By Dan Sheridan | Illinois Watchdog
CHICAGO – Just when Cook County tavern owners thought they could enjoy a little extra income from legalized video gaming, the head of the Cook County board is floating a plan to tax the machines.
Board president Toni Preckwinkle last week pitched the idea of imposing an $800 tax on every video gaming machine in Cook County to help plug a shortfall in the county’s budget.
At least one Cook County bar owner is frustrated with the proposal.
“It is nice supplemental income, and any little bit we get in this economy helps. To lose that much, it hurts,” said Gary Taylor, owner of the family-owned Assembly American Bar and Cafe in suburban Hoffman Estates, which has been around since 1978. “It’s disheartening that there’s an opportunity to make more money, and they’re going to tax us more on that now.”
Forty-five Cook County businesses have video gaming licenses, according to figures from the Illinois Gaming Board, which regulates gambling in Illinois.
The video-gaming tax alone is a potential windfall of $1 million for Cook County’s coffers, which are $115 million in the red.
It is unclear how officials arrived at a tax of $800 per video-gaming machine.
Preckwinkle, who released her budget proposal on Thursday, said the tax, as well as others she has proposed, is targeted, responsible and focused on supporting county services.
“These machines generate almost $800 (per) day – we’re asking for $800 per year. They keep their other 364 days of revenue,” she said Thursday. “We use that one day’s revenue to help mitigate the impact of the associated costs of crime, health, addiction.”
Video gaming went online in Illinois earlier this month, and businesses throughout the state have applied for licenses to offer the machines to customers. A 2009 state law allows up to five video poker machines in bars and restaurants, truck stops and fraternal organizations.
Some money generated by the machines goes to capital projects in the state. Cities that allow video gaming can receive 5 percent of the revenue. Chicago and other Illinois communities, on the other hand, have banned the machines.
But local governments applying a tax to video-gaming machines is not something state officials anticipated, said Rep. Lou Lang, a Democrat from Skokie who supports the expansion of legalized gambling in Illinois.
“It flies in the face of the statute we passed, where it may be possible for a county to tax, especially for a home-rule county like Cook, but it wasn’t anticipated they would,” he said. “And so when these businesses put their business models together they were not anticipating this tax.”
Cook County is able to tax the machines because of its home-rule status, which gives it the ability to independently create and collect taxes.
Ultimately, Lang said, additional taxes, like the one Preckwinkle proposed, could cast a chill on job growth.
“The underpinnings of gaming are about revenue and jobs, but it’s also about economic development,” he said.
“In the area of video gaming, there will be lots of bars and restaurants that would avail themselves of the opportunity to have these devices, and maybe eventually rebuild their restaurant or bar, maybe expand it, fix their parking lot up, bring in entertainment, and eventually bring in more staff. So it’s a job creator.”
Preckwinkle also wants to add a $1-per-pack cigarette tax, a nickel-per-bullet tax and tax of $25 per firearm purchased in Cook County to help plug the budget shortfall, she announced Thursday.
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