By Jamey Dunn
A sponsor of legislation to expand gambling in the state said he is looking for enough votes to override a potential veto from Gov. Pat Quinn.
Skokie Democratic Rep. Lou Lang sponsored Senate Bill 744, which the General Assembly passed last spring. Senate President John Cullerton used a procedural move to hold the bill to try to negotiate with Quinn. However, Lang said the strategy did not work. “Throughout the summer, there were many meeting held with the governor, but none of those meetings are what you would call negotiations. There was never a point in time that the governor chose to negotiate,” Lang said. “And so we were left with trying to figure out how to handle this.”
During a news conference shortly before veto session began, Quinn said he would veto SB 744 if it were sent to his desk. He also detailed some suggestions for rewriting the bill. He said he supported new casinos but would not go along with allowing slot machines at horse racing tracks. He also raised concerns about the oversight included in the original plan.
Sen. Terry Link, sponsor of SB 744 in his chamber, introduced another bill, SB 747, during the first week of veto session that he said was based on Quinn's suggestions. Quinn came out strongly against Link's proposal, and the plan has not been called for a floor vote.
Lang said he tired to take Quinn’s thoughts — as well as criticisms from Illinois Gaming Board Chairman Aaron Jaffe, newspaper editorial boards and others — into account when drafting a new gaming expansion bill, SB1849. A House committee approved Lang's bill today.
The measure includes slots at horse racing tracks but does not allow for slots at the Illinois State Fairgrounds or Chicago airports. It would reduce the number of gaming positions available to casinos from 2,000 in the original bill to 1,600. They currently are allowed 1,200 positions. The Chicago-owned casino proposed in the plan would be allowed 4,000 positions. Lang said any unused positions at a facility could potentially be transferred to another casino that would use them. “It is in the benefit of our citizens to have all of those positions used.” Lang said that it would be up to the Gaming Board to create the procedure for transferring positions.
SB 1849 does not include a controversial provision that called for the Gaming Board to issue temporary licenses within 60 days of application to bars and restaurants seeking video gaming. The proposal was meant to spur the board to implement video gaming, which was approved as part of the funding for the state’s capital construction plan. So far, no licenses have been issued and no revenue from video gambling has come in.
Lang said some lawmakers were uncomfortable with issuing the temporary licenses. His new bill calls for the board to begin implementing video poker before any new casinos can be licensed and before horse tracks can get a license for a permanent location for slots. However, they would be able to operate out of a temporary facility, such as a tent. Lang said he wanted to ensure that the board did not “skip over” video poker to begin work on a gaming expansion. “That could be one machine, it could be 10,000 machines, but they’ve got to get it up and running.”
Lang said the legislation should clear up concerns about oversight of the Chicago casino. He said the ultimate authority would belong to the Gaming Board. Quinn complained that the city would be allowed too much regulatory leeway under SB 744.
But Lang’s stated goal of finding 71 “yes” votes in the House — enough supporters to override a veto from Quinn — indicates that he is less worried about pleasing the governor with his bill and more concerned with getting as much support from his fellow lawmakers as possible. While Quinn has yet to take a position on the plan, Lang's goal shows that he is anticipating a veto. A spokesperson for Quinn said his administration is “reviewing the proposal.” Quinn has said numerous times that he opposes allowing slots at horse racing tracks. He has said that such a proposal allows for too much gambling in the state and would lead to the cannibalization of business from existing casinos.
Current casinos owners oppose Lang’s plan for that very reason. “We’re not opposed to a casino in Danville. We’re not opposed to a casino in Rockford, Chicago, the Waukegan area. … We are opposed to the facilities right next door to existing casinos,” said Tom Swoik, executive director of the Illinois Casino gaming association. Swoik said casino owners are not opposed to expansion as long as it is “reasonable” and in “new market areas.”
He added: “The state isn’t going to get the kind of money that they think they are going to get out of this. We’re just transferring gamblers from one area to another.”
But Lang said the bill would bring in roughly $1 billion in licensing fees in addition to future revenues from taxes paid by casinos and racetracks. “I think we’ve made a very good piece of legislation better; one that will raise billions of dollars for the state, one that will pay our old bills,” Lang said. “At a time when our unemployment rate has reached 10 percent, this is something that we must do.”
He said finding the backing for a veto proof majority is “not going to be easy,” and he is not above exploiting recent rifts between the governor and the legislature to rally the votes he needs. “I will use any legal means to get a veto proof majority to pass this bill.” He said Quinn’s proposal to close state facilities, his comments implying that campaign contributions influenced votes to override his veto on a smart grid plan and his refusal to negotiate about gaming caused some animosity toward the governor among lawmakers. “I think when the governor announced two weeks ago that he was not in favor of slot machines at racetracks, it made some people very angry. … I’m going to go to those legislators, and I’m going to get them angry.”
Lang said he hopes to call his bill for a floor vote tomorrow.
Showing posts with label video gaming. Show all posts
Showing posts with label video gaming. Show all posts
Tuesday, November 08, 2011
Tuesday, November 01, 2011
Quinn: Gaming negotiations aren't taking place
By Jamey Dunn
Gov. Pat Quinn said today that he is not negotiating when it comes to a gaming expansion in Illinois.
Quinn told reporters in Chicago today that lawmakers who want more gambling in the state have two options: Pass a bill based on his ideas; or send him the bill they passed last spring. “I’d be happy to take it, veto out the defects and flaws and put in the good important things and send it back to them,” Quinn said. In the hopes of working out a plan that Quinn and lawmakers could live with, Senate President John Cullerton used a parliamentary procedure to hold the bill from going to the governor’s desk. But when asked today if he was working on a compromise with lawmakers, Quinn said, “I don’t think the word negotiate is appropriate.”
He reiterated his call for Cullerton to send Senate Bill 744 to his desk. “This is rather unusual, to say the least, if you believe in what you voted for. Now if they want to send it to me, we’ll be very happy to apply my framework to their bill. And my framework will emphasize integrity and honesty.”
Quinn said he would support five new casinos but could not back allowing horse racing tracks to have slot machines. He said he wants more oversight of the proposed Chicago casino and he wants an option that would require local governments to opt into legalizing video gaming in some bars and restaurants. Legalized video gaming is one of the founding sources of funding for the state’s capital construction program. Quinn’s proposal would likely reduce potential revenues once the program was implemented. Quinn also wants to give the gaming board unlimited time to vet businesses owners seeking to offer video gaming. SB744 allows for probationary licenses for applicants 60 days after they apply.
Sen. Terry Link presented a bill during the first week of veto session that he says is based on the governor’s ideas. The governor did not agree. “The bill was not our framework," Quinn said today. "Charades and playing games on any subject are inappropriate, in my opinion. The legislature should be serious about its work. They tried to do a kind of a charade their last week, and we called them out on it.”
Link, who also sponsors SB744, said today that he has tried to pass a gaming expansion for years and has backed several different versions of the idea. “These we’re his ideas; these were his thoughts,” he said about the governor. “We weren’t trying to do a charade. We were trying to see if there was a will out there for this [to pass in the legislature. The point is that we’ve tried different ways — with or without the track, with the casinos owning the slots at the tracks. … We’ve tried every which way you could conceivably think of.”
Link, a Waukegan Democrat, said he held the bill, SB747, from a floor vote last week at Quinn's request. “The governor called and didn’t want it and [said] he wants to talk.” But Link said that meeting has not materialized. ‘We have done everything in our power to try to set up [meetings] and discuss these things. I just hope that the governor doesn’t get to this point where he wants to draw a line in the sand.”
Quinn explained today that while he is “open-minded” about gaming, it is not a priority for him.
“It is up to the legislature,” Quinn said. “My interest is not to promote gambling. That is not my foremost goal in Illinois. I don’t think you can gamble your way to prosperity.”
Gov. Pat Quinn said today that he is not negotiating when it comes to a gaming expansion in Illinois.
Quinn told reporters in Chicago today that lawmakers who want more gambling in the state have two options: Pass a bill based on his ideas; or send him the bill they passed last spring. “I’d be happy to take it, veto out the defects and flaws and put in the good important things and send it back to them,” Quinn said. In the hopes of working out a plan that Quinn and lawmakers could live with, Senate President John Cullerton used a parliamentary procedure to hold the bill from going to the governor’s desk. But when asked today if he was working on a compromise with lawmakers, Quinn said, “I don’t think the word negotiate is appropriate.”
He reiterated his call for Cullerton to send Senate Bill 744 to his desk. “This is rather unusual, to say the least, if you believe in what you voted for. Now if they want to send it to me, we’ll be very happy to apply my framework to their bill. And my framework will emphasize integrity and honesty.”
Quinn said he would support five new casinos but could not back allowing horse racing tracks to have slot machines. He said he wants more oversight of the proposed Chicago casino and he wants an option that would require local governments to opt into legalizing video gaming in some bars and restaurants. Legalized video gaming is one of the founding sources of funding for the state’s capital construction program. Quinn’s proposal would likely reduce potential revenues once the program was implemented. Quinn also wants to give the gaming board unlimited time to vet businesses owners seeking to offer video gaming. SB744 allows for probationary licenses for applicants 60 days after they apply.
Sen. Terry Link presented a bill during the first week of veto session that he says is based on the governor’s ideas. The governor did not agree. “The bill was not our framework," Quinn said today. "Charades and playing games on any subject are inappropriate, in my opinion. The legislature should be serious about its work. They tried to do a kind of a charade their last week, and we called them out on it.”
Link, who also sponsors SB744, said today that he has tried to pass a gaming expansion for years and has backed several different versions of the idea. “These we’re his ideas; these were his thoughts,” he said about the governor. “We weren’t trying to do a charade. We were trying to see if there was a will out there for this [to pass in the legislature. The point is that we’ve tried different ways — with or without the track, with the casinos owning the slots at the tracks. … We’ve tried every which way you could conceivably think of.”
Link, a Waukegan Democrat, said he held the bill, SB747, from a floor vote last week at Quinn's request. “The governor called and didn’t want it and [said] he wants to talk.” But Link said that meeting has not materialized. ‘We have done everything in our power to try to set up [meetings] and discuss these things. I just hope that the governor doesn’t get to this point where he wants to draw a line in the sand.”
Quinn explained today that while he is “open-minded” about gaming, it is not a priority for him.
“It is up to the legislature,” Quinn said. “My interest is not to promote gambling. That is not my foremost goal in Illinois. I don’t think you can gamble your way to prosperity.”
Friday, October 21, 2011
Veto session preview
By Jamey Dunn
Illinois lawmakers will likely have a busy veto session as they consider two industry changing plans opposed by Gov. Pat Quinn, components of a budget that Quinn says is forcing him to close several state facilities and other potentially hot button issues.
