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Gambling license fees should not be lowered at a time when maintaining public safety staffing is tenuous

Over $126 million was gambled and over $32 million was lost to gambling at 90 establishments in Decatur between March 2019 – February 2020.  At its next meeting on December 21, the Decatur City Council will be discussing whether to lower the annual per machine fee that establishments pay in order to have video gambling or to have the current fee split between the establishment and machine owners.  At the same meeting, the council will be discussing options for finding additional revenue to maintain current public safety staffing and funding pensions at the 100% level including a new public safety tax. 

These issues are two of 14 agenda items and 26 consent calendar items that the city council will be discussing in its final meeting of the year.  Other items of note include voting on an agreement with MV Transportation for the management and operation of Decatur Public Transit Services, a final agreement associated with the closing out of the Southeast Plaza TIF, and the annexation of over 30 properties that are surrounded by the city limits or are adjacent to the city limits and use city water service. 

GAMBLING IN DECATUR IS A $100+ MILLION INDUSTRY

Between March 2019-February 2020, $126.9 million was gambled and citizens lost $32.4 million.  The median amount all citizens lost per gambling establishment was $319,000.  The gambling industry in Decatur also has exhibited significant growth.  Compared to March 2018-February 2019, the number of gambling establishments, number of gambling machines, and gambling losses by all citizens combined have increased.

The gambling industry in Decatur may be one of the fastest growing industries in our city, and thus, the arguments for the reduction of fees or splitting of fees among owners of the machines and establishments are unclear.  The negative impacts of gambling including crime, addiction, and bankruptcy have yet to be quantified in Decatur and it is unknown whether the tax revenue the city receives from gambling offsets the costs.  Furthermore, given the critical need for revenue for public safety staffing, neighborhood revitalization, economic development, and job growth, the most appropriate option is to leave the fee for a video gambling license at $500 per machine per year for the establishment and to increase the fee for owners of the machines from $0 to $500 per machine per year.  With 485 gambling machines in Decatur as of February 2020, this would result in $242,500 in additional revenue annually. 

Earlier in the pandemic, the city council voted to increase building permit fees.  Thus, those that invest in their homes whether it be an indoor remodeling project or an exterior improvement will pay the city more money for investing in where they live.  There is little if any evidence that the video gambling industry is a net benefit to the city and its citizens.  There is also little if any evidence that the current fees or additional fees will have any measurable impact to the gambling industry.  Since the city council voted to increase the per machine fee to $500 a couple of years ago, the number of gambling establishments, machines, and losses by citizens have all increased. 

A NEW PUBLIC SAFETY TAX IS UNNECESSARY

The Decatur City Council will also be discussing options for generating additional revenue for public safety staffing and pensions including a public safety tax.  Such a tax is unnecessary. 

As described above, by increasing license fees for video gambling machines by $500 per year the city would raise $242,500 annually.  The city of Decatur estimated the revenue of sales from cannabis products at $206,000 - $360,000 annually, and given the state’s sales revenue to date, it is reasonable to assume the higher estimate.  Furthermore, revenues can be generated through increased retail opportunities.   Additional retail options will help reduce the retail leakage the city is experiencing, currently estimated at $387.8 million at establishments within 10 miles outside of Decatur (the city receives ~2.5% sales tax on retail sales).  Finally, continued annexation of properties and the associated property taxes will offset rising pension costs that are primarily paid through property taxes. 

CITIZENS ARE ENCOURAGED TO PROVIDE FEEDBACK TO CITY COUNCIL MEMBERS

If you would like to discuss this or any other issue with a city council member, phone numbers and e-mail addresses for each council member can be found at the following link: https://www.decaturil.gov/mayor-and-council/council/. 

PLEASE EXPRESS YOUR VIEWS AT CITY COUNCIL MEETINGS

Meetings take place at the Theater located on the second floor of the Decatur Civic Center (1 Gary K. Anderson Place).  Free parking is available in the lot immediately south of the entrance.  Citizens are encouraged to attend meetings and express their views.  Citizens are allotted 3 minutes per person near the beginning of each city council meeting.  In addition, citizens can provide comments regarding one regular agenda item per meeting for up to three minutes provided they notify the city in advance (and prior to the start of the meeting).  You can request to speak on a particular agenda item at a council meeting by filling out an on-line form at: https://www.decaturil.gov/mayor-and-council/advance-request-to-speak-at-council-meeting/. 

AGENDAS FOR CITY COUNCIL MEETINGS ARE AVAILABLE ONLINE

An agenda and information about each agenda item for each city council meeting can be found at: https://www.decaturil.gov/mayor-and-council/council-meetings/.


Horn for Decatur
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