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home : news & opinion : news & opinion
June 20, 2018

6/2/2010
DOLLAR$$$
In a previous incarnation, I was advertising director at the local newspaper. In that capacity, I instructed members of the advertising staff to become marketing consultants to their clients by providing factual information and sound advice. Clients who followed the advice would see their advertising results increase, which would make them more likely to invest in future advertising.

One example of sound advice for retail advertising clients was fairly simple. We regularly suggested that "Sale Ads" would be far more effective if the advertiser would include the sale price of the item being advertised. In other words, the advertisement should inform a potential customer precisely how much the item will cost in dollars and cents and show how many dollars and cents the customer will save on the purchase.

In short, an ad that proclaims "20% Off Regular Price" will not be as effective as an ad that says, "Sale Price $8, Regular Price $10, You Save $2" because people want to know exactly how much an item costs in order to compare prices and to determine value.

Therefore, in order to increase the effectiveness of an ad, the basic rule is: "Show the price and show the math, because percentages alone do not provide enough facts to allow consumers to make informed decisions."

I was reminded of that basic rule recently after reading a report of the Shelbyville Common Council's Special Meeting concerning a plan to allocate the city's racino revenue to some of the community's social service agencies and non-profit organizations.

I encourage you to read the newspaper's coverage of the meeting here. Then, if you're still interested, search previous stories or other public comments concerning the city's share of racino revenue.

You will quickly discover there is plenty of talk about percentages, but very little discussion of the actual dollars involved in the allocation of racino funds by city officials.

So, forget percentages, let's look at the dollars.

According to Indiana Code, Indiana Live! Casino must pay a slot machine wagering fee equal to three percent (3%) of the adjusted gross receipts received from slot machine wagering each fiscal year to Shelby County. However, the casino is not required to pay more than eight million dollars ($8,000,000) in any fiscal year.

The casino pays the fee monthly to the Indiana gaming commission; the commission deposits the fees into the state general fund; the state treasurer then distributes the fees to the county. After that, the county allocates the revenue to each city and town within Shelby County based on the town's population. All unallocated revenue is retained by the county. This distribution ratio allows the City of Shelbyville to receive approximately 41% of the wagering revenue.

But how much is 41% in annual dollars? Let's show the math.

The casino would need to generate adjusted gross receipts of $266,666,667 per year to reach the $8,000,000 cap on the annual fee. ($266,666,667 x 3 percent = $8,000,000). Which means it's possible that the City of Shelbyville could receive up to $3,280,000 A YEAR in racino revenue.

However, using 2010 year-to-date monthly payments, a realistic projection of adjusted gross receipts for the current fiscal year is likely to be closer to $225,000,000.

That estimate yields an allocation of $6,750,000 to Shelby County for fiscal year 2010 ($225,000,000 x 3 percent = $6,750,000). The city's 41% share of that amount is $2,767,000.

And how do city officials propose to spend that $2,767,000 annual windfall?

Here's their annual spending plan, in dollars AND in percentages:

$2,075,625 - Economic Development & Redevelopment (75%)

$ 207,525 - City Streets (7.5%)

$ 207,525 - Non-Emergency Vehicles (7.5%)

$ 138,350 - Blue River Community Foundation (5%)

$ 138,350 - Reserve Fund (5%)

Remember, the above dollar amounts represent ANNUAL SPENDING of casino wagering fees by the city. Are you curious to see how much money will be spent with this plan after five years of receiving casino revenue?

Let's assume the casino reports adjusted gross receipts of $225,000,000 each year for the next five years. That means if the city's population ratio stays the same, the City of Shelbyville will receive it's 41% share of $6,750,000 every year for the next five years for a total of $13,837,500. ($6,750,000 x 41% = $2,767,500 x 5 years = $13,837,500).

If the the same allocation plan is retained during that period, here's how much the city will spend in each category after five years:

$10,378,125 - Economic Development & Redevelopment (75%)

$ 1,037,812 - City Streets (7.5%)

$ 1,037,813 - Non-Emergency Vehicles (7.5%)

$ 691,875 - Blue River Community Foundation (5%)

$ 691,875 - Reserve Fund (5%)

Over TEN MILLION DOLLARS for economic development activities and projects?