“The agenda is pretty full. It’s really kind of the fall legislative sessions these days rather than a veto session,” said Kent Redfield, an emeritus political science professor at the University of Illinois Springfield. Several committee hearings are scheduled for Monday, and the session will runs Tuesday through Thursday. It will resume November 8, with an adjournment date scheduled for November 10.
Gaming
Gov. Pat Quinn laid out what he would like to see changed in the gaming expansion package that lawmakers passed at the end of the spring legislative session. Senate President John Cullerton still has a procedural hold on Senate Bill 744, so Quinn has been unable to do anything but present his list of demands. Skokie Democratic Rep. Lou Lang and Waukegan Democratic Sen. Terry Link, the sponsors of the bill, have been pushing Quinn all summer for specifics on what he wants. When he finally gave them this week, the sponsors seemed less than thrilled. Lang and Link agree that if they drafted Quinn’s plan into a bill, they couldn’t scrape up the votes to pass it.
The governor wants to remove a provision that would allow slot machines at horse racing tracks. He does support the addition of five new casinos, including one owned by the city of Chicago. He also wants to add a measure to address legalization of video poker in some bars and restaurants across the state. When video poker was approved as part of the funding plan for the capital construction bill, Quinn supported allowing local governments to opt out of having it in their area. Now, he wants local officials to vote to opt it if they want video poker. So far, the Illinois Gaming Board has not issued any video poker licenses, and the plan has not generated any revenue for the state. Quinn also wants to take tax breaks out of the bill, which are a sweetener for existing casinos. His plan also calls for a ban on campaign contributions from those holding gaming licenses or managing a casino.
Supporters of the gaming expansion say they are working on a trailer bill with changes that they hope will appease Quinn and say they plan to roll it out in a committee hearing early next week. They say they cannot pass legislation that does not include slots at the racetracks. Quinn said he will not sign a bill that does, and he has also vowed to veto SB 744 if it is sent to him — making the plan to fix the situation with a trailer bill that would tack changes onto the original legislation a shaky prospect. “Somebody may figure out how to pull a rabbit out of a hat that makes Quinn, and [Chicago Mayor Rahm] Emanuel, and downstate [lawmakers] and the horse racing people happy,” said Redfield. “But it would be a neat trick.”
For more on video poker and the challenges it has faced getting off the ground, see Illinois Issues April 2010.
Smart grid
Sponsors of a Senate Bill 1652, which would allow the state’s two biggest utility companies to increase customers’ rates in exchange for investments in the state's electric grid have said they will try to drum up enough votes to override Quinn’s veto. Supporters say smart grid technology will create jobs, make service more reliable and help some customers save money by allowing them to monitor their usage.
Opposition to the bill includes AARP; the Citizens Utility Board, which is a consumer advocacy group started by Quinn; and Attorney General Lisa Madigan. Quinn has appealed to the public and even set up a website encouraging people to call their lawmakers and tell them to vote against the bill. Quinn and others say it was written by Ameren and Commonwealth Edison lobbyists as a way to lock in the utilities’ profits. “It seems to me that the governor has a right to set up a media campaign and hire lobbyists and do everything that he’s doing,” said Sen. Mike Jacobs, an East Moline Democrat and sponsor of SB1652. “But at the end of the day, this comes down to the question, do you want a smart grid or don’t you?”
Lawmakers backing the legislation say they are working on a trailer bill to tighten up customer service and reliability requirements in the hopes of getting some fence sitters’ votes to keep the plan alive. Expect heavy lobbying and public relations efforts on both sides of the issue.
For more on smart grid technology and its potential public policy implications, see Illinois Issues July/August 2011.
Budget
Hearings are under way throughout the state about the potential closure of seven state facilities. Quinn announced last month his plans to close the institutions and lay off more than 1,900 state employees. The governor said the budget lawmakers approved in the spring would not fully find state operations, so the facilities must be shuttered to shift money to the core services of the state. Quinn is calling on lawmakers to approve his budget vetoes, many of which, such as a cut to school transportation budget, are generally unpopular with legislators. Quinn is also reportedly working up a list of budget tweaks and cuts he would like to see restored.
Some school officials are looking to lawmakers to find a way for them to get paid. Quinn cut money for the salaries of regional superintendents. The majority of them stayed on the job and have not seen a paycheck since June. Quinn said that local governments should pay them and has a bill in the works to shift the cost. The Illinois Municipal League opposes dipping into local funds. Lawmakers could also vote to override the governor’s veto and restore the money to the state budget. Regional superintendents say they do not prefer one plan over they other; they just want to get paid.
Legislative scholarships
Quinn used his veto pen to try to end a program that has been a source of controversy and scandal for years, but it is unlikely that his changes will ever see the light of day.
Quinn took a bill that would have barred lawmakers from giving scholarships to family members and rewrote it to end the program altogether. He has the support of the bill’s sponsors and has been publicly calling on lawmakers to end the program. However, House Speaker Michael Madigan said Quinn overstepped his constitutional authority, and it is unlikely that the speaker will call the veto for a vote. If no vote is taken, Quinn’s changes and the underlying legislation would die.
Lang, a longtime member of House Democratic leadership, said Madigan has historically been opposed to allowing governors to use their veto pens to make broad changes in the legislation that lands on their desks. “Even if he likes the changes, he has not allowed those bills to be called to a vote because they violate the Constitution.”
Other critical pieces of legislation may come up for a vote in the short time that lawmakers are scheduled to be in session. Legislators may consider a bill that would create the state’s insurance exchange, an online marketplace that is meant to drive down the cost of insurance by encouraging competition. Such exchanges are a key component of the new federal health care reform law. Legislators may also consider a controversial bill that would bring the state in line with a federal plan regarding the punishment and tracking of sex offenders. For more on those topics, see Illinois Issues September 2011 and Illinois Issues blog. Pension reform working groups that include Madigan and House Minority Leader Tom Cross have been meeting throughout the summer and could potentially produce a bill. For more on the two sides of the pension debate, see this month's Illinois Issues. Cross backed a bill that would diminish benefits for employees hired before other changes to benefits went into effect in January, but it lacked the needed support in the House. “Most people I talk to would be really surprised if [Cross’ plan] moved in the House [during veto session.] Other than if the speaker really just got tired of doing all this and puts it out there so it won’t pass,” Redfield said.
He added: “There are a lot of very heavyweight things to be dealing with. And there’s the context of the budget. … They may not ultimately do anything, but they do have a lot on their plate.”
For more on veto session, see this month’s Illinois Issues.
Illinois lawmakers will likely have a busy veto session as they consider two industry changing plans opposed by Gov. Pat Quinn, components of a budget that Quinn says is forcing him to close several state facilities and other potentially hot button issues.
“The agenda is pretty full. It’s really kind of the fall legislative sessions these days rather than a veto session,” said Kent Redfield, an emeritus political science professor at the University of Illinois Springfield. Several committee hearings are scheduled for Monday, and the session will runs Tuesday through Thursday. It will resume November 8, with an adjournment date scheduled for November 10.
Gaming
Gov. Pat Quinn laid out what he would like to see changed in the gaming expansion package that lawmakers passed at the end of the spring legislative session. Senate President John Cullerton still has a procedural hold on Senate Bill 744, so Quinn has been unable to do anything but present his list of demands. Skokie Democratic Rep. Lou Lang and Waukegan Democratic Sen. Terry Link, the sponsors of the bill, have been pushing Quinn all summer for specifics on what he wants. When he finally gave them this week, the sponsors seemed less than thrilled. Lang and Link agree that if they drafted Quinn’s plan into a bill, they couldn’t scrape up the votes to pass it.
The governor wants to remove a provision that would allow slot machines at horse racing tracks. He does support the addition of five new casinos, including one owned by the city of Chicago. He also wants to add a measure to address legalization of video poker in some bars and restaurants across the state. When video poker was approved as part of the funding plan for the capital construction bill, Quinn supported allowing local governments to opt out of having it in their area. Now, he wants local officials to vote to opt it if they want video poker. So far, the Illinois Gaming Board has not issued any video poker licenses, and the plan has not generated any revenue for the state. Quinn also wants to take tax breaks out of the bill, which are a sweetener for existing casinos. His plan also calls for a ban on campaign contributions from those holding gaming licenses or managing a casino.
Supporters of the gaming expansion say they are working on a trailer bill with changes that they hope will appease Quinn and say they plan to roll it out in a committee hearing early next week. They say they cannot pass legislation that does not include slots at the racetracks. Quinn said he will not sign a bill that does, and he has also vowed to veto SB 744 if it is sent to him — making the plan to fix the situation with a trailer bill that would tack changes onto the original legislation a shaky prospect. “Somebody may figure out how to pull a rabbit out of a hat that makes Quinn, and [Chicago Mayor Rahm] Emanuel, and downstate [lawmakers] and the horse racing people happy,” said Redfield. “But it would be a neat trick.”
For more on video poker and the challenges it has faced getting off the ground, see Illinois Issues April 2010.
Smart grid
Sponsors of a Senate Bill 1652, which would allow the state’s two biggest utility companies to increase customers’ rates in exchange for investments in the state's electric grid have said they will try to drum up enough votes to override Quinn’s veto. Supporters say smart grid technology will create jobs, make service more reliable and help some customers save money by allowing them to monitor their usage.
Opposition to the bill includes AARP; the Citizens Utility Board, which is a consumer advocacy group started by Quinn; and Attorney General Lisa Madigan. Quinn has appealed to the public and even set up a website encouraging people to call their lawmakers and tell them to vote against the bill. Quinn and others say it was written by Ameren and Commonwealth Edison lobbyists as a way to lock in the utilities’ profits. “It seems to me that the governor has a right to set up a media campaign and hire lobbyists and do everything that he’s doing,” said Sen. Mike Jacobs, an East Moline Democrat and sponsor of SB1652. “But at the end of the day, this comes down to the question, do you want a smart grid or don’t you?”
Lawmakers backing the legislation say they are working on a trailer bill to tighten up customer service and reliability requirements in the hopes of getting some fence sitters’ votes to keep the plan alive. Expect heavy lobbying and public relations efforts on both sides of the issue.
For more on smart grid technology and its potential public policy implications, see Illinois Issues July/August 2011.
Budget
Hearings are under way throughout the state about the potential closure of seven state facilities. Quinn announced last month his plans to close the institutions and lay off more than 1,900 state employees. The governor said the budget lawmakers approved in the spring would not fully find state operations, so the facilities must be shuttered to shift money to the core services of the state. Quinn is calling on lawmakers to approve his budget vetoes, many of which, such as a cut to school transportation budget, are generally unpopular with legislators. Quinn is also reportedly working up a list of budget tweaks and cuts he would like to see restored.
