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Springfield public hearing - September 13, 2002 Tom
Swoik, Executive Director for the Illinois Casino Gaming Association My name is Tom Swoik and I am the Executive Director of the Illinois Casino Gaming Association. The Association represents the nine riverboat casinos currently operating in the state of Illinois. The Association's mission is to promote the interests of Illinois' casino gaming industry through advocacy, communication and education. To that end, we promote responsible gaming that benefits our state and local economies and provides employment and entertainment for Illinois citizens. These nine businesses have thousands of shareholders, pay various business taxes and employ more than 11,000 people; last year, we paid those employees more than $376 million in wages and fringe benefits. To give you a sense of our impact as a business, our number of employees is near to that of companies like American Airlines and Allstate. We also contributed over $450 million in taxes to public schools in Illinois through the Education Assistance Fund and more than $108 million in taxes to local governments. The revenues the state realizes from the riverboat gaming industry are currently transferred into the Education Assistance Fund after payments are made back to local communities and the Illinois Gaming Board's expenses are paid. The riverboats have been operating since 1991. During this 11-year period more than $2.5 billion has been transferred into the Education Assistance Fund. I am here today to discuss the casino gaming industry's impact on Illinois' economy, and how several items in your preliminary report reflect our position. It is our belief that a healthy casino industry is good for our communities and our schools. Like you, we believe in policies that solidify the tax base and at the same time stimulate the state's economy in more indirect-but no less real-ways such as jobs and investments. The key premise in your report-and in our industry's mind-is that higher taxes can sometimes be a counterproductive way of attempting to raise state revenue. The stimulation of business and incentives for growth can have more profound and lasting benefits for the tax base of the state's economy. In your preliminary report you quote a paper prepared by economist Doug Kane, who said, "First, whatever government does should make communities better places to live, and Illinois a more competitive and a more attractive place to work and locate a business. Second, no tax should be excessive, taxes should be broad and general: tax rates should be as low as possible." Several other points in your report speak to the gaming industry's position on how to grow the state's economy while broadening the tax base through forward-thinking tax policies. For example: No tax should be excessive, taxes should be broad and general; tax rates should be as low as possible. We can move toward those two goals by adoption of the policy that each of our major taxes should be set so that they are the median of the 50 states. Develop state replacement revenue in a fair, efficient and reliable manner. Balance tax burden
and relief for businesses and individuals All of these recommendations are vitally important if the businesses I represent are to remain vibrant economic engines for the state. Recommendation number 5 in the preliminary report states, "Gaming revenues should be increased." We believe that your goal of increasing gaming revenues-which means increased funding for the Education Assistance Fund-is absolutely compatible with the dual objective of broadening the tax base while at the same time growing the state's economy. We believe revenue increases can be accomplished without a tax rate increase. Last spring, several proposals were introduced in the General Assembly that would have done just that. These proposals would have raised the tax revenue from casino gaming even higher than the bill the General Assembly eventually passed. The bill passed raised our tax rate on the highest levels of income to 50% of our gross gaming revenues, while I believe other corporations in Illinois have a 7.3% top tax rate on their net revenues. And by the way, we pay both of those taxes. The net increase in tax revenue from the alternate proposals would have been generated through the addition of slot machines and games at existing casinos. Under that scenario, the taxes collected would grow due to increased activity at the casinos and the industry would be able to grow jobs, draw additional business and keep investing in Illinois' communities. We see such steps as key to the state's long-term economic health, and hope these ideas are incorporated into the state's fiscal planning. In addition, the awarding of the tenth riverboat casino license will bring additional revenue to the state. The tenth casino, like the nine others in the state, will provide good jobs, more business for Illinois suppliers and millions of dollars in state and local tax revenue. We support your efforts
and together we can work to increase the funding the gaming industry provides
for schools while stimulating Illinois' economy.
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