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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsUnlucky lottery winner gets IOU from state of Illinois
Winning the lottery is typically cause for jubilation. Not so for Danny Chasteen who, instead of a big payoff, got an IOU from the fiscally strapped state of Illinois
Chasteen and his girlfriend, Susan Rick, won $250,000 last month in the state lottery but could not claim the prize as legislators had not passed a state budget, according to reports.
For lottery winnings exceeding $25,000, the state comptroller has to process the check, and, with the budget in limbo, those funds cannot be disbursed, the Chicago Tribune reported.
You know whats funny? If we owed the state money, theyd come take it, and they dont care whether we have a roof over our head, Rick said, according to the Tribune.
.....(snip).....
Illinois, New Jersey, Massachusetts, Connecticut and New York rank (as) the bottom five states, largely owing to low amounts of cash on hand and large debt obligations, said Eileen Norcross, a senior research fellow at the Mercatus Center.
http://www.marketwatch.com/story/unlucky-lottery-winner-gets-iou-instead-of-prize-2015-08-31
Snobblevitch
(1,958 posts)ProfessorGAC
(64,413 posts)The money isn't earmarked. It should be, but it's not.
Snobblevitch
(1,958 posts)They need to have a fund which is for lottery pay-outs only. It's not tax money.
ProfessorGAC
(64,413 posts)Remember that the original sales point was that the excess would fund education. Then in a monumental display of laziness, they found it easier to just add it to the general fund.
As a result, the education funding in Illinois is still preponderantly based upon property taxes and apportioned that way. So, the inequity in district funding is still there and the overall funding of education hasn't kept up with inflation.
Stupid? Yes. Shady? Yes. Fact of life? Alas, yes.
Snobblevitch
(1,958 posts)Florida does the same thing, now they don't get any money from the general fund and their schools seem to be underfunded. This happened many years ago.
Minnesota was smarter than that. I think both houses were controlled by Democrats. 40% goes to an environmental fund and the rest goes to the general fund. Also, in Minnesota, the lottery director is appointed is a professional lottery manager, never a political appointee.
ProfessorGAC
(64,413 posts)Exactly as you described. That's why the district to district disparity did not improve. Property taxes are still the primary variable in the funding equation. There isn't extra money, just the same money from a slightly different source.
Snobblevitch
(1,958 posts)the legislature passed what was then called the Minnesota Miracle. Led by Democratic Governor Wendy Anderson, they passed legislation making school funding equal statewide. No longer were there poor school districts and rich ones, at least on paper. This was for education funding. Each school district still has to pass bonds for buildings, athletic fields, etc., but most of the funding is done through the state.
(As an aside, Governor Anderson got greedy. He was popular, won his elections by large margins, but then he appointed himself to Senator Mondale's open senate seat. People in Minnesota didn't like that and he lost the general election. If he would have appointed a caretaker, he would have won the general election and probably would have served several terms in the senate.)
Matariki
(18,775 posts)1939
(1,683 posts)bigwillq
(72,790 posts)Like the article said, if we owed these states money, they would come and take the money ASAP.
This man needs to get paid, ASAP.
I see how Connecticut was mentioned. Not surprised. That state is mess. I live there.
lpbk2713
(42,696 posts)IOW ... I thought they paid out a portion of what they expected to bring in on
any given drawing. Is someone stuffing a piece of the take in their sock?
TreasonousBastard
(43,049 posts)to feel sorry for him because it'll take an extra month for him to get the money?
C'mon, if the budget is frozen, there are people who worked for the money who aren't getting paid on time.
GummyBearz
(2,931 posts)Its located in Nevada, but California will sink into the ocean eventually. You pay me some chump change now and in the future you can move into the beach house!
Just send $10K to my paypal account, I will PM you the info.
Travis_0004
(5,417 posts)if he was unhappy with it, he could have refused to buy a ticket that week.
He will get his money in a month or so, I imagine he will survive.