Some school officials are looking to lawmakers to find a way for them to get paid. Quinn cut money for the salaries of regional superintendents. The majority of them stayed on the job and have not seen a paycheck since June. Quinn said that local governments should pay them and has a bill in the works to shift the cost. The Illinois Municipal League opposes dipping into local funds. Lawmakers could also vote to override the governor’s veto and restore the money to the state budget. Regional superintendents say they do not prefer one plan over they other; they just want to get paid.
Legislative scholarships
Quinn used his veto pen to try to end a program that has been a source of controversy and scandal for years, but it is unlikely that his changes will ever see the light of day.
Quinn took a bill that would have barred lawmakers from giving scholarships to family members and rewrote it to end the program altogether. He has the support of the bill’s sponsors and has been publicly calling on lawmakers to end the program. However, House Speaker Michael Madigan said Quinn overstepped his constitutional authority, and it is unlikely that the speaker will call the veto for a vote. If no vote is taken, Quinn’s changes and the underlying legislation would die.
Lang, a longtime member of House Democratic leadership, said Madigan has historically been opposed to allowing governors to use their veto pens to make broad changes in the legislation that lands on their desks. “Even if he likes the changes, he has not allowed those bills to be called to a vote because they violate the Constitution.”
Other critical pieces of legislation may come up for a vote in the short time that lawmakers are scheduled to be in session. Legislators may consider a bill that would create the state’s insurance exchange, an online marketplace that is meant to drive down the cost of insurance by encouraging competition. Such exchanges are a key component of the new federal health care reform law. Legislators may also consider a controversial bill that would bring the state in line with a federal plan regarding the punishment and tracking of sex offenders. For more on those topics, see Illinois Issues September 2011 and Illinois Issues blog. Pension reform working groups that include Madigan and House Minority Leader Tom Cross have been meeting throughout the summer and could potentially produce a bill. For more on the two sides of the pension debate, see this month's Illinois Issues. Cross backed a bill that would diminish benefits for employees hired before other changes to benefits went into effect in January, but it lacked the needed support in the House. “Most people I talk to would be really surprised if [Cross’ plan] moved in the House [during veto session.] Other than if the speaker really just got tired of doing all this and puts it out there so it won’t pass,” Redfield said.
He added: “There are a lot of very heavyweight things to be dealing with. And there’s the context of the budget. … They may not ultimately do anything, but they do have a lot on their plate.”
For more on veto session, see this month’s Illinois Issues.
Monday, October 17, 2011
Quinn vows to veto gaming plan, but supporters still seek a deal
By Jamey Dunn
Gov. Pat Quinn wants lawmakers to start over with new gaming legislation, but backers of the gambling expansion that passed last spring are not ready to walk away from the bill.
“I think it was done in a hasty manner, and it has major flaws. That’s why I will veto it,” Quinn said about Senate Bill 744 at a Chicago news conference today. The governor presented sweeping changes that he says he would like to see drafted into a new bill. “I think members of the General Assembly realize it’s not exactly a masterpiece. It has a lot of shortcomings. It needs fundamental improvement. It’s better to go back and start over and do it right.”
Perhaps the most controversial part of the governor’s plan is his opposition to slot machines at horse racing tracks. Instead he said he would only back the five new casinos called for in SB 744. Quinn also shot down slots at the state fairgrounds and Chicago airports. “We … cannot have the massive expansion of gambling envisioned by this bill. A smaller and more target expansion is the way to go,” Quinn said. “The bottom line is, in the metropolitan area of Chicago, instead of having nine new casino gaming operations, there would only be three — Chicago, Lake County, southern Cook [County.] Downstate, instead of having five new casino gaming operations, there would be two — Rockford, Danville.” Quinn said he is concerned about oversaturation of the gambling market. “If folks are leaving our state to gamble, the locations that I’ve selected are right in the area[s] where people are most likely to leave. … There’s a limit to how many dollars can be spent on gambling in the first place. Our current casinos have seen a decline in revenues — rather significant.”
Quinn also called for a tweak to implementing video poker, which was legalized at some bars and restaurants statewide as part of the capital construction plan passed in 2009. While local governments can now opt out of allowing video poker machines, Quinn wants local officials to have to vote to accept video gaming instead. The Illinois Gaming Board has yet to issue any licenses to businesses seeking to offer video poker, and the plan has brought in no revenue. SB 744 would require the board to begin issuing provisional licenses, but Quinn said the gaming board should be allowed to work on its own timetable. He also complained that the proposed timeline for issuing new casino licenses would be too rushed. “I think that gaming board should act after it’s done all its work and feels that it’s complete.”
Quinn said that the gaming expansion plan would not direct enough money to schools and construction. He added that the plan’s tax breaks for casinos were too generous. “We do not need excessive tax breaks for lucrative casinos.” While the legislation calls for revenues that state would receive from new casino licenses to be paid over time, Quinn wants the money upfront to spend on the state’s overdue bills.
Despite Quinn’s vow to veto SB 744, supporters say they are still working on a trailer bill with changes in the hopes of reaching a compromise. Waukegan Democratic Sen. Terry Link is optimistic about working out a deal. “I think that we addressed [in the trailer bill] a lot of the concerns that the governor addressed in his statement today, even though we didn’t know about it,” Link said. “We’re probably not a mile apart, but we’re maybe a half of a mile to a quarter of a mile.”
Link, who sponsored SB 744, did take issue with Quinn’s plan to assign some casinos to cities, while leaving the locations in Lake County and southern Cook County up for grabs. “Some he’s designating and some he’s not, and I think it’s ridiculous.” Quinn said that opening up the licenses for bidders in the two areas would likely pay off in more revenues for the state. “I think the gaming board should choose the location in Lake County. I think the gaming board should pick the location in southern Cook County. There will be, I think, robust competition in both of those locations for a site for gambling.” However, Quinn may be open to compromise about the locations. He made previous negative statements about a Danville casino but ultimately included it in his plan. “I said ‘Don’t hold your breath.’ Well, they’re breathing now,” he said today.
Link also said it would be difficult to pass a plan that doesn’t include slot machines at horse racing tracks and that slots at the tracks are included in the working version of a trailer bill. “No, we did not take slots away from the tracks because we don’t think the bill will sail out of the General Assembly if we did that. It will have a hard time.” Sponsors sold the bill as a way to help the state’s struggling horse racing industry. Tony Somone, executive director of the Illinois Harness Horsemen’s Association, said that under Quinn’s proposals, “harness racing in Illinois in two years would look very, very different. And I am confident that within three to five years, it would not exist.”
Current casino operators may see Quinn’s suggestions as a favorable shift and an opportunity to get back to the negotiating table. “It certainly is reflective of many of our concerns about the size of expansion,” said Tom Swoik, executive director of the Illinois Casino Gaming Association. “We’re not against expansion … as long as it’s done reasonably.”He said he thought Quinn’s plan was “well-thought-out” but said it was difficult to judge because it has not been drafted into legislation. Swoik said he hoped the governor’s reservations about expansion and cannibalization of current casinos would make current owners' interests heard in the debate that is sure to come over the next few weeks. As for the trailer bill, he said, “To my knowledge we have had not input into the bill, which is sort of distressing.”
Skokie Democratic Rep. Lou Lang, the House sponsor of SB 744, said it is not up to lawmakers or Quinn to make sure that casinos’ profits are protected. “We should not care as a government which gaming enterprise makes money, as long as we as a state make more money.” Lang agreed that a trailer bill would be the simplest solution. “It would be very difficult to put the coalition together necessary to get the votes to pass [a gaming bill] again.”
Both Lang and Link said they have not ruled out creating a new bill if Quinn cannot be persuaded to sign the original legislation and a trailer bill. Link, who has been pushing various gaming expansion packages in the Senate for years, said Quinn’s statements that the legislation was rushed and ill-conceived are wrong. “He never sat down with us and questioned why we did some of the stuff. We didn’t just pull this stuff out of the clear blue sky,” Link said. “It’s easy to tear it apart if you don’t understand it.”
Senate President John Cullerton is sponsoring Senate Bill 747, which his office has identified as the vehicle for a trailer bill. “Now that the governor has articulated his proposed changes, we will fold his recommendations into our ongoing discussion of how we can make the gaming bill better for the state. Additionally, we will be evaluating the governor's framework in light of what is passable by both chambers of the General Assembly,” Cullerton said in a prepared statement. Those following the issue closely say they expect the legislation to be filed publicly soon, possibly as early as tomorrow.
While supporters have said they want a resolution on the gaming bill by the end of the legislature's fall veto session, which is scheduled to start next week, Quinn said he doesn’t mind waiting. “If it takes longer, so be it. If they have to take a longer period of time in order to do their work. I think it’s better to do it right the first time so we don’t have problems,” he said. “The bottom line is, I’m the goalie. I’m the final word.”
Gov. Pat Quinn wants lawmakers to start over with new gaming legislation, but backers of the gambling expansion that passed last spring are not ready to walk away from the bill.
“I think it was done in a hasty manner, and it has major flaws. That’s why I will veto it,” Quinn said about Senate Bill 744 at a Chicago news conference today. The governor presented sweeping changes that he says he would like to see drafted into a new bill. “I think members of the General Assembly realize it’s not exactly a masterpiece. It has a lot of shortcomings. It needs fundamental improvement. It’s better to go back and start over and do it right.”
Perhaps the most controversial part of the governor’s plan is his opposition to slot machines at horse racing tracks. Instead he said he would only back the five new casinos called for in SB 744. Quinn also shot down slots at the state fairgrounds and Chicago airports. “We … cannot have the massive expansion of gambling envisioned by this bill. A smaller and more target expansion is the way to go,” Quinn said. “The bottom line is, in the metropolitan area of Chicago, instead of having nine new casino gaming operations, there would only be three — Chicago, Lake County, southern Cook [County.] Downstate, instead of having five new casino gaming operations, there would be two — Rockford, Danville.” Quinn said he is concerned about oversaturation of the gambling market. “If folks are leaving our state to gamble, the locations that I’ve selected are right in the area[s] where people are most likely to leave. … There’s a limit to how many dollars can be spent on gambling in the first place. Our current casinos have seen a decline in revenues — rather significant.”
Quinn also called for a tweak to implementing video poker, which was legalized at some bars and restaurants statewide as part of the capital construction plan passed in 2009. While local governments can now opt out of allowing video poker machines, Quinn wants local officials to have to vote to accept video gaming instead. The Illinois Gaming Board has yet to issue any licenses to businesses seeking to offer video poker, and the plan has brought in no revenue. SB 744 would require the board to begin issuing provisional licenses, but Quinn said the gaming board should be allowed to work on its own timetable. He also complained that the proposed timeline for issuing new casino licenses would be too rushed. “I think that gaming board should act after it’s done all its work and feels that it’s complete.”
