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TO: Aurora City Council
FROM: Mayor Thomas J. Weisner
DATE: November 6, 2015
SUBJECT:
A Resolution Requesting the State of Illinois to Remit Riverboat Gaming Tax Proceeds to the City of Aurora.
PURPOSE:
To obtain the approval of the City Council of a proposed resolution calling for the State of Illinois to remit riverboat gaming tax proceeds.
BACKGROUND:
The City of Aurora has received a share of riverboat gaming taxes associated with the operation of the Hollywood Casino in Aurora since the casino opened in 1993. The tax revenues distributed to Aurora and other selected river cities in Illinois have included a $1 per head admissions tax and a 5% wagering tax.
Over the years, the city has generally applied riverboat gaming revenues for the abatement of general obligation debt service, economic development initiatives, and support of cultural, recreational, educational, and social programs in the community. In 2002, the city received a total of $16.3 million of gaming tax monies. A variety of a factors have caused gaming tax revenues to decline to about $7.2 million annually. These factors have included changes in gaming tax laws and the proliferation of gaming facilities in the state.
DISCUSSION:
As gaming tax revenues have declined over the years, the city has rigorously prioritized the needs of the community. Purposes and entities that received gaming tax revenues have seen their portions reduced or eliminated entirely in recent years. Currently, gaming tax revenues are applied only to needs of the highest priority.
Pursuant to the budget battles that have been in progress at the state level, the city has received no gaming tax money since July 1, 2015. The gaming tax revenue withheld by the state for the months of July through October 2015 amounts to $2,333,026. These are monies that the state has already collected but has simply opted to withhold. As a result, the funding for city programs whose support is dependent upon gaming tax revenues has been severely curtailed.
The attached, proposed resolution would request that the State of Illinois release to the city the riverboat gaming revenues it is owed. We do not believe that river cities should be a casualty of a problematic state budget situation that we did not cause and that we should not be responsible for resolving.
RECOMMENDATION:
That the City Council approve the attached, proposed resolution calling for the State of Illinois to remit riverboat gaming tax proceeds.
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Requesting the State of Illinois to Remit Riverboat Gaming Tax Proceeds to the City of Aurora.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City Council of the City of Aurora is required to annually adopt a balanced budget before the end of its fiscal year on December 31st in accordance with the provisions of Section 8-2-9.4 of the Illinois Municipal Code (65 ILCS 5/8-2-9.4); and
WHEREAS, the Governor of the State of Illinois determined in July that the State, in the absence of an adopted budget, does not have the authority to distribute the tax revenue collected in accordance with the Riverboat Gambling Act (230 ILCS 10/1) to eligible Illinois municipalities such as the City of Aurora; and
WHEREAS, the annual tax revenue the City of Aurora derives from the Riverboat Gambling Act is critical to the City of Aurora’s ability to present a balanced, annual budget and is used to fund social services, public safety, roadway construction and economic development projects; and
WHEREAS, as of the effective date of this resolution, the City of Aurora is entitled to an estimated $$2,333,026 in Riverboat Gambling Act tax revenue that has not been remitted by the State and is entitled to receive approximately $7.2 million in such tax revenue in 2016; and
WHEREAS, the Riverboat Gambling Act imposes both an "admission tax" and a "wagering tax" on persons engaged in the business of conducting riverboat gambling operations; and
WHEREAS, Section 12(b) of the Riverboat Gambling Act (230 ILCS 10/12(b)) establishes the tax revenue the City of Aurora shall receive from the “admission tax” and states, in pertinent part, that:
[A] municipality shall receive from the State $1 for each person embarking on a riverboat docked within the municipality, and a county shall receive $1 for each person embarking on a riverboat docked within the county but outside the boundaries of any municipality. The municipality's or county's share shall be collected by the Board on behalf of the State and remitted quarterly by the State, subject to appropriation, to the treasurer of the unit of local government for deposit in the general fund.
WHEREAS, Section 13 of the Riverboat Gambling Act (230 ILCS 10/13) establishes a “wagering tax” and states, in pertinent part, that City of Aurora shall receive such tax revenue:
[F]rom the tax revenue deposited in the State Gaming Fund pursuant to riverboat gambling operations conducted by a licensed manager on behalf of the State, an amount equal to 5% of adjusted gross receipts generated pursuant to those riverboat gambling operations shall be paid monthly, subject to appropriation by the General Assembly, to the unit of local government that is designated as the home dock of the riverboat upon which those riverboat gambling operations are conducted.
WHEREAS, the City Council of the City of Aurora urges the State of Illinois to comply with the provisions of Sections 12(b) and 13 of the Riverboat Gambling Act and remit to the City of Aurora the tax revenue it is entitled to receive from the Riverboat Gambling Act’s admission tax and wagering tax to ensure that the City of Aurora’s residents and businesses are not harmed by the State’s failure to comply with the law; and
WHEREAS, the City Council of the City of Aurora hereby declares that both the public interest and the effective administration and operation of the City of Aurora are adversely affected by the uncertainty relating to the Riverboat Gambling Act tax revenues being withheld by the State that the City of Aurora is otherwise entitled to receive.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, that the City Council authorizes the Corporation Counsel to take any and all other action necessary to obtain the City’s portion of the riverboat admissions tax and wagering tax.
BE IT FURTHER RESOLVED that this authorizing resolution is intended to settle and to afford relief from the financial uncertainty related to failure by the State of Illinois to remit Riverboat Gambling Act tax revenue and, therefore, is to be liberally construed and administered.