Chan790
(20,176 posts)when I worked at the bank, I had a lottery winner. They paid him on a Tuesday after he claimed his win...but the state office of revenues billed him on Monday to collect their tax revenues (He had 30 days to pay so it wasn't an issue) because they're run entirely separately and the income had already been reported to them.
Now, imagine you won $250,000 in the state lottery which they wouldn't pay until Oct. 1 but you had 30 days from Aug. 26 to pay the taxes on your $250,000 windfall (We'll say $10,000 to make it a nice round number) or else you'd be charged with tax-delinquency and face fines and possibly jail-time. Do you have a spare $10k you can lend yourself to pay the state until the state gets its financial house in order to pay you the money they owe you?
TreasonousBastard
(43,049 posts)but I admit it would be mildly unnerving to see the tax bill so soon.
ProfessorGAC
(64,413 posts)Which is really easy because you don't actually owe the taxes until April 15 next year. (That's our deadline in IL for state taxes.)
With large sums, it may be required to file quarterly (i'm not sure) so then your scenario comes into play. But, filing an extension based upon not actually having the money yet would be hard for IDOR to ignore.
Chan790
(20,176 posts)and inheritances over $2M.
It's basically taxable immediately so you can't spend the money before you pay them. There have been issues with people winning big (often on the Belmont Stakes) then being broke before tax day came...so they moved to collect ASAP and refund if necessary after tax-day when you file.
Yes, pretty sure you can file an extension...but being Maryland, I can see the person responsible for processing the extensions being furloughed as non-essential.
ProfessorGAC
(64,413 posts)They likely do that in IL, but i think they simply withhold from the payout. They're controlling the payout so they just withhold the taxes that will be owed.
Somebody from Illinois one a huge lottery (around $200 million) and with the TVM calculation it came out to something like $110, but all he got was a money transfer to an investment house for 65 million. They didn't send him the whole $110 million.
Mariana
(14,847 posts)would make pretty damn good collateral for a loan to pay the taxes. Then the loan could be paid in full when the winnings are paid. It would suck to have to pay the interest on the loan, but for such a short term it wouldn't be much.
Gidney N Cloyd
(19,780 posts)We don't have any problems in Illinois that wouldn't largely be fixed by progressive taxes and fewer thieving republicans.
MohRokTah
(15,429 posts)Rauner got in there and the state has been completely fucked ever since.
ProfessorGAC
(64,413 posts)That troglodyte still has 3 and a half years.
MohRokTah
(15,429 posts)The only ticket sales that are unaffected are the multi-state lotteries.
EL34x4
(2,003 posts)Vinca
(50,168 posts)If so, they could be stuck with the I.O.U. for the winnings and get a bill in the mail telling them to pony up thousands in taxes on the money they won that hasn't appeared. The IRS will be looking for a piece of the action, too.
KarenS
(4,024 posts)Nye Bevan
(25,406 posts)Dawson Leery
(19,348 posts)the winner has an immediate tax bill due. They will face fines and possible jail time if they do not pay.
Mr. Chasteen better be granted an immediate extension without question.
Remember, s**tbag mongrel Rauner is to thank for this.
Nye Bevan
(25,406 posts)The tax is owed when the winnings are received, not as soon as the ticket is drawn.
saturnsring
(1,832 posts)Let's put blame where it belongs
freeplessinseattle
(3,508 posts)recently, due to state budgetary reasons, a sign said. Really didn't give me much confidence in my state (especially now with my mom in her 4th day without power:/
B Calm
(28,762 posts)Time and Time again, Republican can not govern!
Scuba
(53,475 posts)flobee1
(870 posts)Long ago i had to deal with these folks. Student loans collections were the worst. I would immediately become a combo of all of them. I would be on the phone twice a day, maybe 3. I would show up at their place of work to collect. I would tell them to sell some of their property in order to pay me. I would give them a 28 percent interest rate on repayment, and bill them for the legal fees to do so.
I have seen predatory lending. I could become a combo of the worst of them at the drop of a hat.
Omaha Steve
(99,061 posts)They want to make sure you don't owe child support, back taxes, etc...