Quinn said that the gaming expansion plan would not direct enough money to schools and construction. He added that the plan’s tax breaks for casinos were too generous. “We do not need excessive tax breaks for lucrative casinos.” While the legislation calls for revenues that state would receive from new casino licenses to be paid over time, Quinn wants the money upfront to spend on the state’s overdue bills.
Despite Quinn’s vow to veto SB 744, supporters say they are still working on a trailer bill with changes in the hopes of reaching a compromise. Waukegan Democratic Sen. Terry Link is optimistic about working out a deal. “I think that we addressed [in the trailer bill] a lot of the concerns that the governor addressed in his statement today, even though we didn’t know about it,” Link said. “We’re probably not a mile apart, but we’re maybe a half of a mile to a quarter of a mile.”
Link, who sponsored SB 744, did take issue with Quinn’s plan to assign some casinos to cities, while leaving the locations in Lake County and southern Cook County up for grabs. “Some he’s designating and some he’s not, and I think it’s ridiculous.” Quinn said that opening up the licenses for bidders in the two areas would likely pay off in more revenues for the state. “I think the gaming board should choose the location in Lake County. I think the gaming board should pick the location in southern Cook County. There will be, I think, robust competition in both of those locations for a site for gambling.” However, Quinn may be open to compromise about the locations. He made previous negative statements about a Danville casino but ultimately included it in his plan. “I said ‘Don’t hold your breath.’ Well, they’re breathing now,” he said today.
Link also said it would be difficult to pass a plan that doesn’t include slot machines at horse racing tracks and that slots at the tracks are included in the working version of a trailer bill. “No, we did not take slots away from the tracks because we don’t think the bill will sail out of the General Assembly if we did that. It will have a hard time.” Sponsors sold the bill as a way to help the state’s struggling horse racing industry. Tony Somone, executive director of the Illinois Harness Horsemen’s Association, said that under Quinn’s proposals, “harness racing in Illinois in two years would look very, very different. And I am confident that within three to five years, it would not exist.”
Current casino operators may see Quinn’s suggestions as a favorable shift and an opportunity to get back to the negotiating table. “It certainly is reflective of many of our concerns about the size of expansion,” said Tom Swoik, executive director of the Illinois Casino Gaming Association. “We’re not against expansion … as long as it’s done reasonably.”He said he thought Quinn’s plan was “well-thought-out” but said it was difficult to judge because it has not been drafted into legislation. Swoik said he hoped the governor’s reservations about expansion and cannibalization of current casinos would make current owners' interests heard in the debate that is sure to come over the next few weeks. As for the trailer bill, he said, “To my knowledge we have had not input into the bill, which is sort of distressing.”
Skokie Democratic Rep. Lou Lang, the House sponsor of SB 744, said it is not up to lawmakers or Quinn to make sure that casinos’ profits are protected. “We should not care as a government which gaming enterprise makes money, as long as we as a state make more money.” Lang agreed that a trailer bill would be the simplest solution. “It would be very difficult to put the coalition together necessary to get the votes to pass [a gaming bill] again.”
Both Lang and Link said they have not ruled out creating a new bill if Quinn cannot be persuaded to sign the original legislation and a trailer bill. Link, who has been pushing various gaming expansion packages in the Senate for years, said Quinn’s statements that the legislation was rushed and ill-conceived are wrong. “He never sat down with us and questioned why we did some of the stuff. We didn’t just pull this stuff out of the clear blue sky,” Link said. “It’s easy to tear it apart if you don’t understand it.”
Senate President John Cullerton is sponsoring Senate Bill 747, which his office has identified as the vehicle for a trailer bill. “Now that the governor has articulated his proposed changes, we will fold his recommendations into our ongoing discussion of how we can make the gaming bill better for the state. Additionally, we will be evaluating the governor's framework in light of what is passable by both chambers of the General Assembly,” Cullerton said in a prepared statement. Those following the issue closely say they expect the legislation to be filed publicly soon, possibly as early as tomorrow.
While supporters have said they want a resolution on the gaming bill by the end of the legislature's fall veto session, which is scheduled to start next week, Quinn said he doesn’t mind waiting. “If it takes longer, so be it. If they have to take a longer period of time in order to do their work. I think it’s better to do it right the first time so we don’t have problems,” he said. “The bottom line is, I’m the goalie. I’m the final word.”
Tuesday, October 11, 2011
Gaming revenues down as Quinn continues to mull expansion
By Jamey Dunn
A legislative commission report paints a bleak picture for Illinois gaming revenues, and Gov. Pat Quinn says he plans to have specifics by the end of the month on what he wants for a gambling expansion bill.
The Commission on Government Forecasting and Accountability released a report that says total gaming revenues for the state in 2011 reached their lowest level since 2001. The state's take of riverboat, horse racing and lottery revenues for last fiscal year was about $1 billion.
Revenue for riverboat gambling decreased by almost 6 percent from Fiscal Year 2010 and made up almost 34 percent of total gaming revenues. Four years ago, riverboats contributed about 52 percent of gaming revenues. The report said revenues from riverboats are at the lowest since FY 1999.
The report pointed to the economic downturn and increased competition from neighboring states as possible causes for the drop. However, the numbers continue to suggest that the biggest contributor to the drop in Illinois casino revenues is the indoor smoking ban. “Since the indoor smoking ban began in January 2008, adjusted gross receipts for Illinois riverboats have fallen a combined 30.7 percent from pre-smoking-ban levels,” the report stated.
COGFA’s report also warned against expecting consistent revenue increases under a gaming expansion plan that will be a topic of debate during the legislature's fall veto session. “Many estimate a significant amount of one-time revenues and recurring revenues would come from gaming expansion. However, factors such as a reduced tax rate and cannibalization will make it challenging for substantial amounts of new state revenues to be realized. Lowering the tax rates would likely increase the amount spent by gaming operators on the casino[s], which, history has shown, could lead to higher attendance. … But large increases in overall adjusted gross receipts will be necessary to offset the loss of revenues from the lower tax rates and from the expected loss of revenues from existing gaming facilities that would be cannibalized by the new casinos.” The report estimates that revenues from legalizing video poker in some bars and restaurants across the state would not start coming until "FY2013 at the earliest." The state has been dragging its feet getting the licensing process off the ground and had to rebid a contract for a necessary computer system because of mathematical errors made when totaling costs associated with bids.
Quinn again pointed to fears of saturating the gaming market as he talked to reporters in Chicago today about the gaming expansion passed by the legislature last spring. “I just think it’s top heavy, I’ve said that all along. You can’t over-saturate the gambling market in metro Chicago or anywhere else. If you have too many positions and casinos, they hurt each other, and they don’t really add to the revenue. And I don’t think the people really want our state to become the Las Vegas of the Midwest.” Quinn has voiced support for a provision of the bill that calls for the creation of a casino owned by the city of Chicago.
Meanwhile, lawmakers have said negotiating with Quinn over Senate Bill 744, which would allow for slot machines at horse racing tracks, as well as five new casinos, have been difficult because Quinn won’t say what he wants. Quinn countered today that legislators have not been specific about changes they are willing to make. “I haven’t seen anything specific or tangible from the legislature. All I know is what they did on May 31.” He said he would release specific changes he would like see “later this month.”
Senate President John Cullerton put a procedural hold on the bill in the hopes of negotiating with Quinn. The governor has pointed to that move as an indicator that the plan is flawed. “Obviously they know they have some defects there, because they haven’t sent it my way,” Quinn said. He added, “obviously they’re afraid of my review, and I think they should be.”
Skokie Democratic Rep. Lou Lang, a sponsor of SB 744, said he expects the fate of the expansion will be decided one way or another when lawmakers return later this month. “The plan would be to have some finality to this gaming issue during veto session.” Cullerton backed a plan to draft a so-called trailer bill that would make changes to the original legislation and then send both bills to the governor to be signed at the same time. “I’ve been pushing for a trailer bill. … It would be very tough to pass a new gaming bill or an amended gaming bill that makes substantial changes,” Lang told Illinois Issues.
But Quinn came out strong today against reworking the plan with a trailer bill. “They have a bill. If they don’t think the bill is good enough, they should go back to the drawing board and pass another bill that’s better,” Quinn said. “Do it right the first time. If it’s not right the first time, it’s got to go in the reject pile, and [lawmakers have] got to go back to the drawing board.” When asked if he would veto SB 744, if given the chance, Quinn said, “I think anybody with common sense, if they saw that [bill], would probably throw up their hands in shock and disbelief that we would have gambling expansion in Illinois without proper oversight.”
For more on video poker and the challenges the state faces in implementing it, see Illinois Issues April 2010.
For more on the upcoming veto session, see Illinois Issues October 2011.
A legislative commission report paints a bleak picture for Illinois gaming revenues, and Gov. Pat Quinn says he plans to have specifics by the end of the month on what he wants for a gambling expansion bill.
The Commission on Government Forecasting and Accountability released a report that says total gaming revenues for the state in 2011 reached their lowest level since 2001. The state's take of riverboat, horse racing and lottery revenues for last fiscal year was about $1 billion.
Revenue for riverboat gambling decreased by almost 6 percent from Fiscal Year 2010 and made up almost 34 percent of total gaming revenues. Four years ago, riverboats contributed about 52 percent of gaming revenues. The report said revenues from riverboats are at the lowest since FY 1999.
The report pointed to the economic downturn and increased competition from neighboring states as possible causes for the drop. However, the numbers continue to suggest that the biggest contributor to the drop in Illinois casino revenues is the indoor smoking ban. “Since the indoor smoking ban began in January 2008, adjusted gross receipts for Illinois riverboats have fallen a combined 30.7 percent from pre-smoking-ban levels,” the report stated.
COGFA’s report also warned against expecting consistent revenue increases under a gaming expansion plan that will be a topic of debate during the legislature's fall veto session. “Many estimate a significant amount of one-time revenues and recurring revenues would come from gaming expansion. However, factors such as a reduced tax rate and cannibalization will make it challenging for substantial amounts of new state revenues to be realized. Lowering the tax rates would likely increase the amount spent by gaming operators on the casino[s], which, history has shown, could lead to higher attendance. … But large increases in overall adjusted gross receipts will be necessary to offset the loss of revenues from the lower tax rates and from the expected loss of revenues from existing gaming facilities that would be cannibalized by the new casinos.” The report estimates that revenues from legalizing video poker in some bars and restaurants across the state would not start coming until "FY2013 at the earliest." The state has been dragging its feet getting the licensing process off the ground and had to rebid a contract for a necessary computer system because of mathematical errors made when totaling costs associated with bids.
