[Southsider2k12]

http://thenewsdispatch.com/main.asp?Sectio...ArticleID=24985

VETO OVERRIDDEN
MICHIGAN CITY - All but one member of the Michigan City Common Council voted to override Mayor Chuck Oberlie's veto of an ordinance that will begin reducing the percentage of riverboat funds the city uses to cover the usual cost of operating expenses beginning in the 2010.

Only Councilman Willie Milsap, D-5th Ward, voted against the override.

Mark Espar, D-2nd Ward, made a long speech about fiscal responsibility and the need to make cuts to the budget.

Oberlie, who chose to attend the Drum Corps International World Championship Open Class Quarterfinals at Ames Field on Tuesday evening rather than the council meeting, predicted the override.

The mayor objected to the ordinance at the July 22 meeting, saying it is the wrong time to do it because the Indiana Department of Local Government Finance is still trying to determine property values back to 2006-07.

Espar called the mayor's objection "all this smoke and all these mirrors." Referring to House Bill 1001, which was designed to reduce property taxes, Espar accused the mayor of saying the city "should not do what the taxpapers, through their elected (state) legislators, say they want."

Council President Robert McKee said he usually agrees with Oberlie on fiscal matters. But he splits with the mayor on this issue.

McKee sees evidence of inefficiency, unproductiveness and waste in city government. He said it is easier to "dip into the riverboat cash jar" than to make changes or to cut waste.

Riverboat money is meant to complete major infrastructure improvements, not for everyday operating costs, he said.

[Southsider2k12]

http://thenewsdispatch.com/main.asp?Sectio...amp;TM=70570.39

The Issue:

Over the years, more was shifted to operating budget.

Our Opinion:

The City Council is wise to cap this spending.
Casino taxes
Originally all went for projects

Editorial

When the riverboat casino first came to Michigan City, the taxes that the casino paid to the city were placed in a separate fund, not to be used for day-to-day operating expenses. That was good public policy, since the casino taxes were "extra" revenue, and city leaders wisely used casino taxes for those "extras" that had been left untended over the years, including major projects like sewer replacement.

The idea was that the casino couldn't be counted on to be permanent, and should it close or the casino business shrink dramatically, the city would be in a financial pickle trying to meet its operating costs.

In recent years, however, as the city's costs escalated for such things as health insurance, utilities and fuel, city government dipped into the casino tax revenues to bolster the operating budget. While that may have appeared necessary, today 45 percent of local casino taxes are diverted from capital projects to the operating fund. That's about $5 million of the $10 million to $11 million the city gets each year from casino taxes.

While the recession and competition from the newer casino across the state line in Michigan have reduced tax revenue here, the casino looks to be as permanent a fixture as any business in the city. Nevertheless, the city has become too dependent on casino taxes for its operations, and the City Council is wise to reduce the maximum amount of casino tax used for operation from 45 percent to 20 percent over the next three years.

Bolstering the operating fund with casino revenue has allowed the city to put off the day of reckoning when it has to reduce its expenditures to meet the realities of today's economy and the ability of taxpayers to fund the level of spending the city once had. That day is here.