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By The Associated Press | Friday, April 11, 2003 | (No comments posted.)
SPRINGFIELD, Ill. -- The gaming industry says it not only opposes a plan to help balance the budget through higher casino taxes, but that lowering taxes and expanding gambling could be just the ticket for the cash-strapped state.
Casino owners say the state could get an extra $365 million a year by lowering the tax rate and letting boats add more slot machines.
Horse track owners want lawmakers to allow slot machines at the tracks, generating as much as $450 million a year for the state.
And bar and restaurant owners want to legalize video poker machines in their establishments, netting the state $750 million in new revenue annually. House Speaker Michael Madigan, D-Chicago, said Wednesday that lawmakers should take a "hard look" at that idea.
In his budget speech Wednesday, Gov. Rod Blagojevich proposed bringing in an additional $200 million by raising taxes at the state's nine riverboat casinos.
He wants to change the tax structure so boats pay higher taxes on more money, and he wants to add a 20 percent surcharge on the most profitable casinos. He would also increase the entrance fee at boats from $3 to $5.
The Chicago Democrat says the $2 billion industry should pay higher taxes because it benefits from the state granting monopoly control of a profitable market.
"It is time for them to ante up," Blagojevich said.
He is also banking on the state's inactive 10th casino license to be sold next year, generating another $350 million.
Lawmakers and gambling interests say there are better ways to bring in large sums of cash than raising gambling taxes.
Casinos argue Blagojevich is making a costly mistake by proposing tax increases, after their taxes were raised to help fill the budget hole last year.
They say increased taxes will run boats out of business, send customers to neighboring states and discourage casinos from expanding here. Higher taxes will also dramatically decrease the value of the 10th license, they contend.
"Every time there's a deficit or a problem with state finances, our industry is the one that's at the top of the list to look at," said Tom Swoik, executive director of the Illinois Casino Gaming Association.
Blagojevich has repeatedly maintained he is opposed to expanding gambling in Illinois, although he appeared to soften that stance after the speech.
"I'm not in a position to embrace those ideas now. I would hope that we can balance the budget without going in that direction," Blagojevich said at a news conference.
But legislators are moving ahead.
Committees in both chambers are considering all the expansion ideas. Legislative leaders say it's highly unlikely they can pass a budget without having some new gambling money, since it is a better alternative than general tax increases or big budget cuts.
"This governor has been very clear that he's not for expansion of gambling personally, but we're not down here to do our personal will," said Senate Appropriations Chairman Donne Trotter, D-Chicago.
"We're down here to do the will for the majority of people in this state and whatever is going to get us out of this quagmire."
Gambling proponents say the state's grim financial picture is forcing lawmakers to consider many options they wouldn't ordinarily.
"This is a very, very challenging year," said Ed Duffy, a consultant for the horse tracks. "If the state wasn't in the condition that it's in financially, none of us would be down here."
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