Quinn again pointed to fears of saturating the gaming market as he talked to reporters in Chicago today about the gaming expansion passed by the legislature last spring. “I just think it’s top heavy, I’ve said that all along. You can’t over-saturate the gambling market in metro Chicago or anywhere else. If you have too many positions and casinos, they hurt each other, and they don’t really add to the revenue. And I don’t think the people really want our state to become the Las Vegas of the Midwest.” Quinn has voiced support for a provision of the bill that calls for the creation of a casino owned by the city of Chicago.
Meanwhile, lawmakers have said negotiating with Quinn over Senate Bill 744, which would allow for slot machines at horse racing tracks, as well as five new casinos, have been difficult because Quinn won’t say what he wants. Quinn countered today that legislators have not been specific about changes they are willing to make. “I haven’t seen anything specific or tangible from the legislature. All I know is what they did on May 31.” He said he would release specific changes he would like see “later this month.”
Senate President John Cullerton put a procedural hold on the bill in the hopes of negotiating with Quinn. The governor has pointed to that move as an indicator that the plan is flawed. “Obviously they know they have some defects there, because they haven’t sent it my way,” Quinn said. He added, “obviously they’re afraid of my review, and I think they should be.”
Skokie Democratic Rep. Lou Lang, a sponsor of SB 744, said he expects the fate of the expansion will be decided one way or another when lawmakers return later this month. “The plan would be to have some finality to this gaming issue during veto session.” Cullerton backed a plan to draft a so-called trailer bill that would make changes to the original legislation and then send both bills to the governor to be signed at the same time. “I’ve been pushing for a trailer bill. … It would be very tough to pass a new gaming bill or an amended gaming bill that makes substantial changes,” Lang told Illinois Issues.
But Quinn came out strong today against reworking the plan with a trailer bill. “They have a bill. If they don’t think the bill is good enough, they should go back to the drawing board and pass another bill that’s better,” Quinn said. “Do it right the first time. If it’s not right the first time, it’s got to go in the reject pile, and [lawmakers have] got to go back to the drawing board.” When asked if he would veto SB 744, if given the chance, Quinn said, “I think anybody with common sense, if they saw that [bill], would probably throw up their hands in shock and disbelief that we would have gambling expansion in Illinois without proper oversight.”
For more on video poker and the challenges the state faces in implementing it, see Illinois Issues April 2010.
For more on the upcoming veto session, see Illinois Issues October 2011.
Tuesday, June 28, 2011
Audits find mistakes in awarding lottery and video poker contracts
By Jamey Dunn
Two audits released today found problems with the way state government awarded contracts associated with two pivotal funding sources for the state's embattled capital construction plan.
An audit of the Illinois Department of Revenue took issue with the process used to choose Northstar Group as the new manager of the Illinois lottery. Northstar Group represents gaming vendors that have previously contracted with Illinois — Rhode-Island-based GTECH Corp. and New-York-based Scientific Games Inc., along with marketing partner Chicago-based Energy BBDO. Lawmakers approved a turnover of lottery management to a private firm as part of the capital bill with the hopes that a company could bring in greater profits for the state. The two other bidding finalists, Intralot S.A. and The Camelot Group, protested the state’s choice of Northstar, claiming the process was unfair. The state denied both protests.
Auditor General William Holland’s report found that some of the scores from members of the evaluation team were not certified by the department and some were not officially submitted until after the state had publicly announced its choice of Northstar as the manager.
However, Sue Hofer, spokesperson for the Department of Revenue, said the department had electronic copies of the evaluation team’s scores before a choice was made, and these copies were used to make a decision. “They provided their assessment twice, once electronically and once in a signed affidavit that said they had no conflict of interest,” she said. Hofer said the scores were valid whether submitted electronically or on paper, and the department provided Holland with the electronic copies of the scores.
But the auditor disagreed that the scores came in on time, whatever the delivery method. “The department’s response appears to want it both ways. They say auditors relied on the hard-copy evaluations, which we note were not timely. This is factual. Then the department wants us to utilize emails, which we also considered. However, as we note in the finding, these too showed the electronic submissions were not timely. The only constant was that all the discrepancies noted in the finding are from department documentation, whether hard copy or electronic,” the report said.
The audit also found that Oliver Wyman, a contracted consulting firm that helped the department with the bidding process, started work before it signed a contract with the state. Wyman sought and collected the names of firms interested on managing the lottery before the firm had a state contract. The audit also found that once Wyman was under contract, the firm failed to meet some of its deadlines, potentially shorting those considering bids time for a review process. “Failure to meet deliverable deadlines may have contributed to state evaluators having less than one week to evaluate the Request For Proposal responses in Step 1 of the process, a process that eventually would turn over a $2 billion state asset for private management,” the audit said.
“Those people were on a contract where they would get paid for product delivered. They were not getting paid by the hour,” Hofer said. “They started several days before the contract was officially signed, and that was at their own risk.”
Holland found that Kroll, a subcontractor hired by Wyman to provide investigative and consulting services as well as ensure that the bidding process was fair and open, had previous connections with Northstar. The report said two members of Scientific Games’ board of directors were previously Kroll board members and that a former incarnation of Scientific Games retained Kroll’s services in 2002. However the audit notes that the relationships ended three years prior to the work Kroll did on the lottery contract, so Wyman was not required to disclose them. The report also said Kroll was “very qualified” to do the work it was contracted for, and the auditor general’s office found no problems with reports submitted by Wyman and Kroll.
Overall, Holland’s report said: “The department should protect state interests and not allow vendors to work without an executed contract in place. Additionally, the department should enforce contract milestones or amend the contract to reflect updated priorities and time frames. Further, the department should ensure that all subcontractors disclose any relationships that may, even if only in appearance, impair the integrity of the procurement process.”
An audit of the Illinois Gaming Board also shed light on what went wrong with the bidding process for a central computer system needed to implement legalized video poker in bars and restaurants throughout the state. The revenue from video gaming is supposed to pay off borrowing for the state’s construction plan.
The board awarded the contract to Scientific Games, one of the companies in the Northstar Group, only to rescind the deal after it was found that the board had done its math wrong. “Lack of review for the scoring of pricing in the evaluation process of the Central Communications System (CCS) procurement resulted in the award to a vendor that was not the highest ranked,” the audit said. The report says only “one set of eyes” reviewed the pricing information that companies submitted with their bids. The audit also found that the board got different information from bidders, so it was not comparing apples to apples when it came to cost estimates, and it never followed up with the bidders to get like information. The board employee whose one set of eyes reviewed the cost estimates told auditors that the board was under pressure to make a choice, and any holdups would be “‘frowned upon.’”
Gene O’Shea, spokesperson for the gaming board, said that any pressure felt by the board or its employees is self-imposed. “There is no person or outside agency that is exerting any kind of pressure on the gaming board to get things done before they should be done.”
He added: “There’s just a lot of work to be done and few people to do it. … There’s people that are on the staff here that are working a tremendous amount of overtime to get the job done.”
The board has scrapped the original bid for the computer system and is in the process of a new bid.
The implementation of legal video poker in some bars and restaurants in the state has been put on hold until the Illinois Supreme Court rules on a constitutional challenge to the capital plan. However, state agencies are continuing work on the issue in anticipation of a positive verdict or the approval of a new plan by the legislature.
Two audits released today found problems with the way state government awarded contracts associated with two pivotal funding sources for the state's embattled capital construction plan.
An audit of the Illinois Department of Revenue took issue with the process used to choose Northstar Group as the new manager of the Illinois lottery. Northstar Group represents gaming vendors that have previously contracted with Illinois — Rhode-Island-based GTECH Corp. and New-York-based Scientific Games Inc., along with marketing partner Chicago-based Energy BBDO. Lawmakers approved a turnover of lottery management to a private firm as part of the capital bill with the hopes that a company could bring in greater profits for the state. The two other bidding finalists, Intralot S.A. and The Camelot Group, protested the state’s choice of Northstar, claiming the process was unfair. The state denied both protests.
Auditor General William Holland’s report found that some of the scores from members of the evaluation team were not certified by the department and some were not officially submitted until after the state had publicly announced its choice of Northstar as the manager.
However, Sue Hofer, spokesperson for the Department of Revenue, said the department had electronic copies of the evaluation team’s scores before a choice was made, and these copies were used to make a decision. “They provided their assessment twice, once electronically and once in a signed affidavit that said they had no conflict of interest,” she said. Hofer said the scores were valid whether submitted electronically or on paper, and the department provided Holland with the electronic copies of the scores.
But the auditor disagreed that the scores came in on time, whatever the delivery method. “The department’s response appears to want it both ways. They say auditors relied on the hard-copy evaluations, which we note were not timely. This is factual. Then the department wants us to utilize emails, which we also considered. However, as we note in the finding, these too showed the electronic submissions were not timely. The only constant was that all the discrepancies noted in the finding are from department documentation, whether hard copy or electronic,” the report said.
The audit also found that Oliver Wyman, a contracted consulting firm that helped the department with the bidding process, started work before it signed a contract with the state. Wyman sought and collected the names of firms interested on managing the lottery before the firm had a state contract. The audit also found that once Wyman was under contract, the firm failed to meet some of its deadlines, potentially shorting those considering bids time for a review process. “Failure to meet deliverable deadlines may have contributed to state evaluators having less than one week to evaluate the Request For Proposal responses in Step 1 of the process, a process that eventually would turn over a $2 billion state asset for private management,” the audit said.
“Those people were on a contract where they would get paid for product delivered. They were not getting paid by the hour,” Hofer said. “They started several days before the contract was officially signed, and that was at their own risk.”
Holland found that Kroll, a subcontractor hired by Wyman to provide investigative and consulting services as well as ensure that the bidding process was fair and open, had previous connections with Northstar. The report said two members of Scientific Games’ board of directors were previously Kroll board members and that a former incarnation of Scientific Games retained Kroll’s services in 2002. However the audit notes that the relationships ended three years prior to the work Kroll did on the lottery contract, so Wyman was not required to disclose them. The report also said Kroll was “very qualified” to do the work it was contracted for, and the auditor general’s office found no problems with reports submitted by Wyman and Kroll.
Overall, Holland’s report said: “The department should protect state interests and not allow vendors to work without an executed contract in place. Additionally, the department should enforce contract milestones or amend the contract to reflect updated priorities and time frames. Further, the department should ensure that all subcontractors disclose any relationships that may, even if only in appearance, impair the integrity of the procurement process.”
