GAMING RESCUES CITY, BUT DEPENDENCE WORRISOME

ALTON, Ill. -- This blue collar city of 34,200 was in financial trouble when the Illinois gambling law took effect early in 1990.

The riverboat that has been moored only about 200 yards from City Hall since September 1991 was approved by the Board of Aldermen. If Illinois had required a local option, the boat never would have survived an election in this conservative community, says new Mayor Bob Towse.

Settled earlier than St. Louis and once considered as a site for the state capital, Alton through most of the 20th century was reliant on heavy industry and supporting businesses. At one time a huge glass plant, a plow company and a cracker factory fired the city's economy. They're all closed.

Downtown Alton, where the Grand Theatre is no longer grand and no longer open, looks like the skeleton of a city that once worked.

In the recession of the 1980s, the city's revenues began declining apace with state and federal funding. Then the state was late with its payments. The crunch came three years ago, and the city began laying off people.

Gambling has allowed the town to recover somewhat, says Towse, a native and former alderman who has been in his new office only five weeks.

The previous mayor of Alton, whom Towse defeated in a five-candidate race, counted money from the riverboat as operating revenues. The city's operating budget this year includes $2.2 million from the boat.

Towse wants to wean the city away from that kind of dependence.

"If something would happen for the boat to leave we would have to make some cuts and lay off people," he said.

"(Gambling money) should be treated as unanticipated revenues." He calls it "unreliable income."

Because of past financial practices that favored benefit increases over pay raises and allowed employees to collect sick days over the course of their employment, 71 percent of the city's $18 million-plus budget goes to employee salaries and benefits. That compares to 35 percent in East Alton and 25 percent in Edwardsville. In Cape Girardeau, the percentage is 32.

That heavy load is one reason gambling was so attractive to Alton, but Towse wants the city to stop using the revenue to fund budget line items.

"We're finding it extremely difficult to back out of that. You're dealing with human beings who depend on this for job security," he said.

Alton receives 4 percent of the boat's adjusted gross income plus $1.20 per head from the admissions. The 20 cents goes toward development of waterfront land Altonians called The Commons, which is adjacent to the riverboat landing.

The $25 million master plan for the land, which was donated to the city by the man who laid out the city, calls for construction of a marina, an amphitheater and fountain, and a pedestrian plaza.

The casino's ticketing and restaurants are located on barges as they are in Metropolis, Ill. The Argosy office is a few blocks away on land. Towse says the casino has upgraded the waterfront substantially through improvements to the docking facilities and the levy.

"It's in their best interest to do it, too," he said. "The more attractive it is, the more kinds of things there are down there luring people."