Eye On Illinois: Tweaks to sports betting tax should more than cover child credit program

Government is about working for the public. Politics is about perception.

Consider the child tax credit for Illinois families taking effect in 2025. Lawmakers are proud of the $50 million program and plan to double it the following year.

A Daily Herald analysis quoted the Center for Tax and Budget Accountability, a Chicago-based nonpartisan government finance research group, which has pushed for a statewide child tax credit linked to the earned income tax credit.

“Its refundability feature also makes the CTC effective at making tax policy fairer, because, like the EITC, the CTC functions to offset taxes other than income taxes – like sales, excise and property taxes – which place a disproportionate burden on lower-income earners,” according to the 2022 analysis.

The campaign ads write themselves. But in one light, $50 million is only a sliver of an overall spending plan figured at $53.1 billion. From another angle, the maximum tax break is $300 for one child aged 12 and younger. Only 13% of Illinois’ personal income tax filers got EITCs in 2022. The qualification thresholds are $53,120 for joint filers and $46,560 for individuals.

If your gross monthly income is $3,880, an extra $25 is helpful, but not transformative. That said, it’s more meaningful than the elimination of the statewide grocery tax, which works out to roughly 40 cents per Illinoisan each week.

And how are lawmakers affording this new $50 million program? By tweaking and increasing the tax rates on sports gambling operators. The two hardest-hit entities here are FanDuel and DraftKings, the only books to take in more than $100 million last year.

Under the old system, FanDuel owed about $62 million in state taxes on its $411 million in revenue, while DraftKings paid roughly $48 million on $319 million. With the new math, FanDuel would owe $145 million and DraftKings would pay $109 million. Neither entity is thrilled about the hike, but the bet lawmakers made is obvious: banking on the public to support their vision of Peter and Paul.

Capitol News Illinois said the sports betting tax will bring almost $200 million into the general revenue fund, joined by $35 million from video gaming terminal operators targeted for infrastructure spending.

That’s altogether more than enough to cover the child tax credit. Without detailing where the rest of the new money will go, it’s interesting to consider how the entire issue might appear had the books just offered to pay $50 million into a social safety net fund. Perhaps they’d be the heroes instead of the victims.

Entirely absent is a plan to keep anyone from spending their new child tax credit check on NFL parlays, but that service could spotlight perceptions about practical applications of sin taxes.

• Scott T. Holland writes about state government issues for Shaw Local News Network. Follow him on X @sth749. He can be reached at sholland@shawmedia.com.