Weekly Review
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October 14,
2008
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State Revenues
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Overall Revenues
Down $38 Million From This Point Last Year
The Illinois Commission on Government
Forecasting and Accountability (COGFA) has
released the September 2008 revenue report.
Comparing September (FY) 2009 to September (FY)
2008, revenues increased $267 million for the
month, mostly due to a rise of $146 million in
federal sources.
Despite an overall increase, only a few sources
experienced gains for the month.
September (FY) 2009 compared to September (FY)
2008
Increases in
Revenue:
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Gross personal income taxes grew by $69
million, or $63 million net of refunds
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Sales tax receipts rose by $40 million
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Public utility taxes gained $7 million
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Federal sources jumped $146 million
Decreases in
Revenue:
- Corporate franchise taxes fell $16
million
- Interest earnings dropped $6 million
- A number of sources each experienced a
$1 million decline for the month--liquor
taxes, vehicle use tax, inheritance tax, and
insurance taxes
COGFA Warns of Revenue Concerns
COGFA reports that even though this year's
September revenues were higher than the last,
through the first quarter of FY 2009, overall
base revenues were down $38 million. COGFA
warned a number of items will serve to restrict
revenue growth in FY 2009 [i.e. increased refund
percentage, lower miscellaneous transfers,
reduced Cook County IGT, less from riverboat
transfers, returns from interest income, no
expected growth from federal sources]. This,
combined with a weak economy, does not promise a
bright revenue picture for the year.
Read the entire COGFA report here
Read last week's revenue roundup here
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Gaming
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The Illinois Commission on Government Forecasting
and Accountability has released the 2008 Wagering in
Illinois report. The report analyzes state gaming
with a focus on riverboat gambling, lottery and
horse racing.
(Read the entire report here).
The report outlines that gaming in Illinois is a
significant source of revenue for the State. In FY
2008, $1.2 billion was deposited into the State's
general funds from Illinois' gaming sources.
However, FY 2008 revenues from wagering were down
6.5% or $86 million over FY 2007. :
Major
Findings:
- In FY 2008, the State's share of horse
racing, lottery, and riverboat revenue reached
$1.230 billion, an $86 million or 6.5% decrease
from FY 2007 levels. The $86 million decrease
consisted of a $35 million increase in lottery
transfers to the Common School Fund, which was
offset by a $121 million decrease in State
riverboat transfers to the Education Assistance
Fund. Horse racing revenues held relatively
flat.
- In FY 2008, lottery transfers comprised 53%
of total gaming revenues, whereas riverboat
transfers comprised 46%, and horse racing
comprised of 1%. Overall gaming per-capita
spending declined 5.3% in FY 2008 to a value of
$225. This was the first year of decline after
three consecutive increases in per-capita
spending.
- Statewide adjusted gross receipts (AGR) for
Illinois riverboats in FY 2008 were down 7.5%
while admissions were down 1.8% from FY 2007
levels. This is the first decline in these
figures since FY 2004 (the first year of the
two-year 70% maximum tax rate). State revenues
from riverboat gambling totaled $591.8 million,
which was a 16.0% decline from FY 2007 levels
and was the lowest amount generated since FY
2003.
- The indoor smoking ban, weather conditions,
higher motor fuel prices, and the slowing
economy were contributing factors to the decline
in State riverboat tax receipts.
- Illinois riverboats have struggled since the
indoor smoking ban began on January 1, 2008.
Adjusted gross receipts fell 17.5% and
admissions declined 6.8% for the first six
months of the smoking ban. For that same period,
the adjusted gross receipts for the Chicago area
riverboats were down 18.6% for the four Illinois
boats in that region, while Indiana's four
closest riverboats in the Chicago area were only
down 0.2%.
- Competition from other states in casino
gambling is likely to intensify. Two new
riverboats have or will open in Missouri near
St. Louis in the next year. New casinos, within
a short drive to Illinois' border, have also
opened in Iowa and Michigan. In addition,
Indiana has begun offering slot machines at
their racetracks.
- There continues to be numerous discussions
on changes that could be made to Illinois'
gaming industry to increase revenues for the
State. These include adding additional gaming
positions at the current riverboat facilities,
allowing slot machines at Illinois horse tracks,
adding new riverboats/casinos, and reissuing the
10th license, which appears close to becoming a
reality.
