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Missing from budget debate

Personalty conflict is a big part of the state’s budget impasse — but for the major media it’s the only story, and that’s part of the problem.

Take funding for the state’s desperately needed capital budget.  It’s presented largely as a problem between the governor and the mayor over how much the city will pay for a casino franchise.

There’s a lot more to the story, according to Ralph Martire of the Center for Tax and Budget Accountability — a reality that is largely separate from the rhetoric, which is all that seems to get covered.

The vast majority of gaming is in-state, Martire said, and it’s a substitute expenditure — money spent in casinos is not spent at dry cleaners or shoe stores.  But because the majority of casino owners are out-of-state, the profits don’t go back into the local economy, the way money spent at the dry cleaners does.

Compared to public expenditures, which have a large multiplier effect on the local economy — teachers salaries are spent in ways that produce more jobs here — spending on gaming has a significant negative multiplier effect, he said.

Compared to a direct tax — where a dollar for the state costs a taxpayer a dollar — every dollar in gaming revenues for the state costs an Illinois resident five dollars in gambling losses.  And the people providing the revenues are not the wealthiest by far  — they’re low and middle income.

Martire also doubts the short-term gain (and the politicians’ revenue projections), since a new casino in Chicago or the south suburbs is going to attract the same people who are now taking buses to Joliet and Elgin.

To top it all off, it’s a low-wage industry.

It’s a huge net loss for the state, Martire said.

He holds out hope for a realignment of political forces in the veto session, after the election, that could boost chances for real fiscal reform.  CTBA, A-plus Illinois, and others are backing SB 2288, which would balance the budget, increase the tax system’s progressivity and reduce property taxes, provide a permanent revenue stream for schools — and fund the same $25 billion capital program the governor is pushing.  The bill passed the Senate education committee earlier this year by a vote of 6 to 3.

“All the state’s fiscal problems are coming to a head,” Martire said — a tax system that doesn’t grow with the economy, the pension crisis, health care costs, inadequate and inequitable school funding.  In other times, such a crisis would present an opportunity to address basic problems, he said.

It’s the “toxic relationships” in Springfield that have gotten us here, Martire said.

But focusing on the personalities and ignoring the issues that are at stake just recirculates the poison — and fails to point to a way out of the impasse.

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Category: gambling, state budget

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