Sin taxes hold steady, despite bad economy

If the dismal state of the economy has you lighting up a cigarette or reaching for a drink, you're not alone.

So far this year, you can count cigarettes, lottery games and liquor as three things that Illinois residents are not cutting back on during these tough economic times.

State records show that cigarette and liquor tax receipts, as well as sales figures for the Illinois Lottery, have either remained steady or gone up a bit since the new budget year began July 1, compared to the same period last year.

Jodie Winnett, acting superintendent of the lottery, said because it costs relatively little to play the lottery, it seems to be immune from general economic conditions.

"It's a small purchase, and a good bit of escapism," Winnett said. "You can spend $1 or $2 and dream about the possibility of hitting it rich. That doesn't seem to be a place people look at when they start to cut back."

Kevin McInerney, a Rolling Meadows contractor who bought $7 worth of lottery tickets during a recent lunch break, said that he's cut back in some areas - eating out at restaurants, for example - but he hasn't yet considered putting his lottery purchases on the chopping block.

"You have to treat yourself to something little once in a while, or you'll go crazy," he said.

From July 1 through Oct. 31, the lottery took in roughly $664 million in sales, an amount that's virtually identical to sales during the same period last year. Sales for all of fiscal year 2008, which ended June 30, approached $2.1 billion, the most ever collected in a single year in the lottery's history.

In other vices, the state's tax take from cigarette sales is $117 million so far this budget year - exactly the same as last year. Liquor tax revenue is up a bit, having increased $1 million, a 1.9 percent increase from last year.

The exception to the relatively stable performance of "sin revenues" is riverboat gambling. From July 1 through Oct. 31, riverboat casinos deposited $65 million fewer dollars in state coffers compared to the same period last year. That's a 26 percent drop. The economy has played a role in the decrease, but the biggest factor is the state smoking ban that took effect this year, according to casino industry officials.

The sin revenues notwithstanding, state leaders are not happy with Illinois' financial picture so far. Overall state revenues for the first four months of this budget year were down $406 million.

In a recent report to lawmakers, their top economic adviser warned things are not looking good.

"There can be little doubt that the U.S. economy is in recession," said Edward H. Boss Jr., the chief economist for the Illinois Commission on Government Forecasting and Accountability.