Rushville Republican

April 22, 2013

Pavey, Leising discuss casino revenues

Melissa Conrad
Rushville Republican

RUSHVILLE — During a recent dinner, Rushville Mayor Mike Pavey and Indiana Senator Jean Leising began a discussion on casino revenues and how proceeds are reinvested, or not, back into area communities. Their discussion raised numerous questions and concerns for some areas, particularly Rush County, and an on-going correspondence between the two sheds more light on legislation involving gaming revenues.

Pavey writes in reference to Senate Bill 528, in part:

“Senator Leising, I have read numerous stories about the plight of the gaming communities and those communities that receive significant gaming revenues. I can’t say that I have a whole lot of sympathy in this situation. My community is being butchered in the economic and quality of life arenas as a result of the disproportionate distributions of these funds.

“Imagine my surprise when I was researching my stance on this topic when I discovered that 49 cents of every $10 bet goes to fund Build Indiana Funds (BIF). Rushville is a $2.8M BIF winning community. Even more ironic, $2.55M is yet unfunded. The present BIF process fund MVH and Infrastructure projects. The City of Rushville appealed its case to the State of Indiana and they then directed us to the City of Lawrenceburg Foundation Grant program. Two separate city administrations have approached Lawrenceburg to no avail.

“My administration approached both Lawrenceburg and Shelbyville for an opportunity to compete for one of their communities gaming funded grants.

Shelbyville was at least cordial enough to respond with an email that stated that we did not qualify for their grant program. Lawrenceburg did not even have the courtesy to supply us with a written rejection letter after verbally promising to send one multiple times.

“So you can imagine my lack of sympathy for those communities that have access to these monies. It is a huge competitive disadvantage when my county is surrounded, on three sides, by counties that get a disproportionately higher amount of gaming money than my county. To my west is a city and county that share none of their roughly $4M per year in gaming money. To my south and east are two of the 10 counties that share in the Lawrenceburg’s Foundation Grants of $57M per year. The most touted awardee was Decatur County who received $10M grant that allowed their community the ability to purchase and gift the land used to entice Honda to Greensburg.

“Another community had the ability to build a new county jail without even taking out a loan. Vevay is touted as the smallest county in the country to have a full service YMCA for its population of approximately 1,600. One county built a 24,000 square foot community learning center. Even as revenues are showing signs of decline, Rising Sun broke ground on a new hotel, while Lawrenceburg is building a $50M events center and hotel. Rushville has not been able to benefit from any of these monies, has not been able to complete funding on a grant received over 12 years ago and the counties who have received these monies are who we directly compete against for economic viability.”

Pavey’s letter to Sen. Leising goes onto to outline discrepancies and how revenues agreements in Indiana are inconsistent with one another.

He says: “To this day, I am puzzled how to explain to those who are curious how gaming revenue agreements were formulated. How does one revenue agreement include no neighboring county while another includes three counties? Yet another includes a ‘grant’ program that includes ten counties. And what was the criterion for selection of counties that were included? It clearly was not based on need.”

Pavey calls for an overhaul of a system of agreements that determine how future funding would be distributed, saying: “To those communities on the outside who can only look in, it appears the main argument for the current structure for distribution of funds to remain in its current structure is that are they are used to it and don’t want to have to do without it. Some have voiced concern over the fact they have built projects that they can’t maintain without continued funding.

“These are monies that were to be used for self-sufficient economic development projects. These projects by now should have strengthened the competitiveness of the community without relying on gaming funds. Many have now admitted the money was not always well-targeted. The Lawrenceburg

Foundation Grant has become the source of controversy and investigation. The warning signs are there.

“I am in favor of eliminating all prior agreements and redesigning it into a structure that is equitable to all communities. It is obvious to the most casual observer that there is a hodge-podge of inequitable agreements statewide (I only addressed the southeastern region). We know it is broken; why not fix it?”

Senator Leising responded this week to Mayor Pavey’s letter, writing:

“Dear Mayor Pavey,

“I understand your frustration in regard to the distribution of gaming revenue. However, the state has not interfered previously with the riverboat casino local development agreements. These agreements do vary widely between casino owners and local units and foundations.

“Lawrenceburg and Dearborn County seem to have negotiated the best local agreement in the state. They received approximately $57 million last year.  Several years ago, Lawrenceburg entered into a 10 county sharing agreement. As a result, you have seen neighboring counties like Decatur, Franklin and Fayette receive grants.

“In 2012, the Lawrenceburg City Council passed a new ordinance concerning its Lawrenceburg Regional Economic Grant Program. The purpose of the Grant Program is to promote economic development in the 10 county area.

“There are seven members on the committee. The Mayor of Lawrenceburg appoints four members including the utility director, the clerk treasurer and two homeowners. The Governor appoints one, as does the Lawrenceburg City Council. The Director of the Indiana Economic Development Corporation also appoints one member. The committee reviews all applications in executive sessions.

“Counties that are not sharing from a riverboat county do receive a small amount of revenue from the Non-riverboat County Fund.

“Senate Bill 528, the gaming bill this session, has had two hearings each in the Senate and the House with public testimony, debate and amendments. While the Senate has passed the bill, it is pending action in the House.

“This bill will likely go to a conference committee where two senators and two representatives of both parties will work out the differences between the two versions of the bill.  You may have an opportunity to testify before the conference committee to express your frustration as a non-riverboat county.

“Senate Bill 528 currently includes a requirement that local development agreement reports must be made available through the Indiana transparency web site for local government. I believe this will create a more open process for everyone interested in the riverboat granting program.

“I would recommend two things for you to consider. First, I would plan to testify before any conference committee scheduled on Senate Bill 528. Second, I would request time to appear before the Lawrenceburg City Council and/or the Lawrenceburg Regional Economic Grant Program to request consideration as an eleventh county.

“Thanks for standing up for your community. I am not certain how the original ten counties were selected, but perhaps your county could be added as a sharing county.”

Mayor Pavey’s questions and concerns shed some light on the economic development implications of a slanted playing field in regional efforts and in funding projects here at home.

Contact: Melissa Conrad @ 765-932-2222 x107