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State owes suburbs millions in gambling taxes

Illinois gamblers lost more than $227 million to machines at bars, restaurants and gas stations in the first 90 days of the state budget impasse, but local governments have received none of the $11.3 million tax share they're owed, state records show.

It's the same story with casino money. In July alone, the Rivers Casino in Des Plaines generated enough gambling losses to send more than $2.2 million to local governments, according to an Illinois Gaming Board monthly report.

But it's all stalled because the state doesn't have the authority to pay out because it doesn't have a spending plan in place.

The state says the money will eventually be paid when Gov. Bruce Rauner and lawmakers come to an agreement on a budget that was due July 1. Lawmakers are scheduled to meet in Springfield Tuesday, but because there is no plan in place, the stalemate is set to continue.

The governor said last week he was "cautiously optimistic" money troubles in Chicago could be the pressure point to spark a deal, but the timeline he gave wasn't immediate.

"They need some help in December," Rauner said at a news conference Friday. "Maybe in December or January, maybe there will be enough incentive to compromise and we'll be able to get something done, but I don't know, it could be longer."

How much individual suburbs will be hurt in the meantime might vary widely and depend on how long the fight drags on and to what degree they depend on the gambling money.

Hoffman Estates, for example, is owed $71,606 from gambling in July, August and September, the first three months the state has gone without a budget. Fox Lake is owed $66,479 over the same time, and Oak Lawn is owed $113,338. Some suburbs don't have the gambling machines at all.

Hoffman Estates Mayor Bill McLeod said the delay of that gambling money probably won't cause big problems by itself, but add it to the gasoline tax towns aren't getting from the state, either, and some local governments are starting to have problems.

He said Hoffman Estates authorized video gambling more to help local businesses than to generate money for local government.

Casino hosts have seen bigger-money delays so far. The Grand Victoria Casino in Elgin produced nearly $1.8 million in local taxes from July, August and September, according to state records, but the state hasn't been paying. Mayor David Kaptain says the delay in payments is becoming more of a concern.

"This is starting to sting a little bit here," Kaptain said.

Court orders and federal decrees are keeping the money flowing for many Illinois programs, including state payroll. But Illinois Lottery payouts and state college funding are among the programs that join local gambling taxes that remain stuck without a state budget.

When lawmakers meet Tuesday, the Illinois House could begin considering legislation from state Rep. Marty Moylan, a Des Plaines Democrat, that would have Illinois start sending some stalled tax money and start paying out lottery winners again. But it faces a long road to approval and Republicans argue court decisions already have the state budget far out of balance.

Democrats have criticized Republican Rauner for vetoing most of the budget they sent him in the spring to keep government open. Rauner wants Democrats to go along with some of his pro-business proposals before he'd consider a tax hike to balance the budget.

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  People can keep playing video gambling machines during the state budget standoff, but local governments aren't be getting their share of the money. George LeClaire/gleclaire@dailyherald.com
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