Deadwood History Link

Myths About Deadwood Gaming And Historic Preservation

MYTH: Deadwood is not spending historic preservation funds properly.

REALITY: Deadwood has received national recognition for its historic preservation program. Funds spent by Deadwood on historic preservation and related activities have met the U.S. Department of Interior’s guidelines, and Deadwood’s historic preservation programs are audited yearly by the State of South Dakota. Deadwood has used historic preservation funds to undertake archeological investigation in the old Chinatown/Badlands area of Deadwood and have generated substantial new information about South Dakota’s early history. This big picture approach is not unique to Deadwood - it is the same approach taken by virtually every other major historic destination in the U.S. and many around the globe.

MYTH: Deadwood improperly diverts money to pay routine city expenses.

REALITY: Deadwood uses historic preservation funds to reimburse the city for costs that are directly attributable to historic preservation and visitor management. For example, fire is the chief threat to historic buildings. Because of its historical buildings and heavy visitation, Deadwood must follow a tougher set of life safety standards than other cities of comparable size. For that reason, Deadwood has found it necessary to have one full time employee in its fire department (the fire chief is a volunteer elected by the fire dept. volunteers.) As a result, Deadwood’s fire department operational budget in 2003 was approximately $190,000. By comparison, similarly sized South Dakotan communities have fire departments with annual budgets of around $30,000. The scenario is similar with police and infrastructure expenses. These expenditures are reviewed annually by the State Historical Society Board of Trustees, are subject to oversight by the Legislature and are audited annually by the South Dakota Department of Legislative Audit.

MYTH: Gaming – rather than historic preservation – causes the visitor impact.

REALITY: The relationship between gaming and historic preservation is not only a practical matter of economics, it was also embedded in the State Constitution by a vote of the people when they approved a Constitutional amendment that specified that the “entire net municipal proceeds of gaming shall be devoted to historic restoration and preservation of Deadwood.” Without gaming, there would be little non-federal funding for historic preservation in South Dakota. The more successful gaming is, the more money Deadwood has for historic preservation and the more money it has to share with other locales in South Dakota. Moreover, gaming IS part of Deadwood’s history. Various forms of gaming have been part of the fabric of Deadwood history since 1876.

THE MYTH: Deadwood’s marketing expenditures are improper.

REALITY: In Deadwood, as well as other major historic sites around the nation, marketing has long been recognized as a legitimate expenditure because it brings visitors that in turn generate revenue. All spending is reviewed by proper authorities, has been consistent with state law and national historic preservation guidelines, and has been audited annually. For every $1 of historic preservation funds spent for marketing, the gaming industry spends $7.14. To put that in perspective in another way, for every $1 of tax money that Deadwood spends marketing itself, it sends $2.50 to the State Tourism fund.

MYTH: Deadwood has run out of legitimate historic preservation projects.

REALITY: Nothing could be further from the truth. Historic preservation is an expensive, ongoing process. It is a constant battle against age, weather, threats like fire, and the wear imposed by visitors. Historic preservation involves not just restoration but continued maintenance and upkeep. While hundreds of buildings have been restored in some way, the job is far from complete. Numerous historic properties need attention, including major undertakings such as the Slime Plant, the Martin Mason building and the Pineview building.

MYTH: Citizens of Deadwood enjoy a tax windfall.

REALITY: This would be welcome news if only it were true. The truth is that the City’s property tax base did increase, but so did its expenses. Excluding historic preservation funds, the city budget increased from approximately $1.4 million before gaming to $10.2 million in 2003. In 1989, the year prior to gaming, assessed valuation of property in Deadwood stood at 43% of full and true value and totaled $28 million. Following a reappraisal to 85% of full and true value and the arrival of gaming, in 2002 assessed valuation stood at $106 million, but a portion of that gain must be attributed to reassessment rather than gaming property.

MYTH: Deadwood gaming establishments are making a fortune.

REALITY: Operating costs for Deadwood gaming establishments continue to rise driven by increased visitation. The Deadwood gaming tax is based on gross receipts and “comes off the top” with no adjustment for increased operating costs.

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