TIVERTON — Tiverton could face a $2.2 million shortfall in its revenue this fiscal year, largely due to the closing of the casino because of COVID-19.
The town had built the $3.1 million it expected from gaming this fiscal year into its operating budget, but to date only $1.2 million has been collected from gaming, and the chances the state will make up the rest is questionable.
Legislation in 2016 that paved the way for a casino to be built in Tiverton, using the license transferred from the former Newport Grand slots parlor, included a provision that the town would be guaranteed $3 million annually from gaming revenue, with the state making up any shortfall to the town from its share of gaming. Another $100,000 was added to the expected revenue from sports betting.
But as Councilman John Edwards V pointed out during Monday night’s Town Council meeting, the casino has to be operational for the town to get the money.
The Twin River Tiverton Casino Hotel at the intersection of William S. Canning Boulevard and Stafford Road, near the Fall River state line, like many businesses and schools, has been closed for more than a month to reduce the spread of the coronavirus.
A 2018 ballot question that proposed to amend the town charter to restrict gaming revenue to debt service, infrastructure and capital failed at the polls on a vote of 3,133 against, to 3,119 in favor, or 50.1% to 49.9%.
Edwards referred to the current situation the town finds itself in as “the biggest I told you so moment in the history of mankind.”
Council President Patricia Hilton reminded everyone that Lincoln Town Administrator Joseph Almond came to Tiverton to talk about that town’s experiences with its Twin River Casino and urged the town not to rely on the gaming revenue for operations, as Lincoln once did.
“Joe Almond said not to put the money into operations,” said Hilton. “Now we’ve got it in operations.”
All of the $3.1 million in expected gaming revenue is in the operations budget, said Town Treasurer Denise Saurette.
Not only is gaming revenue short, Hilton said the line item in the budget for the police and fire detail at the 24-hour casino could be short $80,000, and meals and beverage taxes won’t meet projections.
Interim Town Administrator Christopher Cotta said he issued an executive order recently that “all discretionary spending must stop.”
Hilton said the town “has put the breaks on every bit of non-essential spending until the end of the year.”
There has not been a decision at the state level on revenue to municipalities, Cotta said, but added: “I’m fearful we’re going to get a significant cut.”
He said he has identified some $500,000 in savings in the budget, but that doesn’t close the gap.
Trying to put together a fiscal 2021 budget for the new fiscal year that would begin July 1 is hard, as is trying to figure out how townspeople will be able to take part in a required public hearing on a proposed budget before the financial town referendum that is now scheduled for June 20 instead of the initial date of May 15.
A new timeline for the Budget Committee to recommend a budget is May 7.
Cotta said it would be “somewhat foolhardy” for the Budget Committee to try to recommend a budget without having all the facts about revenue and suggested the town could send out a first quarter tax bill to taxpayers based on the current budget and have a FTR at a later date when more information is known. But he also said the town is not getting responses back from the state on what they can and can’t do.
Councilwoman Nancy Driggs thinks otherwise. “The Budget Committee has to do the best they can do,” said Driggs. “They have to try to figure out a budget on the revenues they think they will have.”
Hilton didn’t agree with Driggs.
“I do not agree the Budget Committee should have to go forward with revenue numbers that are pointless,” said Hilton. “The Budget Committee could be stuck with a budget that’s not worth the paper it’s written on,” by using revenue numbers that were projected before the COVID-19 pandemic upended the economy.
All municipalities are in the same situation, said Town Solicitor Michael Marcello. At this time there’s an assumption that there could be a 20% cut in revenues to municipalities.
Tiverton gets a total of some $12 million from the state, said Hilton of the aid that comes to the town for a variety of things, like education, libraries, and offsetting motor vehicle taxes.