Lew Levin, right, chief financial officer for the Unified Government, presented a chart showing how much money in casino gaming tax revenues the UG would receive. The chart estimates that the UG would receive $4.5 million in 2013, $6.2 million in 2014 and $6.5 million in 2015. (Staff photo)

   After years of cutting the budget, the Unified Government Commission was more hopeful on Thursday while discussing new casino revenues.

   UG officials estimated the amount of gaming tax the UG is to receive under state law at about $3.7 million this year. The new Hollywood Casino at Kansas Speedway will open at 11:45 a.m. Friday, Feb. 3, to the public. It is at I-70 and I-435 in Kansas City, Kan.

   There are several other areas where the local community will receive funding from the casino.

   Additional contributions were negotiated with the casino for the community, said UG Administrator Dennis Hays. The community benefit will amount to millions of dollars above what was required by the state, beginning in 2013, he said.

   Already, UG officials said they are getting calls from charities about donations, and UG officials are telling them to wait until the next budget year. Charities and social services, to be selected by the UG, are designated to receive $500,000 starting in 2013 under a development agreement made between the UG and the casino.

   Also as part of the agreement between the UG and the casino, the UG Parks and Recreation Department is to receive $100,000, and the Convention and Visitors Bureau $25,000. The local chambers of commerce will receive smaller amounts.

   One of the questions Mayor Joe Reardon said he wanted the commissioners to think about was whether they were going to use the $100,000 for existing parks and recreation expenses, or to use it for some new parks and recreation program the UG doesn’t have today.

Mike Grimm, UG research manager, presented a chart showing annual charitable contributions by the new Hollywood Casino at Kansas Speedway. (Staff photo)

   The commission also will have to decide which charities and social services will receive the $500,000 in 2013, Reardon said, recommending a strategic planning session.

   The commission also will decide what to do with the gaming tax revenues from the casino. Back in 2007, the commission thought that the UG might receive $6.5 million a year by 2015 if the casino operated according to projections, and at that time officials might have had different ideas about how to spend it. 

   But since then, an economic crash in 2008 brought about the loss of 16 percent of assessed valuation here, Reardon said, and the state elimination of the machinery and equipment tax also caused a loss of millions of dollars in local revenues. Since 2008, there has been an $8 million shortfall, according to the 2012 budget summary.

   “So, we’re filling in holes because of the economy and what the state has done with the machinery and equipment tax,” Reardon said.

   The commission will be deciding whether to use it all in the budget to just make up for the losses of the past few years.

   No decisions on how to spend the new casino revenues were made during Thursday’s discussion, and no opinions were voiced about reducing local taxes.

   The UG, according to Chief Financial Officer Lew Levin, expects to receive about $3.7 million this year from the casino gaming tax. Three percent of the revenues was allotted to local governments from the new Hollywood Casino at Kansas Speedway in Kansas City, Kan. The local estimate is based on a $200 million total revenue estimate. He said he hopes the figure turns out to be higher than $3.7 million. About $44 million is expected to go to the state’s general fund, and another 2 percent to the state problem gaming fund. The 3 percent will pass through the state first before being remitted to the local governments, according to UG officials.

   The revenues to the UG include 1.5 percent of the revenues for Wyandotte County and .75 percent for Kansas City, Kan. While under state law the city receives 1.5 percent, an earlier agreement among the cities here will give Bonner Springs .48 percent and Edwardsville .28 percent of those revenues, along with the .75 percent for KCK.

   That agreement among the cities, Reardon said, helped prevent the casinos from pitting one city against the other when making their bids, and resulted in a higher quality casino.

   The casino is in the city limits of Kansas City, Kan., and the Bonner Springs school district, and that is where property tax revenues would go, according to Levin.

   For 2011, in the early part of construction, the value of the casino was set at $53.8 million, he said. The property tax bill this year for the casino will be just under $2.4 million, he said, with the UG receiving less than half of that. For the next year, the value increases and the UG should receive more than $2 million more, he said.

   Levin added that while the casino is more than a $300 million investment, a good part of that is in machinery and equipment, which is now exempt from property tax.

   Bonner Springs School District will receive the school property taxes, according to Levin, and under a local agreement with the casino, an additional $500,000 will be allocated to be split among the Kansas City, Kan., Turner and Piper districts in 2013, he said. There is no formula yet to split it, and Reardon suggested that a formula be developed similar to one used earlier to split funding among the cities.

   The UG staff and now retired Chief Counsel Hal Walker negotiated a $500,000 contribution to charities from the casino, to begin for 2013, along with the other local agreements, according to Hays. The UG will select the charities.

   The UG staff also had negotiated an advance payment of 1 percent to the local government, about $2 million, which the casino started paying in March 2010.  That stops when the casino opens, and resumes again in January 2014, according to UG officials. Because the UG already is receiving some casino money and is using it in operating funds, it may be a few months before the effect of the additional casino revenue is felt.

   The effects of the money received from the casino probably won’t be felt until next fiscal year’s budget, starting in July, according to Levin.

   Besides the revenue benefits to local governments and charities, the new casino provided 1,700 jobs in construction and 1,000 permanent jobs, officials said.

   During the budget discussions in July 2011, the UG had issued some estimates that the gaming tax revenue during 2012 would be $3.4 million, but that was based on the casino opening in March rather than in February.

   Those July 2011 figures estimated total casino gaming, property and sales taxes to the UG, including both the county and Kansas City, Kan., from the casino to be $4.76 million during 2012; $7.94 million in 2013; $8.69 million in 2014; and $8.69 million in 2015. The years are fiscal years beginning in July of the year.

   Sales tax figures were not covered much at the Feb. 2 meeting, but according to the July 2011 UG estimates, they were expected to be $280,232 in 2012 and $420,327 in 2013.

   Property tax estimates, broken out by themselves, were estimated in the July 2011 budget to be $1,088,038 for 2012, $2,993,115 for 2013 and $3,741,394 for 2014 and 2015. Those are combined city and county property tax figures.