Tourism spending, Springfield investment bill considered as budget deadline nears

By Sean Reed | The Center Square
The Center Square

(The Center Square) – Multiple proposals that could increase funding targeted at increasing tourism in Illinois are under consideration for the coming year’s state budget.

Present in the wider “Megaprojects” proposal, State Sen. Doris Turner, D-Springfield, amended an unrelated bill to be replaced by her “Capital Area Tourism Authority” legislation, which she said was done in an attempt to ensure her initiative can pass regardless of the status of the bill that would support an Arlington Heights stadium for the Chicago Bears.

According to Turner, the legislation would allow for state bonds to support the development of the downtown area in the state’s capital city, including a new hotel. The city’s downtown has seen a high rate of turnover for small businesses and a decline in tourism in recent years.

“These bonds would be funded and backed by certain pledged sources of revenue from the county, city, and state, which will include a county-wide hotel tax, local sales taxes from business transactions occurring within the district and state sales tax increment,” Turner said.

Speaking for the Illinois Hotel and Lodging Association, Keenan Irish shared that the organization is opposed to the measure due to the county-wide hotel tax and the feasibility of the project.

“We just have concerns about the feasibility of the project and what happens if the revenues are not enough to pay for the bonds,” Irish said. “Who’s going to have to pay them off and who’s going to bear that responsibility?”

In a separate statement to The Center Square, Irish said the proposal could leave local, county and state taxpayers on the hook to pay for the project, even if the planned projects don’t succeed.

Irish explained to lawmakers that the proposed hotel tax increase is a 3% hike, raising the tax paid on a hotel room from 14% to 17%, noting that Springfield hotel tax rate would then be the second highest in the state, only behind the City of Chicago.

In a separate hearing Thursday, an initiative being considered for the state budget would adjust where state hotel tax funds go.

Great Rivers and Routes Tourism Bureau President and CEO Cory Jobe told lawmakers that the portion of the state’s hotel tax that is put back into tourism in the state has remained flat since 2020, despite what he said is a significant return on investment for state taxes and benefit to small businesses.

“The tourism sector plays a vital role in Illinois’ economy, driving job creation, economic growth, and supporting our small businesses and communities across the state,” Jobe said.

Jobe said 73% of all hotel tax funds are put back into the state’s general revenue fund, and another 22% of the revenue goes toward paying off debt related to redevelopment of Soldier Field in Chicago – which the state has been contributing to since 2002.

The final state budget is expected to pass by the end of this weekend.