Powerball, Mega Millions to drop Illinois due to budget crisis

Store clark Malik Imran looks outside the window of the store, Thursday, June 8, 2017, in Chicago. The Powerball jackpot has grown up to $435 million, after more than two months without a winner. The jackpot for Saturday night's drawing would tie for the nation's 10th largest lottery prize. (AP Photo/G-Jun Yam)

The Multi-State Lottery Association, or MUSL, which runs the Powerball and Mega-Millions lottery games, intends to drop Illinois from its games due to concerns over the states fiscal crisis, according to the Chicago Sun-Times. At the end of June, Illinois will no longer participate in these lotteries if the state remains without a budget. As Illinois approaches its third fiscal year without a budget, MUSLs looming departure illustrates the wide-ranging effects of Illinois fiscal irresponsibility.

Concerns about the Illinois Lottery began in August 2015, when the state had gone without a budget for nearly two months, and the comptrollers office announced it would not be able to make payments on winnings over $25,000. A month later, the Illinois Lottery announced it would not pay lottery winners until the state government passed a budget. As payout became unlikely, Illinois Lottery ticket sales sank, and disgruntled winners sued the Illinois Lottery, demanding their payouts with interest. In December 2015, the state passed legislation that freed up some cash to disperse to unpaid winners of the preceding five months, along with others who had gone without state payments during the budget gridlock, including highway departments and social service providers.

The effort temporarily quieted complaints, but Illinois fiscal crisis dragged on. In 2016, the Illinois Lottery threatened to again cease payouts, but a last-minute stopgap compromise postponed a second disaster.

2017 has seen no progress toward a sustainable, balanced budget, and Illinois fiscal situation remains unstable as ever. In fact, just two weeks before MUSLs announcement, S&P downgraded Illinois credit rating to BBB-minus. At the beginning of June, Moodys lowered Illinois to a Baa3 credit rating. Both ratings are just one rating above junk status. Illinois is the only state with such a poor credit rating.

Given the recent history of Illinois fiscal policy, and given the Illinois Lotterys dependence on the state government for payouts, it should come as no surprise that popular lottery games no longer wish to play with Illinois. The budgetary uncertainty combined with some of the highest effective taxes in the country build an economic environment hostile to consumers and businesses alike.

Illinois does not need to doom itself to fiscal instability and the loss of businesses and residents. The Illinois Policy Institutes Budget Solutions 2018 shows how Illinois lawmakers can close the budgetary gap without oppressive tax hikes by addressing major cost drivers such as the pension system, eliminating wasteful spending and streamlining programs. With smarter spending policies, Illinois can stabilize its economy without further burdening its residents with more tax hikes.

MUSLs impending departure is unsurprising, but it is indicative of how vital it is for Illinois to enact a responsible, pro-growth budget.

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