NWI casino city mayors keeping eye on spending as COVID-19 shutdowns continue

Monday 13th April 2020

× 1 of 4 Matt Sharp

East Chicago Mayor Anthony Copeland

Kale Wilk, file, The Times

Hammond Mayor Thomas McDermott Jr.

Kale Wilk, file, The Times

Gary Mayor Jerome Prince

John J. Watkins, file, The Times

The state-mandated closure of Northwest Indiana's casinos to minimize the potential spread of COVID-19 is prompting the mayors of Lake County casino cities to more closely scrutinize their spending as the shutdown drags into a fourth week.

State records show the city of Hammond last year collected $33.5 million in gaming taxes and related revenue, the city of East Chicago $17.3 million and the city of Gary approximately $6 million.

While Hammond Mayor Thomas McDermott Jr., East Chicago Mayor Anthony Copeland and Gary Mayor Jerome Prince all agreed the loss of a single month of gaming revenue won't break their budgets, it's the combination of the unknown duration of the casino shutdown and the soaring unemployment caused by the coronavirus that has them concerned about the future.

"I pray on bended knee that the industry will come back," Copeland said. "But I'm far from foolish. I know that if they cranked up tomorrow, it still would take months and months before people that have been affected across the nation who go to these properties will have disposable income.

'Steep and rapid' state revenue drop begins due to coronavirus mitigation efforts

"So this is going to be more than a minute, and I realize that."

Copeland said East Chicago today is in far better financial shape compared to when he took office nine years ago and the city was using about $13 million a year in gaming revenue to shore up its badly out-of-balance general fund.

Copeland said East Chicago now has a $24 million general fund reserve and its gaming revenue primarily is used to leverage additional state or federal money for infrastructure and quality of life projects.

"We have been able to make great strides," Copeland said. "If the city of East Chicago continues to be frugal -- not stingy -- then we'll be able to get over this crisis."

Copeland said he's also proud of East Chicago's relationship with Ameristar Casino and eagerly agreed last month when the casino asked to postpone a monthly payment to the city so the casino could meet payroll following the shutdown.

"Either I can eat the goose and have one glorious meal or I can keep feeding it and hope it lays another golden egg," Copeland said. "I think the city of East Chicago will weather the storm."

Forced shutdown craters Northwest Indiana casino revenue

Meanwhile, in Hammond, McDermott issued an executive order immediately following the Horseshoe Casino closure halting all spending on new infrastructure projects funded by gaming revenue.

"2020 is not going to be a big construction year in the city of Hammond. We had a number of projects that were heading through the chute, and we put them on hold," McDermott said. "The only projects that are going forward are the ones that we already appropriated."

"If we lose one year because of this epidemic then we lose one year. But we've got to make sure our budget doesn't get destroyed."

McDermott said he never wants to be in a situation, as Hammond has been in the past, where changing economic conditions that demanded immediate spending cuts instead were postponed in the hope things would improve the next year.

"We're being very cautious with our gaming revenue," McDermott said. "Right now, I haven't furloughed or laid any of our employees off, and I'm hoping I don't have to do that."

Gary's mayor, who only took office in January, said he's still trying to get a grip on the city's finances after several previous administrations postponed hard spending decisions that needed to be made in the face of sharply declining city revenue.

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Prince said once he figures his way past Gary's historic accounting practices and improves its antiquated budgeting technology, he plans to carefully review all city spending and sources of revenue, including its receipts from the Majestic Star casinos.

"My finances were strained anyway. So I'm not quite sure what the future is going to look like in terms of manpower," Prince said.

"We're certainly going to realize areas where we can create more efficiencies. I think you should be looking for it, right, in a situation like this, if for no other reason than to be prepared for the future."

5,000 workers furloughed as coronavirus busts casinos

In LaPorte County, Michigan City Mayor Duane Parry has imposed a hiring freeze and barred department heads from spending more than $1,000 without his written approval, since approximately half the city's budget is funded using revenue from the Blue Chip Casino.

Parry said Michigan City has sufficient cash reserves in the near-term to weather the casino shutdown, but he's hoping things will return to normal by summer when thousands of tourists typically visit the lakefront community.

Revenue sharing agreements mandated by state law also send Northwest Indiana casino revenue to nearly every non-casino municipality in the Region.

Coronavirus forces furlough of Ameristar Casino employees

However, none is believed to be dependent on the few thousand dollars a year each receives from revenue sharing.

As of Saturday, nearly all of the approximately 5,000 workers employed by Northwest Indiana casinos are on furlough -- and no longer receiving a paycheck -- due to the casino shutdown caused by the coronavirus pandemic.

Gallery: Once-bustling Region sites empty as COVID-19 infects NWI Crown Point Square Largely deserted by the Old Courthouse, Crown Point Central Park Plaza Valparaiso Lake County Government Center in Crown Point Downtown Chesterton Downtown Valparaiso U.S. 30 in Schererville Downtown Valparaiso Valplayso in Valparaiso Westchester Public Library in Chesterton Ghost town No thru traffic Closed for business Gallery Main Street in Hobart Broadway in Gary Lake Station IUN Gary's Broadway Highland's Highway Avenue Shops on Main Indiana stay-at-home Growlers Special delivery Best Buy Indiana stay-at-home Indiana stay-at-home Indiana stay-at-home Indiana stay-at-home Indiana stay-at-home Indiana stay-at-home Indiana stay-at-home Indiana stay-at-home Indiana stay-at-home Indiana stay-at-home Indiana stay-at-home Indiana stay-at-home Indiana stay-at-home Tags Indiana Business Local-government State-government Local-politics Coronavirus Covid-19 Casinos Gaming Gaming Revenue Casino Revenue Tax Revenue Casino Taxes Budget City Budget Hammond East Chicago Gary Thomas Mcdermott Jr Anthony Copeland Jerome Prince Recession Economic Conditions Ameristar Casino Horseshoe Casino Majestic Star Casino Budget Reserve Infrastructure Construction Economic Development City Employees Layoffs Spending Cuts Furloughs Government Efficiency Michigan City Duane Parry Tourism Employment Unemployment Furlough Politics Mayor Casino Revenue Finance Economics Accounting Thomas Mcdermott Jr. * I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy. Dan Carden

Chief Political Reporter

Dan has reported on Indiana state government for The Times since 2009. He also covers casinos, campaigns and corruption.

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