Despite drop-off in gambling money, Lincoln scores surplus

Despite drop-off in gambling money, Lincoln scores surplus

LINCOLN – During the fourth quarter of the past fiscal year in the spring, Lincoln took in just $107,000 in commissions from video lottery terminals at Twin River Casino. That number is compared to $1.55 million for the same quarter a year earlier. The end result was $4 million in VLT commissions, down from $6.24 million a year earlier.

Table game commissions, at $1.96 million two years ago, dropped to zero from the third week in March through the end of the fiscal year on June 30. It has crawled back since, but the year starting July 1 has only generated $73,000 after a sharp drop to $676,000 in total revenue for 2019-2020. Table game revenue through August, compared with the first two fiscal year months of 2019, was down some 42 percent.

“It’s struggling,” said Finance Director John Ward, but hopefully as more areas of the casino open, the town will come close to hitting its $5.2 million that goes toward its general fund from gambling revenues each year.

The third quarter of the fiscal year, including March when the casino was first closed, was also down. Quarterly earnings in general had declined since the opening of the Tiverton casino.

Ward said that Lincoln’s decision years ago not to rely on excess gambling revenues for the budget, instead putting them toward a capital fund, has saved the town during an unprecedented drop-off in casino activity during the pandemic.

“We would have been so screwed,” he said of a scenario where the town could have budgeted all of its gambling revenues for regular expenses. “It just would have been incredible how big a deficit we would have run.”

Ward presented a report to the Town Council Tuesday showing that Lincoln secured a “modest surplus” for the fiscal year ending June 30, or $825,000.

“That’s a good thing,” he told The Breeze. “I was not sure our tax collections were going to be there.”

He said he was nervous about not getting to break-even and having to tap into special reserves.

For years under Town Administrator Joe Almond, Lincoln has set aside excess gambling revenues, planning for if Twin River ever lost too much competition to Massachusetts casinos, said Ward. Excess revenues beyond the $5.2 million threshold going to the general fund are put into the capital improvement fund, for a total of $2.2 million extra two years ago. Last year, with the fourth-quarter pandemic numbers factored in, the town came up $523,000 short of the $5.2 million figure. The result will be no excess gambling receipts going into the capital fund for the 2022 budget.

“We didn’t want to become gambling dollar junkies and have revenue brought away from Massachusetts,” said Ward.

He said the town took a number of steps to hold back spending this year and do other “things to stay in good shape” as gaming revenues plummeted. Those steps, combined with successfully collecting 100 percent of tax revenue for the budget (based on 97.5 percent against the levy, or total amount collected in taxes), helped lead to the surplus. Residents helped the cause by successfully making their fourth-quarter tax payments.

Lincoln is down about 3 percent in tax revenue so far this year, said Ward, but he considers that to be a good sign because the town hasn’t sent out motor vehicle tax bills yet and “would have collected a goodly sum” at this point.

The bottom line, said Ward, is that Lincoln is doing well on tax collections and not so well on gambling revenues.

“It’s sort of glum news, but it could be worse,” he said.

It will be very difficult to reach that $5.2 million threshold this year, he said, but that problem is nothing compared to what would have happened if Lincoln had budgeted the full $6 million to $7 million it was previously getting in gambling revenue for regular expenses.

“We are hopeful that we will see a reverse of the downward curve and possibly get to the $5.2 million of revenue in the budget,” he said.