Everybody wants a piece of county government's casino action

2013-12-24T00:00:00Z 2013-12-24T09:13:06Z Everybody wants a piece of county government's casino actionBill Dolan bill.dolan@nwi.com, (219) 662-5328 nwitimes.com
December 24, 2013 12:00 am  • 

CROWN POINT | Lake County officials are as generous with their casino revenues as they have to be.

The county has received more than $265 million since the four riverboats in Gary, Hammond and East Chicago dealt their first hands in 1996.

The Ameristar Casino and Hotel in East Chicago, the Horseshoe Casino in Hammond and the two Majestic Star Hotel and Casinos in Gary have added an assessed value of more than $200 million to the county and until recently employed more than 5,000 people, according to the Indiana Gaming Commission.

But the majority of the gaming revenues listed as being distributed to Lake County government doesn't stay local as the state skims more than half off the top.

Porter County doesn't host a casino. Its voters disapproved of the gaming operations in a 1993 referendum.

And LaPorte County is home only to Blue Chip Casino, which has pumped more than $189 million into Michigan City and the rest of that county's local government coffers since 1996.

Dividing it up

Lake county government was in line to receive $17.6 million in riverboat taxes this year alone.

But state law mandates almost $4.4 million of that will be distributed to more than 29,000 Lake County residents in the form of checks of up to $300 under the Lake County Residential Property Tax Credit law.

Gary, Hammond and East Chicago must equally contribute another $4.4 million of their casino funds to that tax credit pot.

The state next forces the county to pony up an additional $3.5 million in casino cash to the Northwest Indiana Regional Development Authority, a group of appointed officials who apportion money to economic development projects such as the Gary/Chicago International Airport.

Then the county must share another $2.9 million to the 15 cities and towns that lack casinos within their borders on a formula based on their populations.

New Chicago Town Councilwoman Sue Pelfrey said the few thousands of dollars they get in casino sharing has been put aside for several years and will contribute to a repaving of Michigan Street in the near future.

That ranges from $500,000 to the town of Griffith all the way down to $3,000 for the small community of Schneider.

Only after these deductions do county government elected officials receive the remainder to spend as they wish.

Bridging the gap

Lake County Councilman Ted Bilski, D-Hobart, said in recent years there hasn't been enough wagering taxes left to invest in long-term transportation or flood-control infrastructure.

"With the trouble we've had over the last several years operating under the frozen levy, no assessed value increases and the tax caps, we reduced normal operating expenses in excess of $20 million and had to fill in with some of that casino revenue to maintain services," he said.

So the County Council earmarked $2.7 million in casino revenues this year for services by Cenifax, the Schererville-based firm that has controlled almost every computer in Lake County government since 1992.

Another $1.5 million went to servicing the county's debt as well as about $121 million in long-term obligations for past improvements to county parks, making older government buildings more energy efficient, buying a police helicopter and securing money to settle lawsuits filed against the county, according to county financial records.

About $1 million in county government casino revenue went to shore up the county's self-insurance fund for employee health costs and $660,541 to repair to county's highways and bridges, county government records show.

The county used $300,000 in casino revenues to offset some of the bills accumulated during the five-week jury trial of Kevin Isom, 46, of Gary, who was convicted and sentenced in March for the murders of his wife and two stepchildren in August 2007.

Another $200,000 will cover the improved sanitation and health care for county jail inmates, as required by a federal consent decree; $40,000 to operate the Hermit's Lake sewage treatment plant southwest of Crown Point; and $40,000 on law books for attorneys.

Freeing up revenue?

Bilski said if the new county income tax generates as much money as some forecast, he would like to see more of the casino revenues going to capital projects and infrastructure.

"We have too many roads in this area that are beyond the point of being patched," Bilski said. "They need to be reconstructed. All those capital plans would be under consideration."

But the full impact of the income tax won't be felt until 2015, and current bills must be paid.

County Councilman Eldon Strong, R-Crown Point, said the county would have more riverboat money to throw at capital projects if it would reduce overspending.

"There obviously are a lot of services we need to provide, and I fully support those. But let's look at the whole picture. There also are some things we need to trim back on. If we weren't spending so much money on everything, we would have spare casino money," Strong said.

Competitive risk

Lake officials acknowledge riverboat money is at risk from increased competition in Illinois, where 65 licensed video gambling locations opened a year ago and are expected to expand to more than 2,000 active video gaming terminals this year.

In LaPorte County, Blue Chip has employed as many as 1,600 workers, paying hundreds of millions of dollars in wages and health benefits to staff members, many of whom have experienced enough economic stability that they have moved from rental units to home ownership, according to an Indiana Gaming Commission evaluation of that casino.

However, declining admissions — induced by an economic downturn — and increased competition have sent casino payrolls to a 15-year low, concluded Ernest Yelton, executive director of the Indiana Gaming Commission, in his 2013 annual report.

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