Pritzker asked about budget memo
Monday, May 13, 2024 - Posted by Rich Miller
* Gov. JB Pritzker was asked today about the memo from his deputy governor to state agency directors last week telling them that opposition to the governor’s revenue proposals meant they should start preparing to make $800 million in cuts to next fiscal year’s budget…
Q: I’m wondering where you’re seeing that opposition…?
Pritzker: I don’t think it’s some faction or another. Yeah, there were just, there were some some talk in caucus meetings that were occurring in the House or the Senate, in which people had raised concerns or objections, some of which is misinformation or they don’t have the right information about what we’re doing.
For example, there’s some people who think that the increase in the sports betting percentage tax is against sports betters themselves. That’s not the case. It’s only on the sports betting companies, right DraftKings, FanDuel, other companies like that. And similarly on the other manner, which is somewhat complex, net operating loss carry forwards. Not everybody’s familiar with those but we actually have lowered the tax on that operating cost, net operating loss carryforwards from what it had been there’d been a limitation of 100,000 we raised that limitation to 500,000. So more companies could take deductions essentially on their taxes.
So, having said that, we realized that we may not be able to get to all of the members or explain it properly to all of them and just wanted to make sure that they understood, you know, that that, you know, our leaders of our agencies needed to understand, that if those new revenues don’t come through that we’ll probably be hearing from the legislature about cuts that they want to make. And so we wanted to put everybody on notice. That’s the real purpose of that memo.
Sounds like the governor could’ve been working members earlier.
* Back to the governor’s Q&A…
Q: You said within some caucuses.. what caucuses…?
Pritzker: Yeah, I think I couldn’t identify them for you. I think you know, more broadly, obviously, there are Republicans who objected to some of it. There are Democrats who’ve expressed some objection. We’re hoping that people come to a better understanding of it or, or they decide to make changes to the budget. Remember, I introduced a budget in February. This is the normal process, right? It’s a balanced budget. Then it goes to the legislature. It’s really up to the legislature at that point to make decisions about whether they like what was in that original budget, what they might want to change. For the most part, the legislature has accepted my budgets, you know, 90, 95% of them, and made tweaks to them that they’ve seen fit or that we’ve negotiated over time. And then at the end, there’s a vote on it. So, my one principle around this budget is it’s got to be balanced. So whatever happens here, we’re not going to overspend. We’re not going to start sweeping dollars from accounts that had been done before I became governor. We’re not going to go back to the old practices of making us a credit unworthy state. And so we’ve got to balance the budget. And that’s really the real message that I think everybody in the legislature knows that I’m sending.
- that’s bettor - Monday, May 13, 24 @ 10:37 am:
= increase in the sports betting percentage tax is against sports betters themselves=
Because other industries never pass on expenses to consumers./s
If you raise the tax on sports betting, it will make the odds less favorable to the daily/professional bettors. They will take their play elsewhere, likely offshore (illegal) sports books where there is Zero tax collected. 15% of something is a lot higher than 35% of nothing.
- Rich Miller - Monday, May 13, 24 @ 10:42 am:
===They will take their play elsewhere, likely offshore (illegal) ===
Prove it.
Also, within your argument, tell us why this has not happened in New York.
“New York imposes a tax rate of 51% on gross gaming revenues, one of the highest in the country.” https://www.forbes.com/sites/kellyphillipserb/2023/10/17/new-york-reports-gambling-revenues-are-up-and-so-are-problem-gambling-calls/?sh=1afcf68a69a0
Players in New York spent $1.96bn (£1.56bn/€1.82bn) betting on sports online in April, one of the highest monthly figures since the state’s legal market launched in January 2022. https://igamingbusiness.com/sports-betting/online-sports-betting/new-york-online-sports-betting-handle-april/
- Perrid - Monday, May 13, 24 @ 10:46 am:
The “average” person is not going to take their money to illegal offshore gambling, come on. If some of the hardcore gamblers or addicts go elsewhere looking for the fix, I don’t think the industry will collapse.
And sure, the Gov could have done more, that’s usually the case, but if legislators decide to buy the stories industry insiders tell them and decide protecting gambling companies is more important than the services that are going to get cut, that’s on them. JB can lead a horse to water, he can’t make them drink.
We’ll see what happens.
- Who else - Monday, May 13, 24 @ 10:58 am:
It’s extremely obvious to folks who know how these budget conversations go every year that the Senate is ready to make choices that get us to a balanced budget and the House is not.
The budgeteers have been in conversations with the Governor’s office since the fall, as Rich pointed out. Spending and revenue are discussed and dissected. Attending the budgeteer meetings in good faith and then going back to your caucus at the appropriate time to line up support for your caucus priorities is the ground level expectation of budgeteers and budget staff. And then you come back to the table with all the parties with your vision hammered out and find a middle ground in these final weeks.
If there was not a budgeteer process, Rich would be right– the Governor should have been working individual members all along. But that’s inappropriate in the context of the budgeteer process. You don’t go around budgeteers and rev up strife within caucuses without leaders getting very angry at you for meddling.
There’s no excuse for not having brought your caucus along for the ride and after months of meetings that’s really not an acceptable position to be in (again.) The Senate and the Governor’s office cannot be responsible for managing house members.
