ANALYSIS: Cecil County Shouldn’t Count Slots $ Before It’s Hatched
Cecil County commissioners are salivating over the potential revenues that the new Hollywood casino in Perryville will generate and, commissioners hope, save them from having to make tough budget choices this year.
But the state’s projections of upcoming revenues may be overly optimistic, while gas prices and possible local bridge toll increases may dampen revenues at the state’s first slots parlor, located in Cecil County.
At their Tuesday, 2/8/11 work session, Cecil County commissioners considered a laundry list of projects on which to spend the anticipated slots revenue. Commissioners agreed to develop their own rankings of which projects should receive top priorities, including various road and bridge projects and broader initiatives such as economic and tourism development, as well as local school repairs in the western part of Cecil County closest to the casino.
But developing county revenue projections, for both operating budget (day to day costs like snow removal, Sheriff’s patrols, etc.) and capital budget (road and bridge repairs and improvements) stemming from the Perryville operation could be a crapshoot, with fewer odds for fulfillment than a “Sex in the City” video gaming machine.
The Hollywood casino in Perryville has so far generated $35.3 million in total revenues since it opened last fall. The casino operators, Penn National Gaming, received more than $11.6 million of the proceeds. Under the state’s formula for revenue sharing, “local impact grants” from the Perryville facility amount to over $1.9 million, of which 65 percent goes to Cecil County and 35 percent goes to the town of Perryville. (See state report here:
http://slots.mdlottery.com/maryland-casinos-generate-more-than-10-7-million-in-revenue-during-january/
In Governor Martin O’Malley’s newly released budget, it is assumed that local impact aid to Cecil County (including the town of Perryville’s share) will amount to $5.96 million in the upcoming Fiscal 2012 budget year. (See link to the governor’s budget projection here:
http://dbm.maryland.gov/agencies/operbudget/Documents/2012/FY2012BudgetHighlights.pdf
Under the local impact aid sharing formula, that would mean that Cecil County government might receive about $3.87 million from slots operations in the new budget year.
But such state projections do not factor in other policy decisions and economic realities. Due to the state’s budget crisis, there are proposals to raise tolls on the two Susquehanna River bridge crossings—on I95 and the Hatem Bridge— that would bring gamblers from the Western Shore to Cecil County. And gasoline prices have been rising steadily in recent months, potentially deterring visitors to Perryville and diverting gamblers to more attractive venues in Charlestown, W.Va. and Delaware, where there are already table gambling games and not just the video slots machines allowed in Perryville.
In an interview with Cecil Times, Craig Whiteford, Cecil County’s budget director, said it is a very difficult task to try to figure out just what revenues the county will receive in Fiscal 2012 from gaming.
“It’s hard to predict,” he said. Since this is the first year of the new slots program, there are no precedents to rely upon. “There are a lot of variables,” he said. Whiteford said he wants to take a very fiscally conservative approach to the revenues, and at this time there is also no way of knowing how the county commissioners want to allocate the revenues to operating expenses or long-term capital budget improvements, such as road repairs.
County Commissioner Tari Moore (R-2), who is the commissioners’ liaison to the Local Development Council that will recommend how to spend casino revenues, has been working to draft a wish-list of projects to utilize the gaming revenues, within the mandates of the state law that governs how to spend local “impact aid” from the casino.
Moore presented a draft list to fellow commissioners on Tuesday, asking them to respond with their own rankings so the commissioners can set their priorities by next week. Foremost among the 44 listed items are infrastructure improvements to local roads and bridges in the Perryville area near the new casino. The overall costs amount to $26 million over the next five years, or much more than current projections of the county’s local impact aid share.
Moore emphasized that the wish list was just that—and that Commissioners and local citizens should weigh in with their own recommendations and priorities so that limited funds might be utilized for the greatest public good.
She also drafted a grant application for community groups or non-profits that serve the impact area to seek aid, within the legal boundaries set by the slots law. The application form cites the slots law in limiting impact funds to projects that relate to “infrastructure improvement, facilities, public safety, sanitation, economic and community development.” The local impact area is generally defined as parts of the county from the Susquehanna River to Route 272.
