CHICAGO — Backed by organized labor leaders, a Democratic lawmaker yesterday pressed his colleagues to support a plan that would permit electronic gaming at Illinois’ six horse-racing tracks to ensure funding remains stable for the state’s $31 billion capital program.

The proposal — also being pushed by the horse racing industry that would reap its financial benefits — could generate an initial $100 million in license fees and then $100 million to $300 million annually in new revenue, according to the plan’s sponsor Rep. Will Burns, D-Chicago.

Burns is pushing the plan as a response to concerns that have been raised over the viability of revenue sources approved by the General Assembly last year to support the new capital program.

“We’ve waited far too long for a new capital construction plan to meet critical infrastructure needs across the state, and we cannot wait any longer,” Burns said. “This plan is the key to providing the revenue we need to keep those projects on track — and to putting our men and women back to work as quickly as possible.”

Burns was joined by key labor leaders that represent Chicago, Cook County and state labor organizations that also stand to benefit from the infusion of funding for capital projects in the multi-year plan.

The capital budget relies on a mix of local matching funds, federal grants and $19 billion in state borrowing. Debt service is to be repaid through transportation revenues and from additional revenue expected from the imposition of a series of taxes and fees that are supposed to generate between $943 million to $1.2 billion more annually.

They include statewide legalization and taxation of video poker at local establishments projected to raise $288 million to $534 million; expansion of the sales tax to cover candy, sweetened beverages and some hygiene products projected to raise $65 million; leasing a portion of state lottery operations to raise $150 million; an increased per-gallon tax on beer, wine, and liquor that is supposed to raise $108 million; and increased license and vehicle fees that are expected to raise $332 million.

So far, more than 50 communities have opted out of allowing video poker. Chicago already has a prohibition on video gaming. Revenues are expected to fall between $100 million and $200 million short of estimates. The lease of the marketing operations of the lottery has been delayed until at least September. The alcohol tax has generated $45 million so far but most of it is being held in escrow because a complaint was filed last year that contends the tax violates state law because its higher on spirits than beer.

“If the state issues the proposed $19 billion in new capital debt over the next five years, any shortfall in the revenues passed to pay for the debt service will lead to additional stress on the state’s operating budget,” the Chicago Civic Federation warned in a report issued earlier this week.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.