An audit of the Illinois Gaming Board also shed light on what went wrong with the bidding process for a central computer system needed to implement legalized video poker in bars and restaurants throughout the state. The revenue from video gaming is supposed to pay off borrowing for the state’s construction plan.
The board awarded the contract to Scientific Games, one of the companies in the Northstar Group, only to rescind the deal after it was found that the board had done its math wrong. “Lack of review for the scoring of pricing in the evaluation process of the Central Communications System (CCS) procurement resulted in the award to a vendor that was not the highest ranked,” the audit said. The report says only “one set of eyes” reviewed the pricing information that companies submitted with their bids. The audit also found that the board got different information from bidders, so it was not comparing apples to apples when it came to cost estimates, and it never followed up with the bidders to get like information. The board employee whose one set of eyes reviewed the cost estimates told auditors that the board was under pressure to make a choice, and any holdups would be “‘frowned upon.’”
Gene O’Shea, spokesperson for the gaming board, said that any pressure felt by the board or its employees is self-imposed. “There is no person or outside agency that is exerting any kind of pressure on the gaming board to get things done before they should be done.”
He added: “There’s just a lot of work to be done and few people to do it. … There’s people that are on the staff here that are working a tremendous amount of overtime to get the job done.”
The board has scrapped the original bid for the computer system and is in the process of a new bid.
The implementation of legal video poker in some bars and restaurants in the state has been put on hold until the Illinois Supreme Court rules on a constitutional challenge to the capital plan. However, state agencies are continuing work on the issue in anticipation of a positive verdict or the approval of a new plan by the legislature.
Wednesday, September 15, 2010
Quinn chooses familiar firm to run lottery
By Jamey Dunn
Gov. Pat Quinn chose a private firm made up of companies that already work with the Illinois Lottery to manage its efforts for the next 10 years.
Northstar Group represents gaming vendors, Rhode-Island-based GTECH Corp. and New-York-based Scientific Games Inc., along with marketing partner Chicago-Based Energy BBDO. The firm beat out the Camelot Group, which runs the United Kingdom’s lottery.
The Illinois Department Of Revenue and a yet-to-be-named advisory panel recommended Northstar to Quinn because its bid set higher profit goals and lower operation costs than Camelot’s. Quinn accepted the recommendation. The firm will undergo additional a four- to six-week vetting process before the state signs a contract. UPDATE: The department has released the names of the nine state workers that made up the advisory panel, and most of the bidding information is now posted on the Illinois Lottery website.
Jodie Winnett, acting lottery superintendent, said the state was looking for a firm that can expand the lottery’s customer base in a responsible way, but the top priority is increasing revenue for education and capital construction projects. She said Northstar’s plan was tailored specifically to Illinois, and the groups experience means it can unroll its plan quickly, resulting in a faster profit increase. “The state will benefit from their familiarity.”
According to the Department of Revenue, Northstar pledged to bring in an additional $1.1 billion in profits over the next five years, which is more than $500 million higher than Camelot’s pledge.
If Northstar does not make those goals, it has to pay the state half of the difference between the target and what it makes. The Department of Revenue also projected what the lottery would have made without the help of private firm to run day-to-day operations. If profits fall below those estimates, Northstar would have to repay the entire shortfall. Quinn described the lottery’s current profits as “stable but rather stagnant.”
“From what the lottery officials told us today, if they ran the lottery over the next five years, it would generate $3.3 billion. With a private manager, this first-in-the-nation approach is slated to generate $4.8 billion. The lottery's own statements acknowledge that the private sector can do this better,” Senate President John Cullerton said in a written statement.
Winnett said Northstar will start a transition period early next year, and its business plan for managing the lottery will kick off at the start of fiscal year 2012 next July.
Gov. Pat Quinn chose a private firm made up of companies that already work with the Illinois Lottery to manage its efforts for the next 10 years.
Northstar Group represents gaming vendors, Rhode-Island-based GTECH Corp. and New-York-based Scientific Games Inc., along with marketing partner Chicago-Based Energy BBDO. The firm beat out the Camelot Group, which runs the United Kingdom’s lottery.
The Illinois Department Of Revenue and a yet-to-be-named advisory panel recommended Northstar to Quinn because its bid set higher profit goals and lower operation costs than Camelot’s. Quinn accepted the recommendation. The firm will undergo additional a four- to six-week vetting process before the state signs a contract. UPDATE: The department has released the names of the nine state workers that made up the advisory panel, and most of the bidding information is now posted on the Illinois Lottery website.
Jodie Winnett, acting lottery superintendent, said the state was looking for a firm that can expand the lottery’s customer base in a responsible way, but the top priority is increasing revenue for education and capital construction projects. She said Northstar’s plan was tailored specifically to Illinois, and the groups experience means it can unroll its plan quickly, resulting in a faster profit increase. “The state will benefit from their familiarity.”
According to the Department of Revenue, Northstar pledged to bring in an additional $1.1 billion in profits over the next five years, which is more than $500 million higher than Camelot’s pledge.
If Northstar does not make those goals, it has to pay the state half of the difference between the target and what it makes. The Department of Revenue also projected what the lottery would have made without the help of private firm to run day-to-day operations. If profits fall below those estimates, Northstar would have to repay the entire shortfall. Quinn described the lottery’s current profits as “stable but rather stagnant.”
“From what the lottery officials told us today, if they ran the lottery over the next five years, it would generate $3.3 billion. With a private manager, this first-in-the-nation approach is slated to generate $4.8 billion. The lottery's own statements acknowledge that the private sector can do this better,” Senate President John Cullerton said in a written statement.
Winnett said it is hard to stay on the cutting edge of promotions when dealing with the red tape of government. “To be a nimble responsive marketing organization [as part of a large bureaucracy] is difficult.”
The Division of the Lottery will continue to operate in the Department of Revenue, and current employees will “work alongside” the management firm. Winnett emphasized that the state will still own the lottery and have a say in all decisions. She added that her division and Northstar would hold “monthly meetings as a formal matter, but I am sure it will be every day.”
She said some of the plans moving forward include expanding from 7,500 retailers to 13,000 — including “big box” stores and pharmacies — such as Walmart and CVS. Marketing efforts would also include highlighting projects funded with lottery profits.
Winnett said Northstar will start a transition period early next year, and its business plan for managing the lottery will kick off at the start of fiscal year 2012 next July.
Monday, July 13, 2009
Ready, set, shovel
By Bethany Jaeger
Shovels could break ground within a few weeks as the state signs contracts for new road construction jobs. Gov. Pat Quinn signed into law a capital spending plan that his office said would create or retain as many as 439,000 jobs throughout the next six years.
“By advancing this now, we can still have an impact during this construction season. We should not let a minute go to waste,” Senate Minority Leader Christine Radogno said in a statement. At a bill-signing ceremony in Chicago Monday afternoon, she added: “These last several years, successes in Illinois government have been few and far between. But what we have here today is a major success. It’s a beautiful thing.”
Trade group members are on the edge of their seats waiting for projects to start, according to Beth Tatro, director of external programs the Illinois Road and Transportation Builders Association based in Itasca. “We’re at the point right now where our companies are starving,” she said. “This has been an early Christmas present.”
But time is tight for projects to begin this month. Engineers have to design the work, the department has to seek bids for contracts to do the work and then they’ll start building. “If the project is already on the shelf, as soon as we get the money, we can build them,” Tatro said. If some of the projects were designed three years ago, engineers might have to review the plans and adjust the costs.
According to the Illinois Department of Transportation, about $448 million in highway projects already have been let. And an additional $310 million would be obligated for highway projects this fiscal year. The distribution of money for downstate mass transit projects, however, has not yet been decided, according to the department.
In addition to improving transportation-related infrastructure such as roads, bridges and mass transit, the $31 billion capital plan will finance projects that build new schools, make schools and homes more energy efficient and support vocational and early childhood facilities. Environmental and economic development projects also are slated to help clean up contaminated sites, deploy broadband Internet technologies, support jobs in economically depressed areas and help build affordable housing units for veterans and people with disabilities. Another goal is to expand high-speed rail between Chicago and St. Louis.
The capital plan, however, does not mean that Illinois has an operating budget. The lack of a state operating budget for the fiscal year that started July 1 has led to ongoing layoffs and service reductions for community service agencies. Without a spending plan in place this week, some state employees could not receive their full paychecks on time.
The governor indicated last Friday that he would postpone his campaign to enact a temporary income tax hike until this fall, which would allow incumbent legislators to know whether they have serious primary election challengers in 2010. Quinn also indicated last week that he would, despite early opposition, consider a five-month budget to at least keep the state operating until the legislature returns for its annual fall session in November.
The legislature will return to the Capitol Tuesday afternoon. Legislative leaders are scheduled to meet with the governor Tuesday morning.
Shovels could break ground within a few weeks as the state signs contracts for new road construction jobs. Gov. Pat Quinn signed into law a capital spending plan that his office said would create or retain as many as 439,000 jobs throughout the next six years.
“By advancing this now, we can still have an impact during this construction season. We should not let a minute go to waste,” Senate Minority Leader Christine Radogno said in a statement. At a bill-signing ceremony in Chicago Monday afternoon, she added: “These last several years, successes in Illinois government have been few and far between. But what we have here today is a major success. It’s a beautiful thing.”
Trade group members are on the edge of their seats waiting for projects to start, according to Beth Tatro, director of external programs the Illinois Road and Transportation Builders Association based in Itasca. “We’re at the point right now where our companies are starving,” she said. “This has been an early Christmas present.”
But time is tight for projects to begin this month. Engineers have to design the work, the department has to seek bids for contracts to do the work and then they’ll start building. “If the project is already on the shelf, as soon as we get the money, we can build them,” Tatro said. If some of the projects were designed three years ago, engineers might have to review the plans and adjust the costs.
According to the Illinois Department of Transportation, about $448 million in highway projects already have been let. And an additional $310 million would be obligated for highway projects this fiscal year. The distribution of money for downstate mass transit projects, however, has not yet been decided, according to the department.
In addition to improving transportation-related infrastructure such as roads, bridges and mass transit, the $31 billion capital plan will finance projects that build new schools, make schools and homes more energy efficient and support vocational and early childhood facilities. Environmental and economic development projects also are slated to help clean up contaminated sites, deploy broadband Internet technologies, support jobs in economically depressed areas and help build affordable housing units for veterans and people with disabilities. Another goal is to expand high-speed rail between Chicago and St. Louis.
The capital plan, however, does not mean that Illinois has an operating budget. The lack of a state operating budget for the fiscal year that started July 1 has led to ongoing layoffs and service reductions for community service agencies. Without a spending plan in place this week, some state employees could not receive their full paychecks on time.