- Illinois' AGR per Table Game and AGR per
Electronic Gaming Device are significantly
higher than neighboring states. Possible reasons
for this include: Illinois gamblers spend more
money on gambling than other states, Illinois
limits the number of positions allowed, and
gaming positions in Illinois are being utilized
more frequently than other locations. This also
suggests that Illinois has not yet reached its
gaming saturation point.
- In FY 2008, lottery sales totaled
approximately $2.054 billion, a 2.8% increase
from the FY 2007 total of $1.998 billion. FY
2008 was the first year sales topped $2 billion
in the lottery's 33-year history. From this sum,
32% or $657 million was transferred into the
Common School Fund, a 5.5% increase from the FY
2007 transfer amount of $622.6 million.
- The largest dollar increase in lottery sales
came from the Instant games, which rose $52
million or 5.0%. Mega Millions grew $25 million
or 12.8% over FY 2007. The St. Patrick's Raffle,
Lotto, and Little Lotto experienced minimal
growth. These increases offset losses from Pick
N Play (-40%), Pick 3 (-3.1%), and the Pick 4
Game (-1.4%).
- Instant games continue to comprise the
greatest percentage with 53.3% of lottery sales.
The Pick 3 game had the second highest a
percentage at 14.6%. Most of the remaining
revenues come from Mega Millions (10.8%), the
Pick 4 game (8.2%), Little Lotto (6.2%) and
Lotto (5.4%).
- The Illinois Racing Board reported that 621
race programs were conducted during CY 2007. A
total handle amount of $929 million resulted,
which was a decrease of 2.4% over the 2006
amount and the lowest amount experienced since
1986. The thoroughbred total handle ($630M)
dropped less than 1%, while the standardbred
total handle ($299M) dropped nearly 7%.
- Between 1992 and 2007, the percentage of the
total handle generated from on-track wagering
fell from 39% to 21%. This decline coincided
with a dramatic increase in participation at
off-track betting locations. Over the previously
mentioned time frame, the percentage of the
total handle generated at off-track wagering
facilities increased from 35% to 55%. Despite
this shift, inter-track wagering remained stable
and generally comprised between 25% and 30% of
the total handle.
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Budget
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Governor Signs
Fund Sweeps Bill but Not Companion Spending Bill
Governor
Blagojevich has signed Senate Bill 790 into
law. The bill outlines transfers of
$221,250,000 from special state funds to the
General Revenue Fund (also known as fund
sweeps).
However, the Governor has not taken any action
on the companion appropriations bill,SB1103.
SB1103 outlines how the state should use the
funds in SB 790. Spending in SB 1103 is
intended to restore some of the $1.4 billion in
cuts the Governor made to the fiscal year 2009
budget.
Which funds were
swept? How much will be transferred from the
fund?
Read SB 790 here.
FUND SWEEPS
Special State
Funds are various, smaller funds identified and
held in the State Treasury as "special funds"
under in Section 5 of the Illinois Finance Act
restricted in use to the specific purpose for
which they were created.
There are over
300 of these special state funds that support
activities as diverse as medical assistance and
environmental cleanup. They are, for the most
part, designed as segregated accounts,
restricted in use and funded from specifically
earmarked revenue or fee sources. Examples
include the Illinois Affordable Housing Trust
Fund, the Youth Drug Abuse Prevention Fund and
the Brownfields Redevelopment Fund.
Since FY 2003,
the state has transferred almost $1 billion from
these Special State Funds to the General Revenue
Fund. However, this is not new revenue, it is
simply a transfer of revenue from Special State
Funds into the General Fund. This revenue swap
would not be available next year without
legislative approval.
Read more about
how the state transfers revenue from special use
state funds to the General Fund on page 25 of
the CTBA report,
Citizens Guide to the Illinois State Budget and
Tax System. The report contains a
wealth of information on all of these budget
issues.
Background
Governor
Blagojevich announced that 450 state workers
will be laid off along with the closure of 12
historic sites and 11state parks as a result of
the $1.4 billion in cuts he made to the fiscal
year 2009 budget.
