Courts call the shots for budget-less Illinois.
CHICAGO – The state of Illinois reached an agreement to terminate the contract of Northstar Lottery Group, the private company managing the state’s lottery, the governor’s office said Friday. CHICAGO • Caught in a political stalemate that has forced it to operate for nearly three months without a budget, Illinois’ spending decisions are increasingly being made by courts and at a rate that is further deepening the state’s fiscal woes.SPRINGFIELD, Ill. (AP) – The Illinois Lottery lost money last year for the first time since 2009, reducing the amount of money it generates for state programming by $125 million, according to a new report from the Illinois Legislature.
The standoff between the Republican governor, a political newcomer, and the Democratic-controlled Legislature is affecting everything from the ability of lottery winners to collect their cash to state workers’ health care payments. In the weeks since fiscal 2016 began on July 1, U.S. and state judges have ordered Illinois to pay its workers and adhere to federal consent decrees mandating certain health care and social service programs. Barclay said in a news release that the deal is an instant win for taxpayers because it immediately saves them $22 million, the amount Northstar would have received in an exit deal negotiated a year ago by former Gov. The courts have ordered spending at levels in place in fiscal 2015 when revenue totaled about $36.6 billion due mainly to higher income tax rates that expired on Jan. 1. “The courts in many ways are running our government because the Legislature has failed to pass a balanced budget,” Nuding told a state Senate hearing last week.
The new agreement allows the private manager to select its own suppliers, Barclay said, a change from the Quinn administration’s deal that would have forced to give option rights to Northstar’s parent companies, GTech and Scientific Games. “This is a new day for the Illinois Lottery,” Lottery acting director B.R. Governor Bruce Rauner sent a memo to lawmakers on Thursday, warning that the longer it takes to resolve the budget impasse with Democrats, “the cuts we will have to make become deeper and what we ask of taxpayers will be steeper.” Illinois and Pennsylvania are the only two states still fighting over a budget past their July 1 deadline, according to the National Conference of State Legislatures.
Lane said. “This agreement will save the taxpayers hundreds of millions of dollars while allowing the Lottery to select a new partner that will help the agency grow and better serve its customers.” Northstar, which was hired in 2010 to increase sales and profits, has been criticized for several years over its management style of the Lottery. Arturo Perez, an NCSL analyst, said the fact that neither state was able to put temporary spending measures in place has opened the door to court intervention. The legislative report painted a grim picture of the state’s relationship with Northstar, saying it has consistently failed to meet profit targets, gone to arbitration with the state numerous times, repeatedly paid penalties for not meeting targets and failed to expand the number of lottery retail outlets as promised.
Lottery players in Illinois who have won prizes of $25,000 or more and who have not been paid since July 1 due to the lack of a budget filed a class action in federal court. Clair County Court to force the state to fund health care coverage after it stopped paying claims, according to AFSCME spokesman Anders Lindall. “There is a substantial possibility that state employees will forego needed medical care, either because they will not be able to afford to pay for the care up front at the time of service, or because they fear that medical care providers will demand such payments up front,” the unions’ complaint states.
Other big-ticket items, such as bond and pension payments, are being paid through continuing appropriations, which total about $8.9 billion, according to Nuding. Clair County Board chairman, said Illinois is close to being $6 million in arrears on money earmarked for the county’s 911 emergency communication system and probation department.