Unlucky lottery winner gets IOU from state of Illinois

[marmar]

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 what’s funny? If we owed the state money, they’d come take it, and they don’t 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. This is a crock of shit since the lottery payouts are paid with lottery income.

[ProfessorGAC]

3. Still, Unfortunately, Part Of The Overall Budget

The money isn't earmarked. It should be, but it's not.

[Snobblevitch]

5. That's my point.

They need to have a fund which is for lottery pay-outs only. It's not tax money.

[ProfessorGAC]

9. It's Always Been Used As Such Though

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]

19. There is a problem with funding education with lottery proceeds.

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]

24. Same Thing Happened Here

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]

26. More than 40 years ago in Minnesota,

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]

20. Ah, the same scheme that's used for Social Security.

[1939]

29. Thank Lyndon Johnson and the "Unified Budget" NT

[bigwillq]

2. What a joke.

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]

4. I always thought Lottery payouts were based on anticipated revenues.

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]

6. So this guy wins 250 grand and we're supposed...

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]

7. Let me sell you some beach front property cheap

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]

30. This was known before he bought the ticket

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]

8. It's only problematic in some sense...

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]

11. I would hope that sort of thing could be worked out...

but I admit it would be mildly unnerving to see the tax bill so soon.

[ProfessorGAC]

12. You Can, And Would Have To, File An Extension

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]

16. Maryland treats it as a windfall, same as gambling winnings...

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]

22. That Makes Sense

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]

36. I would imagine that a winning lottery ticket

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]

10. “Illinois, New Jersey, Massachusetts, Connecticut and New York rank (as) the bottom five states"

We don't have any problems in Illinois that wouldn't largely be fixed by progressive taxes and fewer thieving republicans.

[MohRokTah]

14. Not enough people came out to keep Quinn in office.

Rauner got in there and the state has been completely fucked ever since.

[ProfessorGAC]

23. Terrible Day in November for Our State

That troglodyte still has 3 and a half years.

[MohRokTah]

13. Ticket sales have gone down.

The only ticket sales that are unaffected are the multi-state lotteries.

[EL34x4]

15. The entirely predictable outcome of not paying lottery winners. (nt)

[Vinca]

17. It could get worse. Do they owe a state tax on the win?

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]

18. They should not be selling tickets, if they can't/won't pay the winners. n/t

[Nye Bevan]

21. Wish I could be that "unlucky" (nt)

[Dawson Leery]

25. For all of the simpletons on this post,

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]

27. Nope. You think those who get their winnings paid over a period of years pay all the tax upfront?

The tax is owed when the winnings are received, not as soon as the ticket is drawn.

[saturnsring]

28. No Rauner is not to blame the voters KNEW what a rat Rauner was and they voted him in anyway

Let's put blame where it belongs

[freeplessinseattle]

31. There were limiting sales of lottery tickets here

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]

32. It should read the Republican legislators had not passed a state budget.

Time and Time again, Republican can not govern!

[Scuba]

33. Illinois has exactly one fiscal problem: an unwillingness to tax those with all the wealth.

[flobee1]

34. I have dealt with the kind folks at collections

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]

35. In Nebraska all winners over $5,000 have to wait two weeks for payment

They want to make sure you don't owe child support, back taxes, etc...