Four departments
will be hit with the lay offs, including 300
positions at the Department of Children and
Family Services, 75 at the Department of Human
Services, and another 75 from the Department of
Natural Resources and the Historic Preservation
Agency.
According to the
State Journal Register (SJ-R), the lay offs will
be effective December 1st. The historic sites
will close Oct. 1st and state parks Nov. 1st.
The union that
represents the laid off workers, the American
Federation of State, County and Municipal
Employees (AFSCME) along with state lawmakers
told SJ-R the layoffs and closings were
unnecessarily heavy just a couple of months into
the new budget year that began July 1.
"Every time I
think he can't do something worse, he does,"
Sen. Larry Bomke, R-Springfield, said of the
governor.
AFSCME warned
that the cuts will put abused children and needy
families at risk and further hurt parks and
historic sites. It urged lawmakers to return to
the Capitol soon to try to reverse them.
"These cuts are
irresponsible, and they are deep," AFSCME
executive director Henry Bayer said.
Department of
Natural Resources spokesman Chris McCloud told
the SJ-R, "This is a tough day for DNR and
Illinois." Jonathan Goldman, executive director
of the Illinois Environmental Council, said
state parks had about 45 million visitors last
year, and the resulting loss in economic
activity probably will outweigh any savings.
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Calendar
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WHAT:
Senator Michael Noland, 22nd district town hall
meeting on education funding reform.
WHEN:
October 29th, beginning at 7 p.m
WHERE: Centre
of Elgin
INFO:
Senator Noland wants
to hear from those who live and those who represent
those who live in the 22nd district on the subject
of
SB 2288.
Ralph Martire of the
Center for Tax & Budget Accountability will be a
featured guest at this
event along with
Elgin Mayor Ed Schock who will provide his
observations as a local city mayor and former U-46
school principal. Candidates for office within the
22nd District are also welcome to attend and as time
permits share their views on this issue.
Please contact
Senator Noland with any questions you may have.
District Office:
The Tower Building
100 East Chicago
Street, #302
Elgin, IL 60120
847-214-8864 ph
847-214-8867 fax
info@noland.org
www.noland.org
WHAT:
Leadership for Diversity Conference
Social Justice for Illinois Schools
Pre K-12
WHEN:
Friday-Saturday, January 30-31, 2009
WHERE:
Bradley University · Robert H. Michel Student Center
· Peoria, IL
INFO: The
purpose of this conference is to promote a statewide
dialogue about best leadership practices to promote
learning in diverse environments. We seek to
understand policy implications at the local, state,
and national levels that affect all stakeholders in
diverse settings. It is our hope that from this
dialogue will emerge effective leadership practices
that build inclusive learning communities where
diversity is valued, respected and promoted.
Keynote Speakers:
Dr. Linda Skrla,
Associate Dean for Research, P-16 Initiatives, &
International Programs, Texas A&M University, Ralph
Martire, Executive Director, Center for Tax and
Budget Accountability, Phillip Jackson, Founder &
CEO, The Black Star Project
Registration Fees:
Friday Afternoon Diversity & Inclusion Awareness
Workshop $50.00
Friday Evening $50.00
Saturday $125.00
CPDU credit available - $15.00 Register online at
www.iwel.org. (Deadline for registration is January
9th.) Questions? Contact Dr. Jenny Tripses at
309-677-3593 or jtripses@bradley.edu
WHAT: Dupage Federation on Human Services
Reform, Making the Connection: Accessing Public
Benefits for Low Income Persons
WHEN: October
1, 8, 15, 22, 29
February
18, 25
March 4,
11, 18
June 3,
10, 17, 24
July 1
WHERE: All trainings held at NIU Naperville,
1120 Diehl Road, Naperville, IL
INFO: Making the Connection training sessions
contain information in an easy-to-understand format
regarding many programs available to assist low
income persons.
Individuals who register for a Making the Connection
training session now receive membership access to
the Federation's newly developed Making the
Connection Illinois website, www.mtcil.org.
To register and for more information please visit
www.dupagefederation.org.
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Do you have something to add to the Weekly
Review?
email Chrissy Mancini @
cmancini@ctbaonline.org
___________________________________________________________________________
Center for
Tax and Budget Accountability
70 East Lake Street, Suite 1700
Chicago, IL 60601
312-332-1041
www.ctbaonline.org
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