Search This Blog


Shreveport finances headed for withdrawal from gambling fix

In a story first broken by Fax-Net Update, it turns out that the “magic bullet” (or, alternatively, “Field of Dreams” – “build it and they will come”) philosophy of economic development vigorously pursued by Shreveport Mayor Keith Hightower, is starting to come a-cropper. Making matters worse is his simultaneous “Mardi Gras” style – shower constituencies (and especially friends) with money to keep the votes rolling in.

The impending disaster all started in public when, as a period of City Council vote fluidity appeared in efforts to get construction going on the convention center hotel that may have delayed or derailed it, at the very same time councilman Jeff Hogan won a promise to shovel some money to a civic organization in his district and said he was ready to vote for construction to begin.

But when the city started to look for the money to meet the promise, it instead found a rapidly deteriorating financial position, courtesy of declining casino revenues, and informed council members as such. This is because Hightower has had a habit of putting it all on one throw of the dice – casinos, and now the convention center, and it’s gotten worse.

Employment trends don’t lie. In 1998, Hightower’s election, Caddo Parish (of which over 80 percent is Shreveport) had 106,079 jobs with 10,202 of them in the amusement/gambling category, or about 9.6 percent. By 2002, jobs had increased slightly to 109,937 but amusements/gambling jobs had mushroomed to 23,553 or around 21.4 percent of the city’s total. As the years have gone by, the health of the city’s economy depends more and more on gambling.

(By contrast, Bossier Parish numbers, of which Bossier City represents about 60 percent, show a slight 1 percent increase in the proportion of amusement/gambling employment over the same period. But it’s now almost a quarter of the jobs in the parish – the city, whose city council members all were returned to office in this years elections and the outgoing mayor was replaced by his chief lieutenant, has been unable to reduce Bossier City’s even higher level of dependence on the casinos. At least its “riverboat fund” has nearly $30 million in it, even though a small portion of that has been appropriated to balance the city’s budget in recent years.)

The casinos are estimated to dump most (almost 95%) of the estimated $14.086 million going into the Riverfront Development Fund in 2005. Projections are that this amount will be more than 13 percent below anticipated. From the final total, almost $2.6 million was budgeted to be doled out to a number of organizations.

Worse, this problem has been a long time coming, and the city did nothing in the name of prudence. In 2004, civic appropriations were slightly higher than those budgeted for 2005, but total fund expenditures outstripped revenues by over $3 million, over 22 percent, taking the reserve down almost 74 percent. With less than $1.8 million left, that means at current rates the fund will have been depleted totally at the end of this year.

So, just cut back on civic appropriations, then? Not so fast, because much of the fund goes into funding other city operations:

Shreveport uses its Riverfront Development funds to pay debt associated with the new Convention Center and the relocation of City Hall downtown, to provide funds to various community and civic groups, to pay Convention Center pre-opening expenses and for professional services contracts and capital projects. (emphasis added)

In fact, 22 percent, or about $3.5 million (around 1 percent of the total city budget) goes into the general fund, 28 percent, almost $4.5 million, goes to paying the convention center debt (as if having a hotel that can’t pay for itself isn’t enough), and professional services, while professional services (how are the winners of these contracts determined?) eat up about another $2 million.

At this rate, it’ll be lights out in Shreveport (and Bossier City) when Texas expands gambling, perhaps as early as now in a special legislative session. Thus are the wages of ever-expanding government that is unable to expand in any significant way diverse economic development.

No comments: