St. Charles, Maryland Heights Prepare For Loss In Casino Revenue
Total revenues at Harrah's and Ameristar are down by only 3 percent, but city officials are planning for larger losses in revenue.
With the recent economic downturn, officials from the cities of St. Charles and Maryland Heights say they are expecting less revenue from state casinos.
Revenues from both Harrah’s Casino in Maryland Heights and Ameristar Casino in St. Charles are down by 3 percent since last year. However, Harrah’s total revenues in July were up by 14 percent and Ameristar’s July revenue increased by 11.7 percent.
To make up for the expected loss in gaming funds, both cities have allocated less money from the gaming tax into this year’s budgets.
Temporary Finance Director for the City of St. Charles Jerry Ponder said, because the city planned ahead, the decrease should have little effect on the City of St. Charles.
“I’ve noticed that the revenue is just a little bit under,” Ponder said. “We’re only down about 4 percent from what we’ve budgeted. It’s down from actual over the last two years. So there is a smaller amount of revenue coming in, but actually, we’ve taken that into consideration because of the economy.”
About 64 percent of the gaming revenue for the City of St. Charles goes into the city’s general fund, Ponder said. Though the lack of revenue may not have a huge impact on St. Charles’ budget this year, a significant decrease in revenue could affect day-to-day operations in the city, he said.
Ponder said the city has also budgeted for a decrease in patrons at the Ameristar next year while the Blanchette Bridge is under construction. Ameristar Regional Public Relations Manager Reggie Dotson said the casino is prepared for this setback.
“The bridge closing will have an effect on our business,” Dotson said. “We can’t determine what effect that will be, but we will get our message across to our customers. We have had bridge closings in the past, and we have experience with getting our customers to the casino.”
Ponder said the city would like to find a more stable source of revenue for the general fund.
“We would like to put more in to capital improvements and not rely this heavily on gaming revenue as a source of general operations,” Ponder said.
In an email, Maryland Heights City Administrator Mark Levin said Maryland Heights is also working to put more money into long-term investments instead of the general fund.
“The long-term trend in reduced gaming revenue, combined with either a reduction or a lack of growth in other revenues, has meant that more gaming revenue has been allocated to ongoing operations and less has been allocated to new capital projects,” Levin said. “I anticipate that this will be the case next year as well.”
Despite the tough economy, officials from Ameristar and Harrah’s remain optimistic.
“The market share numbers would say we are being rewarded for providing a great product and a great service to our guests,” said Eric Proffitt, Vice President of Marketing for Harrah’s Casino.
Officials from both casinos said there have been no major layoffs at their locations. Both Harrah’s and Ameristar are hiring.
Harrah’s will also be opening a new steak house in Maryland Heights.
Where The Gaming Tax Money Goes
Here is a breakdown of how each city spends revenue from the gaming tax. This information can be found in the St. Charles budget and Maryland Heights budget for the year 2011.
City of St. Charles
- General fund: 63.8 percent
- Stormwater: 17.6 percent
- Street Construction: 12.9 percent
- Redevelopment: 3.1 percent
- Major Facilities: 2.6 percent
City of Maryland Heights
- Capital Improvements: 45 percent
- General Fund: 20 percent
- Regional Infrastructure: 17 percent
- Residential Waste Collection: 14 percent
- Parks Fund: 4 percent
Schools Still Skeptical About Prop A
About three years after Proposition A was passed by Missouri voters, officials from local school districts said they still have mixed feelings about the gaming tax.
Proposition A repealed the casino loss limit, a state law that forced individuals to stop gambling after they lose $500. Prop A also created an education fund that would put 19 percent of state casinos’ general revenue into Missouri schools.
Though total gaming proceeds toward education in the state have increased by 3.3 percent this year, some district officials said they do not believe Prop A is helping their schools in St. Charles and Maryland Heights.
Superintendent of St. Charles School District Randall Charles said the revenue generated by Prop A has had little to no effect on St. Charles School District.
“It has not resulted in additional monies to us,” Charles said. “It just helps the state meet its obligation to school districts.”
The St. Charles School District, like many districts in the area, is a “hold-harmless” school district. Hold-harmless means the district receives more money from local taxes than many other districts in the state.
As a result, the state allocates less money to hold-harmless school districts than other Missouri schools. Parkway School District and Pattonville School District in Maryland Heights are also hold-harmless districts.
Chief Financial Officer for Parkway Mark Stockwell said if gaming revenue continues to go down, hold-harmless schools will be taking the cut in state funding.
“They (the state) have a big budget hole to fill,” Stockwell said. “Unless the economy turns around, they’ll be looking for ways to save money on their budget. And the schools are most of the budget.”
Stockwell said though all schools would like to look at the big picture, the measure just isn’t benefiting everyone.
“If they change the school funding formula, there are winners and losers,” Stockwell said. “Every community is taking a look at how it affects them.”