a policy in place when their casinos first opened. In the economic downturn and with tighter budgets, some cities started dipping into casino money to fill gaps and cover essential services, Slowinski said. When casino revenues dried up, those towns were in trouble.

Similarly, many of those same towns spent casino money to hire additional police officers and fire fighters. When they saw their casino revenues drop, they were stuck making tough decisions, said 7th Ward Alderman Dan Wilson.

Aldermen supporting the policy said it adds certainty and predictability to the budgeting process.

“This money will not be spent like a 16-year-old with her first checkbook,” said Second Ward Alderman John Robinson.

Fifth Ward Alderman Jim Brookman said he didn’t like the policy because it puts constraints on how the casino money can be spent and Fourth Ward Alderman Dick Sayad said wanted to wait to see how much money the city would receive until any policy was put into place.

“This is a chain around our neck,” Sayad said.

Brookman added that the nature of the policy is “insulting” because it assumes politicians will misspend the money.

The policy as is advocates spending money on new infrastructure, such as flood mitigation projects, but would not allow for the purchase of new equipment, like a fire truck, for example. Brookman said that casino money should be able to be used for one-time expenses.

Aldermen at the meeting said they wanted feedback from residents and agreed to have the policy presented as a resolution at the first city council meeting in June. Two aldermen weren’t present -- Mike Charewicz, eighth ward alderman, and Patricia Haugeberg, first ward alderman. Mayor Martin Moylan was not in attendance.

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