Although in the end, the Elgin City Council decided to opt out of the opportunity to allow bars and private clubs to have gambling devices, the decision was not an easy one for them.

The state, ever rapacious when it comes to new revenue, passed a statute which allowed video gambling but gave communities the chance to opt out, or take action to decline this wonderful opportunity to allow gambling to take even more disposable income. Gambling in and of itself is not evil or harmful but the proliferation of gambling can destroy a local economy. Virtually every dime of disposable income will find its way into a slot machine or video poker machine, sending all that revenue to a single source instead of recirculating it through the community.

Deadwood, SD, Cripple Creek, CO. and other communities learned that the hard way. In Deadwood in the 1990s, city officials desperate to revitalize tourism, allowed gambling devices into local businesses with the idea of restoring that old West atmosphere. The result was that nearly every single drug store, restaurant, hardware store and amenity went out of business as it became more profitable to fill the business with slot machines which required virtually no labor, stock or effort. Deadwood now is largely a themed community of small casinos, bars and restaurants. The original town has vanished. Although it may be more prosperous and city coffers more robust, the decision to allow gambling had a direct effect on what kind of community it became.

The secret is balance. A single, central location such as the Grand Victoria becomes a destination for gamblers who seek that experience and then leave. Gambling in bars becomes an addictive local habit which drains revenue from other enterprises and eventually saps the local economy.
While that decision seemed easy, the City Council originally delayed its decision as it explored whether to allow the gambling machines in
private clubs, like the American Legion, Veterans of Foreign Wars and fraternal organizations.

These private clubs were hit hard by the loss of bingo revenue when the casino opened as bingo players fled en masse to the faster action of slot machines and casino gambling. Bingo at the Elgin American Legion not only supported the many fine programs like baseball, boys state and charitable contributions to the community but also created jobs in the kitchen, bar and catering which helped make a robust post. While it is still viable and strong, its ability to support numerous community efforts has been severely curtailed. At one time, bingo made the local post so much money that it contributed a brand new ambulance to the Elgin Fire Department. Those days are gone and privately, the council explored whether it would be possible to allow clubs and organizations only to have video gaming.

The state initially offered to "look the other way" when inquiries were made about that scenario, something the city's legal department was wholly ill at ease about and instead requested a formal legal opinion. That opinion was that the law either applied to everyone or no one and the city could not grant the gambling to some and not others.

Many bar owners who have been smacked with an additional liquor tax as part of Elgin's drive to open new revenue streams to balance the budget, were looking at the revenue gained from video gaming devices as a chance to offset the tax with new money since the state would share revenue with the city and the bar owners.
 
That tax, which will be an accounting nightmare, has gone into effect and is expected to raise a half million dollars. Whether it is a source of declining
revenue much as cigarette taxes have proven to be remains to be seen. Also declining precipitously is the city's portion of money from the Grand Victoria casino which has been dealt a body blow by the opening of the Rivers casino in Des Plaines. That 40 per cent decrease in funds was another reason cited by council members in opting out of the chance to increase gambling in Elgin. It is somewhat doubtful that bar  gambling would have a material effect on the Grand Victoria, a point with which even the operators of the local casino privately agreed.

Lastly, and not least most importantly, an election is upcoming and council members have a heightened awareness of the community's mood and sensibilities. Churches and some social groups privately lobbied certain council members urging them to reject additional gambling on religious, moral or ethical grounds. Council members who face re-election in a tough economic environment fully recognize that these people are motivated voters, not special interest groups.
 
As stated in a previous column, this is the time to decide what kind of community we want this to be and actively seek to make it so. For the next seven months, council members will be wonderfully receptive. Add a comment

Here are a few thoughts from a casual observer.

The announcement that a one-time payment to the city actually resulted in a budget surplus for the last fiscal year does not change the overall dynamics of a structural budget issue. But if there was ever an inconvenient time to receive more money, that was it.
The Elgin City Council had just passed a round of tax and fee increases to cover the projected shortfalls resulting from a double whammy of declining property values and a devastating decline in revenue from the Grand Victoria casino.

As we reported on BocaJump, the state figures show the GVC revenues have fallen off a cliff since the River Casino opened in Des Plaines. Property values in Elgin have declined in some cases as much as 40 percent, less in some areas, which severely impacted the city's primary funding source, property tax revenue.
In order to maintain the city's pristine credit rating, it was necessary to diversify income streams, hence the garbage pick-up fee, liquor taxes, elimination of senior property tax rebates, etc.
Then come an unexpected payment and the city shows a surplus for last year. One-time payments don't solve long-term budget issues, which is why trying to balance the budget by selling excess property or city facilities is disastrously wrong.
But look for the words "tax increases" and "surplus" to loom large in the upcoming municipal election.
As far as budgets go, I know a little about them, having managed a department at the Courier News for 15 years. I won't pretend that experience translates to municipal budgets, but I do know this: it is an immutable truth in every budget in every department of every corporation, municipality or business that department heads either spend the money in their budgets or they lose it next year.
If you have $100,000 left at the end of the year in unspent money because of superior management practices, deferred purchases, open positions or unfilled equipment needs, you will not be rewarded for having saved the company/city money. You will, instead, have $100,000 less in next year's budget. "You didn't spend it this year so you must not need as much."
So to protect the next year's budget, money is spent. It will be Elgin City Manager Sean Stegall's responsibility to be sure department heads are using budget money properly and the council will have to closely monitor through him that department heads are not spending budgeted money to create next year's need. But budgets are a tricky thing to manage because certain costs cannot be accurately estimated, such as overtime for public works, police and fire. Are we going to have three major snowstorms next year?  Four major fires? 
Lastly, Elgin Mayor David Kaptain at a recent Liquor Control Commission meeting suggested using some of the $500,000 expected from the new liquor tax to fund expanded drug abuse prevention programs and roadside safety checks.
Using sin tax revenue to fund programs to prevent those crimes from occurring is a progressive idea.
Except for one thing.
The new taxes and fees were enacted to fund the CURRENT city budget, not enact new programs. Elginites were told the city needed this revenue to maintain services and programs. If the money from these tax hikes is spent to expand or create new spending, support for the council will quickly vanish.
Not a bad idea, just perhaps, not the right time. Add a comment