Author's Update: The Illinois Lottery disagrees with the characterization that a promise to pay in the future is an IOU, reaching out to say, "At no time has the Illinois Lottery issued an ‘IOU’ to winners, nor does it plan to do so." The Lottery has released the following statement:
“Due to the ongoing budget situation in Springfield, some lottery winner payments have been delayed. All winners will be paid in full as soon as the Lottery and the Illinois Comptroller have the legislative authority to do so. Currently, winners may claim prizes under $600 at any of our 8,000 retail locations, and prizes under $25,000 may be claimed at any Lottery claims center, found at illinoislottery.com.”
On July 20, Danny Chasteen and his girlfriend, Susan Rick, hit it big in Illinois. Chasteen bought a winning scratch off ticket worth $250,000. There's just one big problem: he has yet to collect.
Chasteen is one a number of winners, including recent million dollar winner John Groth, who didn't receive a check from the state of Illinois but rather an IOU. That's right, a promise to pay.
Why won't the state pay up now? Money troubles.
The state swears that it has the money to pay Chasteen but is barred from doing so. By law in Illinois, the state comptroller is responsible for issuing checks when lottery winnings exceed $25,000. However, as part of the ongoing budget impasse in the Prairie State, the comptroller isn't currently authorized to sign off on those lottery winnings. The result? Big dollar lottery winners in Illinois are losing, well, big. On the other end of the spectrum, lottery winners are doing just fine: those who won prizes less than $25,000 aren't subject to the same restrictions and can cash with no problem.
Those budget restrictions aren't likely to end soon: Illinois just entered its third month of the fiscal year without a budget. While the fiscal year officially starts on July 1, Illinois' new Gov. Bruce Rauner and lawmakers have yet to agree on how to fund the state's billion dollar budget, as well as how much to spend. That means most state services are on hold with the exception of pieces of the budget which have been approved on an "as needed" basis. The education budget, for example, was signed so that Illinois kids could go back to school this fall. And, of course, legislation was signed to make sure that lawmakers get paid: lottery winners, however, do not.
What seems to be the hold up? Taxes are a huge part of the problem. The Democratic majority says that a tax increase is necessary to keep the lights on through 2016. Gov. Rauner isn't opposed to a tax increase but has insisted that he won't approve any boosts unless the legislature signs on to other parts of his fiscal year plan which includes property tax caps, union controls and tort reform. Even if the Democrats relented (spoiler alert: they won't), a tax increase won't be enough.
Rauner had campaigned on a platform of tax cuts and, as one of his first orders of business, allowed a temporary tax increase put in place by his predecessor to expire. That meant that taxpayer caught a break with a drop in individual tax rates from 5% to 3.75% and a drop in corporate rates from 7% to 5.25%. The dip in revenues, however, hurt the state. To make up the difference, the governor and the legislature have considered reinstating the "temporary" (this time it gets quotes) tax increase. However, last month, Moody’s Investors Service voiced concerns that even with a tax hike, Illinois would still be in the hole for the upcoming year. The problem, says
With no end in sight, Chasteen isn't sure when he'll get paid. The news isn't slowing down other lottery hopefuls: according to a local news station, there is no indication that lottery sales have been impacted by the lack of available cash.