The governor indicated last Friday that he would postpone his campaign to enact a temporary income tax hike until this fall, which would allow incumbent legislators to know whether they have serious primary election challengers in 2010. Quinn also indicated last week that he would, despite early opposition, consider a five-month budget to at least keep the state operating until the legislature returns for its annual fall session in November.
The legislature will return to the Capitol Tuesday afternoon. Legislative leaders are scheduled to meet with the governor Tuesday morning.
“The General Assembly must pass a balanced budget that makes essential cuts and cost efficiencies, while also providing for our most vulnerable and needy residents,” Quinn said in a statement Monday.
The governor previously said he would not sign the capital plan into law without an operating budget on his desk because without it, bond rating agencies were likely to downgrade the state’s bond status, which would make it more expensive for the state to borrow.
Financing the statewide construction program
The flow of revenue to pay for projects outlined in the program, Illinois Jobs Now!, comes from a variety of fee increases and gaming expansions. Driving-related fees for vehicle titles, license plates and drivers’ licenses combine with expanded sales taxes on candy, some tea and coffee drinks, hygiene products and wine and beer.
The governor previously said he would not sign the capital plan into law without an operating budget on his desk because without it, bond rating agencies were likely to downgrade the state’s bond status, which would make it more expensive for the state to borrow.
Financing the statewide construction program
The flow of revenue to pay for projects outlined in the program, Illinois Jobs Now!, comes from a variety of fee increases and gaming expansions. Driving-related fees for vehicle titles, license plates and drivers’ licenses combine with expanded sales taxes on candy, some tea and coffee drinks, hygiene products and wine and beer.
The revenue bill is House Bill 255.
The spending bill is HB 312.
The bonding bill is HB 2400.
The state would garner 80 percent of the revenue generated by new sales taxes on candy and grooming products, which will include soaps, shampoo, toothpaste, mouthwash, deodorants, and suntan lotions and sunscreens that don’t require prescriptions.
A more controversial and, potentially, legally challenging revenue source would be the legalization of video poker in places that serve alcohol. Numerous bars, clubs and riverboats throughout the state already have video poker machines, but hundreds illegally pay winners under-the-table. The new state law would legalize the payouts and then tax the profits, generating up to $300 million a year once fully implemented, according to the governor’s office.
Supporters, including coin machine operators and beverage and hospitality associations, said it’s a voluntary tax that averts the need to raise other general state taxes to pay for critical construction projects. Opponents have said video poker increases the likelihood of gambling addictions and social problems that go along with them. A portion of the revenue will go to gambling addiction services.
Each restaurant, bar, veterans’ hall, truck stop would be stripped of existing machines and would have to install up to five standardized machines that would be connected to and regulated by state gaming authorities. But before they could install the machines, the county or municipality would first have to submit the question of whether to allow legalized video poker to voters. A majority of voters would have to say OK.
The new law also allows the state to partner with a private management firm to run the Illinois Lottery, although the state would still own and maintain control of the asset. And Illinois could start a pilot project for up to four years to allow people 18 and older to buy Lotto and Mega Million lottery tickets online, mainly in an effort to target people who don’t often play the lottery. But the pilot program would first need federal approval from the U.S. Department of Justice. The University of Illinois will conduct a study about the effect of families buying lottery tickets in a report due to the state in January 2011.
The state would garner 80 percent of the revenue generated by new sales taxes on candy and grooming products, which will include soaps, shampoo, toothpaste, mouthwash, deodorants, and suntan lotions and sunscreens that don’t require prescriptions.
A more controversial and, potentially, legally challenging revenue source would be the legalization of video poker in places that serve alcohol. Numerous bars, clubs and riverboats throughout the state already have video poker machines, but hundreds illegally pay winners under-the-table. The new state law would legalize the payouts and then tax the profits, generating up to $300 million a year once fully implemented, according to the governor’s office.
Supporters, including coin machine operators and beverage and hospitality associations, said it’s a voluntary tax that averts the need to raise other general state taxes to pay for critical construction projects. Opponents have said video poker increases the likelihood of gambling addictions and social problems that go along with them. A portion of the revenue will go to gambling addiction services.
Each restaurant, bar, veterans’ hall, truck stop would be stripped of existing machines and would have to install up to five standardized machines that would be connected to and regulated by state gaming authorities. But before they could install the machines, the county or municipality would first have to submit the question of whether to allow legalized video poker to voters. A majority of voters would have to say OK.
The new law also allows the state to partner with a private management firm to run the Illinois Lottery, although the state would still own and maintain control of the asset. And Illinois could start a pilot project for up to four years to allow people 18 and older to buy Lotto and Mega Million lottery tickets online, mainly in an effort to target people who don’t often play the lottery. But the pilot program would first need federal approval from the U.S. Department of Justice. The University of Illinois will conduct a study about the effect of families buying lottery tickets in a report due to the state in January 2011.
Thursday, May 21, 2009
Capital plan passes both chambers
By Jamey Dunn and Hilary RussellPhotograph by Hilary Russell
Right: The Illinois House approved a revenue package by a vote of 86-30-1, with opposition mostly objecting to new gaming sources.
The House tonight approved a major capital construction program, wrapping up one of the three major issues that lawmakers seek to tackle before session adjourns at the end of the month. The next step for the bill is approval from Gov. Pat Quinn, but whether that will happen quickly and when projects would begin is still up in the air.
The $26 billion plan will be funded by tax, fee and fine increases. The state will contribute about $11.5 billion, which will leverage federal and local funds. An expansion of lottery ticket sales and legalizing video gaming in bars, restaurants and truck stops will generate revenue for the state’s contribution.
However, House Minority Leader Tom Cross said he does not know exactly when construction would start. “Maybe summer, early fall. But I think even if you don’t have specific shovels in the ground, you’ve got engineers and architects putting plans together,” he said after the program won House approval. “We’ve got some good movement in that mini-capital plan, so there’s some activity out there. Would we all love to see it all tomorrow? Yeah, but it’s not going to happen.”
Some of the proposed revenue sources would not immediately bring in money. Video gaming would require implementing a complicated oversight process. Many establishments already have video poker machines, and some illegally pay out to winners. If the legislation becomes law, the payouts would have to be documented and regulated. Existing machines would have to be replaced or retrofitted to meet monitoring standards spelled out in the legislation. Proponents claim that the new regulation could weed out organized crime that has been perceived to be associated with illegal video poker.
Leasing the Illinois Lottery to a private entity is contingent on approval from the U.S. Department of Justice, and the state has no control over how soon, if ever, that will come. Selling lottery tickets online is an unprecedented move. If approved, getting the operation up and running could take awhile.
Legalizing video gaming and the proposed changes to the lottery kept the plan from getting unanimous support. Cross said it was a difficult vote for some members of the GOP caucus. “It’s going to be difficult, and it’s going to have a little pain in it. And, there are people that didn’t like it,” he said.
Some Democrats didn’t like it, either. The majority of “no” votes among Democrats came from suburban Chicago lawmakers. Many echoed Quinn’s statement yesterday that the state’s operating budget, which funds government operations, health care, education and social services, should have taken priority over a construction plan.
Rep. John Fritchey, a Chicago Democrat and the only lawmaker to vote “present” on the revenue sources, said he was hesitant to approve what he considered a gaming expansion and the privatization of the lottery. He added that while the legislature found money to build new schools, lawmakers haven’t yet figured out how to pay for the teachers who would work in those schools.
Legislators also expressed concern that Quinn might not sign the capital plan into law until the General Assembly sends an operating budget to his desk. He has 60 days to act before the capital program automatically becomes law. Cross said that Quinn had told him he would sign the bill, but he worries that Quinn could delay the signing.
Regardless, lawmakers expressed relief that both chambers finally approved a long-awaited infrastructure program after consecutive years of false starts.
Rep. Lou Lang, a Skokie Democrat, said: “The state of Illinois has needed an infrastructure bill for a very long time. We need to put people to work, we need to fix roads, bridges and schools and water mains, and I believe this is an economic stimulus package done by the state of Illinois. And it was critical that it passed.”
Now the legislature can turn its focus to the operating budget and government reforms. While some procurement and employee ethics reforms advanced to the Senate today, the Senate also could begin debate about the governor’s Illinois Reform Commission’s proposals tomorrow.
Wednesday, May 20, 2009
Capital plan heads to the House
By Bethany Jaeger, Hilary Russell and Jamey Dunn
Senate President John Cullerton said he delivered on an inaugural promise to approve a major infrastructure program this spring. The $26 billion capital program, which would rely on tax and fee increases and new gaming revenues, won Senate approval and now heads to the House in what many legislators hope will continue to be a bipartisan effort.
If approved by the House, the new plan would build onto a $3 billion “mini-capital” program approved earlier this year. Combining state, local and federal funding in both the mini- and the full-capital plans would mean a $29 billion investment into roads, bridges, mass transit, schools, universities and community colleges, parks, libraries, museums, water systems and technology projects.
But not all the spending was earmarked in today’s capital plan. Legislators still would have to negotiate how and where the last $1.5 billion would be spent. The General Assembly also still has to negotiate how to balance an operating budget that is projected to be $11.6 billion out of whack over two fiscal years. But that is separate from the capital program.
Cullerton and Senate Minority Leader Christine Radogno stood together in a news conference after the chamber approved the construction. While several Republicans and a couple of Democrats opposed the revenue ideas (here’s the vote of 47-12), the spending plan received unanimous support.
“If you look at the totals of the votes, perhaps we could have done this with just Democrats,” Cullerton said, “but then we’d have acrimony, and it wouldn’t bode well for the future, and it wouldn’t bode well for the [operating] budget.”
Radogno said the four caucuses worked together to ensure a fair distribution of the money throughout all regions of the state. “That is not always easy to do. Then you cross-cut that with partisan politics. It is not easy to come up with something fair and balanced, and I truly believe that this is a fair and balanced product.”
Radogno added that while the revenue package is “not ideal,” it is “real revenue,” as opposed to borrowing without having money to repay the debt. “This proposal doesn’t do that. It pays for what we’re going to be getting.”
Sen. Martin Sandoval, a Chicago Democrat who has urged for more money for Chicago-area transportation systems, claimed victory because the capital program would include a more equitable split of money between northeastern Illinois and downstate. While some of the money will be distributed through a traditional formula for road projects that tends to give more money to downstate road projects, about $3.5 billion would go to new road and transit projects through discretionary spending. Cullerton said, “When it’s all said and done on roads, it’s probably 50-50 throughout the entire state.”
Sen. James Meeks, a Chicago Democrat, did not support the revenue portion. Cullerton later said that he met with Meeks several times to address his concerns about minority representation in unions and construction jobs. Cullerton said he looks to fund a vocational training program when the leaders negotiate the final $1.5 billion of the capital program.
