PLAINFIELD, Ill., July 10 /PRNewswire-FirstCall/ -- Diageo (NYSE: DEO), the world's leading spirits, wine and beer company, which has over 400 Illinois-based employees, is urging Governor Quinn to veto a proposal that calls for an 90% tax increase on spirits and wine, and a 25% tax increase on beer in light of a new study that found Illinois has grossly underestimated the revenue a new tax on video gaming will bring into the state. The Legislature's estimate is $165M too low, and given this new information it is clear that Governor Quinn can strike the alcohol tax increase from the budget, saving an estimated 4,500 hospitality industry jobs in IL.
The new study, conducted by Arduin, Laffer & Moore Econometrics (ALME), found that based on the experiences of other states that have legalized video gaming, the Illinois State Legislature's $375 million revenue estimate is far too conservative. ALME estimated that the average revenue experience from other states could justify revenues of at least $540 million - or, a $165 million tax revenue windfall for the state of Illinois. The report found revenue forecasts could be as high as $1.7 billion, more than 10 times the $114 million in revenues the state anticipates it will receive from the proposed alcohol taxes.
"Governor Quinn has an opportunity to protect the jobs of hardworking citizens of Illinois by using his veto power to remove this unfair and damaging tax hike from the bill that is currently on his desk," said Joshua Sanders, Senior Director of State Government Relations for Diageo. "The hospitality industry in Illinois has already suffered enough during this recession and an increase on the alcohol tax would be another major strike against the local businesses that are the backbone of Illinois's economy."
Diageo and the beverage alcohol industry's significant fiscal contributions to the state would be put at risk if the taxes are increased. In addition to employing more than 400 people in Plainfield and Chicago, Diageo contributes approximately $1.2 million in local property taxes and $1.2 million in payroll taxes to the state. The alcohol beverage industry in Illinois employs more than 131,000 people in Illinois, contributes more than $3 billion in wages and nearly $979 million in state and local taxes.
Sanders continued, "It's clear that Governor Quinn has another means by which he can help raise revenue for the state and address its budget issues. We hope that he will do the right thing and work to create jobs, not cut them."
Diageo (Dee-AH-Gee-O) is the world's leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, wines and beer categories. These brands include Johnnie Walker, Guinness, Smirnoff, J&B, Baileys, Cuervo, Tanqueray, Captain Morgan, Crown Royal, Beaulieu Vineyard and Sterling Vineyards wines.
Diageo is a global company, trading in more than 180 countries around the world. The company is listed on both the New York Stock Exchange (DEO) and the London Stock Exchange (DGE). For more information about Diageo, its people, brands, and performance, visit us at Diageo.com. For our global resource that promotes responsible drinking through the sharing of best practice tools, information and initiatives, visit DRINKiQ.com.
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