In the end this is very, very simple. If you want Illinois to be a state that funds homelessness prevention, agency head count increases, home delivered meals, MAP grants, EBF and business development you have to have the revenue to pay for those priorities. And if you do not want Illinois’ budget to fund those things you do not need the revenue. That’s the only choice at this point during session.
- Cook the Books - Monday, May 13, 24 @ 10:59 am:
This isn’t hard. Either you pay for spending or you don’t. Never seen such attention to a memo that is so elementary.
- that’s bettor - Monday, May 13, 24 @ 11:07 am:
Perrid, that’s exactly what I said. I would also consider daily gamblers addicts, but that’s just me. Those of us that bet every once in a while with $20 here and there aren’t going anywhere. Just stinks that when I do hit a fun parlay it won’t pay as well under a higher tax.
New York’s population and overallbetting population is significantly larger than we are and the industry can spread those expenses (odds splits)out over a larger betting pool to make their profit.
- that’s bettor - Monday, May 13, 24 @ 11:10 am:
But as it pertains to the budget, get it funded and get it passed. If I lose $5 on my Gatorade color bet next year so be it.
- Rich Miller - Monday, May 13, 24 @ 11:12 am:
===and the industry can spread those expenses (odds splits)out over a larger betting pool to make their profit===
lol
Sure, Jan.
Illinois’ population is 64 percent of New York’s. That proposed Illinois tax is about 69 percent of New York’s.
Try again.
- that’s bettor - Monday, May 13, 24 @ 11:20 am:
Margins are margins. Higher taxes cut into those margins. As just about every industry will argue any time a proposed tax increase gets floated.
- Rich Miller - Monday, May 13, 24 @ 11:21 am:
So, now it’s Econ 101, perhaps the worst scourge ever released upon this country. (Half snark)
- Excitable Boy - Monday, May 13, 24 @ 11:30 am:
- Higher taxes cut into those margins. -
Margins don’t mean much if your customer base decreases dramatically, as it will if you go back to the black market. But I’m sure a whiz kid like yourself already knew that.
- Rich Miller - Monday, May 13, 24 @ 11:32 am:
===as it will if you go back to the black market===
Again, prove it.
- Excitable Boy - Monday, May 13, 24 @ 11:52 am:
- Again, prove it. -
Sorry, I wasn’t very clear. I was trying to say I don’t believe a substantial number of gamblers will go back to illegal books because of this. These owners should be happy with the relatively modest increase.
- Mason County - Monday, May 13, 24 @ 11:56 am:
Sports betting. Pass it and fast! Do not expect it to be a panacea for budget concerns in the future.
I do not see the state’s revenue increasing anything beyond inflation while expenditures could vastly exceed that.
As to the caucuses, let there be plenty of them to discuss future budget issues. Indeed the GOV and the GA really need to address the future and do it with a nurgency.
- Donnie Elgin - Monday, May 13, 24 @ 12:44 pm:
= misinformation …For example, there’s some people who think that the increase in the sports betting percentage tax is against sports betters themselves. That’s not the case. It’s only on the sports betting companies what we’re doing…
Well, JB has his talking points, but one should also consider those of the Sports Betting industry…
“Sports betting companies said if approved, higher taxes would mean worse odds, and fewer promotions for users – which they warn could fuel the illegal market. The companies also warn the tax hike may drive all but the top three sportsbooks out of Illinois”
https://www.cbsnews.com/chicago/news/top-sportsbooks-fight-illinois-tax-hike-proposal/
- Give Us Barabbas - Monday, May 13, 24 @ 1:41 pm:
Sports betting businesses said if taxes go up, their promotions would decrease and odds would get higher…
In a free market you would expect competition so there would be market pressure to not do that. The gamblers would go where the odds are best and the promotions most attractive… unless the gambling lobby spokespeople are telling us all the casinos are colluding to fix these factors in violation of antitrust laws? Surely, that can’t be the case? Not in Chicago. It’s hysterical when a casino flack is bad at bluffing.
- A guy - Monday, May 13, 24 @ 2:12 pm:
Clearly, there are plenty of gaming lobsters who have time on their hands today to comment on the blog.
- SWSider - Monday, May 13, 24 @ 2:23 pm:
It’s my favorite annual tradition: JBP acting like pushing it’s someone else’s job to push for the revenue increases this state needs.
- Rich Miller - Monday, May 13, 24 @ 3:13 pm:
=== who have time on their hands today===
lol
Senate’s not in and House is coming back in a few minutes.
- Primetime - Monday, May 13, 24 @ 4:41 pm:
Not sure I understand the Governor’s point on the sports betting tax. The books are not going to lose money in Illinois. If they are subject to a higher tax they will pass that along to customers in the form of a higher vig (worse odds) or less promos. According to my friends in NY, none of the books offer the sort of promos that we have in Illinois. It’s no different than putting a gross receipts tax on the grocery stores. They may not be able to pass that tax on to their customers directly but make no mistake it will be reflected in the price of milk.
- Frida's boss - Monday, May 13, 24 @ 9:53 pm:
Why would anyone do the offshore betting deals when there is legal gaming? Getting caught offshore gaming can lead to Fed charges. Do you think a bettor who does Fanduel parlays on playoff basketball will risk a Fed charge because the tax rate went up?
How much moonshine is being brought from Kentucky and run all over Illinois because of liquor taxes?