Now you tell us: City Hall says casino revenue won’t solve pension crisis
Casino revenue will cover just 9% of the city’s annual massive pension contribution, WBEZ reports.
Chicagoans have had to swallow more than a few bitter pills on the way to getting aldermanic approval this week for the city’s first casino.
And now comes one more.
As WBEZ’s Becky Vevea and Mariah Woelfel reported this week, the casino revenue will cover just 9% of the city’s annual massive pension contribution.
And that’s 9% at best. As this editorial board stated earlier this week, Bally’s said the casino would generate $200 million toward pension coffers — but is not contractually required by the city to actually deliver that amount.
All the while, Mayor Lori Lightfoot said the yearly cut from the city-owned casino would shore up the municipal police and fire pensions without her having to instead rely on a property tax increase to do it.
But if anyone feels a little hoodwinked right now — and believes that tax hike is coming, even with the casino — we’re right there with you.
‘We’ll still have to find more revenue’
The City Council approved the $1.7 billion casino with a 41-7 vote last Wednesday. The next stop is the Illinois Gaming Board for final approval.
But it’s been a bumpy ride getting here.
A rushed selection process caused much civic concern. So did the fact that many of the residents near each of the three finalist casino sites — including Bally’s winning bid for the Chicago Tribune’s Freedom Center site at Chicago Avenue and Halsted Street— didn’t want gaming in their neighborhoods.
And while Bally’s is described as a “gaming giant,” it’s a largely inherited title. Most of the 14 casinos the company owns nationwide were established and operated by other entities, then later acquired by Bally’s.
The company has never built a casino from the ground up in a market as large as Chicago.
“To pick a team with no experience constructing large, multi-use projects is folly,” Ald. Brian Hopkins (2nd), who voted against the casino proposal, said earlier this month. “This is not a project for beginners.”
All of this contributes to the tornado of question marks whizzing around this deal.
But the financial rewards from the casino would help allay those concerns. At least that’s what City Hall says.
The city’s Chief Financial Officer Jennie Huang Bennett told members of the City Council casino committee that the $200 million helps cover the $2.3 billion yearly pension payment and “reduce the likelihood that the city will need to raise property taxes in the future for pensions.”
But as casino committee chair Ald. Tom Tunney (44th) warned: “Down the road, we’ll still have to find more revenue.”
Benefits yes, but also questions
To be clear, there are other, potentially significant, benefits to having the casino. For one, there’s the thousands of much-needed jobs involved in building and running what City Hall and Bally’s are calling a resort, complete with hotel space, restaurants and entertainment.
Labor strongly backed the casino plan. And under Bally’s agreement with the city, the company promises 60% minority hiring and a jobs program targeting economically disadvantaged neighborhoods.
The casino must deliver on these things, just as much as on the added pension fund payments.
“I’m not patting myself on the back. I’m not doing a victory lap,” Lightfoot said after Wednesday’s City Council vote.
“What I’m saying is that, after 30 years of futility, the men and women of this city will have good-paying jobs that they can build a future on,” she said. “What I’m also saying is that the taxpayers of this city will not have to be called upon again to shore up our police and fire pensions.”
Still, would the casino effort have gone this far, this quickly, if Chicagoans were told from the outset that the end result would be a yearly payment of likely no more than $9 for every $100 needed to pay into the pension funds?
Maybe. Who knows? But it would have been nice to know this crucial fact — and more — up front.
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