by Cody on July 14, 2020

Michigan City takes financial stock due to casino revenue dependance

The City Council is planning to look at the ramifications of not relying on casino revenue for operational costs. The president of the council, Sean Fitzpatrick, D-4th, proposed a resolution aimed at rebuilding the city’s rainy day fund to a minimum of $6 million by using no more than 5% of the city’s casino revenue for routine operating expenses, starting no earlier than 2021 because the list right now is a whole 20%. The City Council president spoke about this subject and said: “We spent it all on operations and stuff. It’s not there when we need it. If we have zero riverboat (casino revenue), I don’t know what we’d do at this point,” Fitzpatrick said.

Another city official, Councilman Bryant Dabney, D-1st who is also the chairman of the council’s finance committee also spoke about this. And he is sure that this is a bad financial move for the city itself. That is because the city would need to cut its operating budget by $4.5 million, which will be very hard according to him. “You’re talking about heads, you’re talking about people, you’re talking about services,” Dabney said.

On top of the impact of the casino having been closed, the city’s property tax revenue is about $2 million short which also creates additional problems and complications. And according to Councilman Gene Simons, if the casinos were to close again that would be devastating for the city’s finances because now the city casinos are on a verge of another possible COVID shutdown.

According to Fitzpatrick a “lack of preparedness for the COVID-19 pandemic” is definitely an important problem for the city. If the casino revenue were used as a supplement for one-time expenditures, rather than continuing costs, the city would be in a better financial position, he said

But Dabney does not count this situation as unprecedented as it is quite similar to the setback during the Great Recession in 2007 and 2008. “I do understand the intent,” Dabney said, but the timing is awkward.

But at the same time, some people, like Councilman Don Przybylinski, who is a D-At-Large need more facts and figures noting the police chief said earlier in the morning that the department could use more officers. “We need to know the facts, the figures, of what’s going on,” he said.

“Are we just putting off difficult budgetary consideration?” asked Councilman Michael Mack, D-3rd. “If you have a little bit of coin in your pocket, you’re always going to spend it. Always.”

Councilwoman Dalia Zygas, D-At-Large, suggested preparing a list of potential budget cuts that could help sort things out a bit.

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