It’s been 10 years since Illinois had such a major infrastructure package, and the last six years of gridlock between former Gov. Rod Blagojevich and the legislature took a toll. Numerous legislators commented about reviving a bipartisan spirit after a span of dysfunction, and “what a difference a year makes.” Cullerton ended by saying: “This is just back to normal. I’ve been here 30 years — 24 of them were normal.”
Here’s a breakdown of the revenue-makers:
Gaming
Taxes
Driving-related fees
Increased fees would bring in more than $330 million a year. The increases would include:
Revenue bill is HB 255.
Spending bill is HB 312.
Bonding bill is HB 2400.
Senate President John Cullerton said he delivered on an inaugural promise to approve a major infrastructure program this spring. The $26 billion capital program, which would rely on tax and fee increases and new gaming revenues, won Senate approval and now heads to the House in what many legislators hope will continue to be a bipartisan effort.
If approved by the House, the new plan would build onto a $3 billion “mini-capital” program approved earlier this year. Combining state, local and federal funding in both the mini- and the full-capital plans would mean a $29 billion investment into roads, bridges, mass transit, schools, universities and community colleges, parks, libraries, museums, water systems and technology projects.
But not all the spending was earmarked in today’s capital plan. Legislators still would have to negotiate how and where the last $1.5 billion would be spent. The General Assembly also still has to negotiate how to balance an operating budget that is projected to be $11.6 billion out of whack over two fiscal years. But that is separate from the capital program.
Cullerton and Senate Minority Leader Christine Radogno stood together in a news conference after the chamber approved the construction. While several Republicans and a couple of Democrats opposed the revenue ideas (here’s the vote of 47-12), the spending plan received unanimous support.
“If you look at the totals of the votes, perhaps we could have done this with just Democrats,” Cullerton said, “but then we’d have acrimony, and it wouldn’t bode well for the future, and it wouldn’t bode well for the [operating] budget.”
Radogno said the four caucuses worked together to ensure a fair distribution of the money throughout all regions of the state. “That is not always easy to do. Then you cross-cut that with partisan politics. It is not easy to come up with something fair and balanced, and I truly believe that this is a fair and balanced product.”
Radogno added that while the revenue package is “not ideal,” it is “real revenue,” as opposed to borrowing without having money to repay the debt. “This proposal doesn’t do that. It pays for what we’re going to be getting.”
Sen. Martin Sandoval, a Chicago Democrat who has urged for more money for Chicago-area transportation systems, claimed victory because the capital program would include a more equitable split of money between northeastern Illinois and downstate. While some of the money will be distributed through a traditional formula for road projects that tends to give more money to downstate road projects, about $3.5 billion would go to new road and transit projects through discretionary spending. Cullerton said, “When it’s all said and done on roads, it’s probably 50-50 throughout the entire state.”
Sen. James Meeks, a Chicago Democrat, did not support the revenue portion. Cullerton later said that he met with Meeks several times to address his concerns about minority representation in unions and construction jobs. Cullerton said he looks to fund a vocational training program when the leaders negotiate the final $1.5 billion of the capital program.
It’s been 10 years since Illinois had such a major infrastructure package, and the last six years of gridlock between former Gov. Rod Blagojevich and the legislature took a toll. Numerous legislators commented about reviving a bipartisan spirit after a span of dysfunction, and “what a difference a year makes.” Cullerton ended by saying: “This is just back to normal. I’ve been here 30 years — 24 of them were normal.”
Here’s a breakdown of the revenue-makers:
Gaming
- Two separate types of gaming would generate about $375 million. That includes legalizing video gaming machines in places where alcohol is served. The state would tax and regulate the machines and garner revenue.
- A second program would allow the state to hire a private company to manage the Illinois Lottery for up to 10 years. It also would sell lottery tickets online, with the goal of marketing to people who don’t currently play the Lottery. It would make Illinois the first state in the nation to allow “Internet lottery,” which would be contingent on approval from the U.S. Justice Department.
- But creating new methods to access gambling is similar to playing with fire, according to Anita Bedell, executive director of Illinois Church Action and Alcohol Addiction Problems, who likened the programs to granting easy access to underage players.
Taxes
- It would reclassify soft drinks, candy, beauty and some hygiene products for sales tax purposes and generate up to $150 million.
- The sales tax on alcohol also would increase for wine (from 73 cents to $1.39 per gallon), spirits (from $4.50 to $8.55 per gallon) and beer (from 18.5 cents to 23.1 cents per gallon). It would generate about $113 million a year. Opponents said taxing alcoholic beverages is not a constant source of revenue for the state.
Driving-related fees
Increased fees would bring in more than $330 million a year. The increases would include:
- Title certificate fees from $65 to $95.
- Registration fees from $15 to $25.
- Driver’s license fees from $10 to $30.
- Fines for semitrailers that are over the approved weight.
Revenue bill is HB 255.
Spending bill is HB 312.
Bonding bill is HB 2400.
Sunday, May 17, 2009
Revenue first, spending second for capital plan
By Bethany Jaeger
Senate Democrats and Republicans are inching closer to an agreement on at least half of the capital plan: the revenue side. Measures to raise about $1 billion of the state's share through various tax and fee increases, as well as two gaming-related revenue ideas, could advance early this week. The spending side of the roughly $26 billion construction plan, however, will take longer to negotiate.
Senate Democrats met behind closed doors Sunday evening, setting up what's scheduled to be the last two weeks of the spring legislative session. The goal remains to adjourn two days early on May 29, said Rikeesha Phelon, spokeswoman for Senate President John Cullerton. Expect the Senate to act on capital construction package and ethics reforms this week. Negotiations on an operating budget, so far, have been separate.
The construction program for roads, bridges, schools and infrastructure projects would rely on a series of revenue sources, the largest being about $375 million from the legalization of video poker machines in bars, truck stops and other establishments where alcohol is served, according to a Democratic source. The second largest source, about $331 million, would come from increased driving-related fees.
The plan also would allow a private company to manage the Illinois Lottery and allow tickets to be sold online, bringing in about $150 million. Additional revenue sources would include $150 million from expanded taxes on candy, non-carbonated drinks and some health and beauty aid products, as well as $114 million from expanded taxes on wine (13 cents a bottle), liquor (80 cents a bottle) and beer (about 2 cents a six pack). An increase on the state's motor fuel tax is no longer on the table.
Senate Minority Leader Christine Radogno said her caucus wants the two gaming-related measures in one bill and the other revenue sources in another bill to separate the votes. “It’s primarily to address the fact that there are people in all four caucuses that would never under any circumstances vote for gaming," she said. Cullerton is considering the request, Phelon said.
We'll have much more this week.
Senate Democrats and Republicans are inching closer to an agreement on at least half of the capital plan: the revenue side. Measures to raise about $1 billion of the state's share through various tax and fee increases, as well as two gaming-related revenue ideas, could advance early this week. The spending side of the roughly $26 billion construction plan, however, will take longer to negotiate.
Senate Democrats met behind closed doors Sunday evening, setting up what's scheduled to be the last two weeks of the spring legislative session. The goal remains to adjourn two days early on May 29, said Rikeesha Phelon, spokeswoman for Senate President John Cullerton. Expect the Senate to act on capital construction package and ethics reforms this week. Negotiations on an operating budget, so far, have been separate.
The construction program for roads, bridges, schools and infrastructure projects would rely on a series of revenue sources, the largest being about $375 million from the legalization of video poker machines in bars, truck stops and other establishments where alcohol is served, according to a Democratic source. The second largest source, about $331 million, would come from increased driving-related fees.
The plan also would allow a private company to manage the Illinois Lottery and allow tickets to be sold online, bringing in about $150 million. Additional revenue sources would include $150 million from expanded taxes on candy, non-carbonated drinks and some health and beauty aid products, as well as $114 million from expanded taxes on wine (13 cents a bottle), liquor (80 cents a bottle) and beer (about 2 cents a six pack). An increase on the state's motor fuel tax is no longer on the table.
Senate Minority Leader Christine Radogno said her caucus wants the two gaming-related measures in one bill and the other revenue sources in another bill to separate the votes. “It’s primarily to address the fact that there are people in all four caucuses that would never under any circumstances vote for gaming," she said. Cullerton is considering the request, Phelon said.
We'll have much more this week.
Tuesday, May 12, 2009
Video gaming advances
by Jamey Dunn
A bill that would expand gambling to help pay for new schools passed in a House committee today.
The measure, sponsored by Rep. Frank Mautino, a Spring Valley Democrat, would allow establishments where liquor is served, fraternal organizations, veterans' clubs and truck stops to have video gaming machines such as video poker. Many places already have the machines, but they can't legally pay out winnings. If approved, the state would require establishments that offered video poker to be licensed and would legalize betting on the games. The machines also would be taxed, with revenue going toward school construction projects and local governments.
Mautino said he did not make racetracks or off-track betting facilities eligible to operate video poker machines because he wanted to keep the bill simple in hopes of increasing its chances of passage. “For years this bill has been around, and it gets involved in the giant end-of-session bills, which usually collapse under their own weight,” he said.
Here's a break down of some of the numbers associated with the measure:
House Speaker Michael Madigan said last week that he does not want to consider any gaming expansions this session.
A bill that would expand gambling to help pay for new schools passed in a House committee today.
The measure, sponsored by Rep. Frank Mautino, a Spring Valley Democrat, would allow establishments where liquor is served, fraternal organizations, veterans' clubs and truck stops to have video gaming machines such as video poker. Many places already have the machines, but they can't legally pay out winnings. If approved, the state would require establishments that offered video poker to be licensed and would legalize betting on the games. The machines also would be taxed, with revenue going toward school construction projects and local governments.
Mautino said he did not make racetracks or off-track betting facilities eligible to operate video poker machines because he wanted to keep the bill simple in hopes of increasing its chances of passage. “For years this bill has been around, and it gets involved in the giant end-of-session bills, which usually collapse under their own weight,” he said.
Here's a break down of some of the numbers associated with the measure:
- 25 percent The percentage of net profits from the video gaming machines that would be taxed.
- 20 percent The amount that would go toward building schools.
- 5 percent The amount that would go to local governments.
- $2 The maximum wager per hand.
- $500 The maximum payout per hand.
- 21 The minimum age to play.
- $5,000 The maximum fine an establishment would pay for allowing someone under 21 to gamble.
- 25 The percent of licensing fees and fines that would go toward treating gambling addiction.
- 75 The percent that would go toward regulating the process.
House Speaker Michael Madigan said last week that he does not want to consider any gaming expansions this session.
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