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Daley on Quinncome tax: Change it; Cig tax advances

Tuesday, Mar 31, 2009

* 12:21 pm - Looks like a revamp may be coming

Chicago Mayor Richard Daley said if income taxes go up under Governor Pat Quinn’s proposal, property taxes should go down. Quinn wants to raise the tax to four-and-a-half percent, but the mayor says if it’s going to happen, property owners need some tax relief.

For years, the mayor has advocated what some call a tax swap, wherein the income tax would be raised only if property taxes were lowered a corresponding amount. The mayor said his position on increasing the state income tax has been a long-standing one. […]

“Taxpayers are, first of all, losing their homes,” said Daley. “They are losing their homes. They are losing their jobs. Or someone in the home has lost their job. They are not getting overtime. Some have lost their pensions. There has to be property tax relief. You cannot increase (income) taxes without property tax relief, simple as that. People can’t pay these property taxes.”

Daley wants local governments to get their traditional slice of any income tax increase (Quinn uses that 10 percent share for his capital bill), so this property tax thing could be a negotiating ploy. But it also strengthens Sen. James Meeks’ hand while he negotiates for a tax swap. You can bet the house (and the Senate) that Chicago legislators and the governor and everyone else in politics in this state are taking note of Daley’s remarks.

The governor’s spokesman was surprised that Daley held a news conference to comment on the Quinn budget plan.

I’ll bet he was.

* 12:27 pm - From Lee Newspapers

A day before the federal tax on cigarettes jumps $.62, a Senate committee voted to phase in another $1 increase for Illinois over two years.

* 12:49 pm - More Daley react

“We get no benefit,” the mayor said at a news conference at a school on the South Side. “Then why should anybody be for it?”

The mayor called on the state to expand property tax relief if it is going to raise the income tax.

“You cannot increase the income tax without property tax relief,” he said, noting the high rate of foreclosures.

Daley also complained that the city would only get $54 million in new education funding from the state under Quinn’s budget, saying the schools need an increase of $200 million.

- Posted by Rich Miller        


30 Comments
  1. - Ghost - Tuesday, Mar 31, 09 @ 12:26 pm:

    I guess Daley lowered the Chicago property tax when he raised the sales tax…

    Daley: lets od a zero sum game where we increase on tax and decrease the other for no net change in revenue? This of course will decimate schools funded by property taxes, and besides, Chicago has way too low a property tax rate anyway.


  2. - Cassandra - Tuesday, Mar 31, 09 @ 12:48 pm:

    Daley, like Lisa Madigan, is smart enough to publicly express concern for the plight not only of the poor but also, increasingly, of the plight of the middle class in Chicago, Illinois, and the country as a whole.

    This may or may not be political opportunism on the part of either of these powerful and, in the case of Lisa M., ambitious pols, but expressions of sympathy go a long way and are remembered by the electorate.

    Quinn, while giving lip service to the plight of
    people at the lower end of the income spectrum, comes across as less sympathetic, more interested in getting lots of money for state government, however dysfunctional. He has kept many Blago holdovers in important posts (perhaps because he doesn’t have the clout to remove them) including budget posts. He hasn’t really cut much and his budget proposal is likely be rewritten to protect powerful business interests and unions, leaving the middle class bearing an even larger share of the burden.

    This will be remembered in February. A little sympathy goes a long way, fair or not, and Quinn just doesn’t seem that sympathetic.


  3. - the Patriot - Tuesday, Mar 31, 09 @ 12:50 pm:

    Ghost makes a good point. Since the state is not making state aid payments to schools aready, where will they be funded if real estate taxes are cut. The state already is not making state aid payments. Why would local schools give up their one reliable source of income? Where is the IEA/NEA on this issue?

    I like the idea of an income tax/property tax swap. The problem is it is probably a wash for the wealthy, but it will put more pressure on low wage earners who do not own property now. This is counter to the “redistribution of wealth” mandate of the current democrat party.

    The reality is, this will end up like the stimulus bill. Use money for schools and infrastructure to justify the swap, then a small % actually gets to the school and infrastructure.


  4. - Bobs yer - Tuesday, Mar 31, 09 @ 1:22 pm:

    Have to admit it, I do like the trend of Democratic politicians talking about lowering taxes of any kind. Sort of novel.


  5. - Retired Non-Union Guy - Tuesday, Mar 31, 09 @ 1:24 pm:

    Right now this is all PR posturing.

    But if the property tax swap proposal gains traction, the only way it should be approved is if (a) the State makes up the lost revenue difference to the school districts in such a manner the State can’t waffle on the commitment later which will require a higher income tax rate or lower exemption level, (b) there is an iron-clad bullet-proof, “tar and feather the politicians and school boards if they renege” guarantee in place to prevent the local taxing districts from coming back 6 months or a year later and increasing the property taxes back to the previous level, and (c) the property tax relief should be a direct cut by the local taxing bodies.

    Ain’t going to happen that way … closes off too big a future money pot. Every income tax / property tax swap proposal I’ve seen to date doesn’t include those provisions … so all they are doing is giving a bit of temporary property tax relief in exchange for a bigger pot to take money out of later.