Over ONE MILLION DOLLARS for non-emergency vehicles?

Really?

Meanwhile, a comparatively meager, five-year investment of $691,875 in the Community Foundation will only produce a paltry $35,000 to be shared each year by a few of the city's social service and nonprofit organizations who are fortunate enough to be selected as recipients of grant money by common council members. Oh, and by the way, that $35,000 is equal to about one percent of the city's annual casino revenue.

Really!



Reader Comments

Posted: Tuesday, August 17, 2010
Article comment by: Me Mine

Funny... everyone wants their hand in it. Get over it people.

Posted: Wednesday, June 9, 2010
Article comment by: just the half of it

don't forget the county has also set aside the majority of their racino fund for economic development. I would love to see more of the money spent on the roads. The Fairland road project has been going on for almost 2 years and the detour route is in such bad shape that a semi falls into a culvert. now that route is closed to vechicles 3 ton and over. maybe we should just let all the roads go and start closeing them as they become unpassable. then we won't need to spend any money on roads. get your atv's ready. i hope after all the economic development money were useing i will at least have an 11.00 a hr job to go to. sorry. blah blah blah blah blah

Posted: Friday, June 4, 2010
Article comment by: Goats on our local councils?


I don't know how many - if any - of our city and county council members call themselves Christian.

But, with the pathetic crumbs off the table of the casino money they are budgeting to the local poor - including our senior citizens - they need to ponder the words of Jesus from the Bible
concerning this type of coldness and hardness of heart:

Matthew 25:31-46

"When the Son of Man comes in his glory and all the angels with him, then he will sit on his throne of glory and all the nations will be gathered before him and he will separate them from one another, just as the shepherd separates the sheep from the goats, and he will put the sheep on his right hand and the goats on his left.

Then the King will say to those on his right, “Come! you who are the blessed ones of my Father, inherit the kingdom that was prepared for you from the beginning of the world. For I was hungry and you gave me something to eat, I was thirsty and you gave me a drink, I was a stranger and you invited me in, I was naked and you clothed me, I was sick and you visited me, I was in prison and you came to me.”

Then the righteous will answer him, saying, “Lord, when did we see you hungry and fed you, or thirsty and we gave you a drink? And when did we see you a stranger and we invited you in, or naked and we clothed you? And when did we see you sick or in prison and we came to you?”

And answering, the King will say to them, “Truly I say to you, as much as you did for one of the least of these brothers of mine, you did for me.”

Then he will say to those on his left, “Depart from me, you accursed ones, into the eternal fire that has been kept in readiness for the devil and his angels. For I was hungry and you did not give me anything to eat, I was thirsty and you did not give me a drink, I was a stranger and you did not invite me in, I was naked and you did not clothe me, I was sick and in prison and you did not visit me.”

Then they will also answer, saying, “Lord, when did we see you hungry or thirsty or a stranger or naked or sick or in prison and we did not help you?”

Then he will answer them, saying, “Truly I say to you, as much as you did not do it for one of the least of these, you did not do it for me.”

And they will go away into eternal punishment, but the righteous into eternal life."



Posted: Friday, June 4, 2010
Article comment by: greedy!!

to In The name of God:
I agree. five per cent is pathetic! but theyre only giving interest on the 5 per cent to needy people in town which is really only ONE PER CENT!!! theyre greedy mean snobs


Posted: Thursday, June 3, 2010
Article comment by: In The Name of God

Tell me....do we have ONE member of the city council or county council who actually has a heart and a conscience???

Five percent for dire needs of human beings in this city and county - including senior citizens who don't have enough money to buy groceries! (and yes, I personally know of many seniors like that in this town and county).

Five percent!!!!

This is absolutely pathetic. You (council members) should all be ashamed for coming up with such a budget for the casino money.

If you're not ashamed, then your hearts are hard as concrete.



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