    If anything does get pushed, my guess is it will be proposed in the form of another tax credit against the income tax … which does nothing for seniors and renters.


  6. - Rich Miller - Tuesday, Mar 31, 09 @ 1:28 pm:

    ===Right now this is all PR posturing. ===

    There’s more to it than that.

    One word: Subscribe.


  7. - The Doc - Tuesday, Mar 31, 09 @ 1:29 pm:

    Bobs yer, Daley is simply trying to shift blame and potential political fallout onto Quinn. If an income tax increase accompanies a property tax decrease, I’ll bet you a dollar Daley throws a tirade blaming Quinn when city residents and businesses suffer under the weight of the income tax increase.

    I wonder if Daley realizes that his TIFs will also see a signifcant decrease in revenues, since they are funded by property taxes.


  8. - Anonymous45 - Tuesday, Mar 31, 09 @ 1:32 pm:

    C’mon…Daley wouldn’t call out Blago on his crazy budget ideas, but lambastes Quinn on his?

    Richie is clearly pandering for the black vote in his next re-election campaign…he continues to rob the city blind with his patronage baloney, not needed O’Hare expansion plans, State Street subway rehab, Block 37 etc. and he has the audacity to criticize a Governor who took over this clustermuck a couple of months ago?

    Put yer own house in order, work with Quinn to make it work better or stuff a sock in it will ya?

    Chicagoans re-elected Daley last time in spite of the way he governs because the city still worked…not so now with the economic downturn
    with a loss in quality of life issues in the neighborhoods…the next election looms large for
    Da Mare…


  9. - Rich Miller - Tuesday, Mar 31, 09 @ 1:34 pm:

    ===Richie is clearly pandering for the black vote in his next re-election campaign===

    In this context, that didn’t make a lot of sense.

    What is with some white folks who always want to mention the concept of pandering to black folks?


  10. - Chicago Guy - Tuesday, Mar 31, 09 @ 1:46 pm:

    Give me a break. The biggest taxer, the biggest spender, the biggest debt increaser of all time, Mayor Daley, somehow has credibility on what’s responsible and fair state taxation?


  11. - Jacksonville - Tuesday, Mar 31, 09 @ 2:16 pm:

    If they keep increasing the tax oncigaretts because of the health care cost, when are they going to start taxing overweight people at the same tax rate. They add to the health care cost at the same rate as smokers. Call it a fat tax rather then a sin tax.


  12. - lurking moderate - Tuesday, Mar 31, 09 @ 2:24 pm:

    What about the taxes on alcohol? Shouldn’t those go up to?


  13. - Anonymous45 - Tuesday, Mar 31, 09 @ 2:33 pm:

    Rich,

    Are you sure I am white? Why?

    I am calling Daley out on the fact that he cozies up to the black community when it suits him politically…that’s what he is doing with Sen. Meeks just like Blago did with Meeks…promise him anything, make nice, and make sure he’s not a political threat, then turn your back on him when it suits you…


  14. - Beerman - Tuesday, Mar 31, 09 @ 2:40 pm:

    No!


  15. - VanillaMan - Tuesday, Mar 31, 09 @ 3:06 pm:

    Daley is saying that he is concerned that Chicagoans who are struggling, cannot afford the property taxes he has imposed on them. So, with Quinn piling another tax upon them, the Mayor is even more concerned.

    As a result, the Mayor is saying that Illinois governments can only take so much from those struggling Chicagoans and he thinks that instead of helping these people by actually lowering their taxes, he is telling the Governor that any increase has to see a proportional drop in property taxes.

    So Daley isn’t proposing a tax decrease. He is just warning the Governor that whatever additional income tax generated from Chicago may end up coming out of the pockets of City Hall.

    Daley isn’t a hero here.


  16. - downstate hack - Tuesday, Mar 31, 09 @ 3:26 pm:

    Chicago schools need $200 milllion more!!!!! More and more money, lower and lower test scores.


  17. - Bobs yer - Tuesday, Mar 31, 09 @ 3:31 pm:

    Doc, et al, I know Daley is posturing on this, just like LM. But I’ll take what I can get. Pretty rare to hear a Dem talk about reducing any tax.

    The funniest part about Daley’s rant is his “we get nothing out of this” comment. Is he aware that Chicago is in the State of Illinois? Isn’t balancing the State’s budget important to everyone? He’s treating it like another opportunity to grab dough for….whatever he does with it. If I were Quinn, I’d start suggesting that Daley draw down on his ‘rainy day’ fund.


  18. - Ghost - Tuesday, Mar 31, 09 @ 3:32 pm:

    VM, Daley is really saying pay me my 10% of the increase to buy my support.


  19. - Esteban - Tuesday, Mar 31, 09 @ 3:45 pm:

    One of the justifications for raising tax on
    cigarettes are the public health benefits. I’m
    sure that the pols already know how they are going
    to spend the money but how will they replace the
    revenue if taxation drives consumption down to
    zero, which is that stated goal.


  20. - steve schnorf - Tuesday, Mar 31, 09 @ 3:57 pm:

    I’m not sure I would call $54M “not getting anything”


  21. - Bruno Behrend - Tuesday, Mar 31, 09 @ 4:10 pm:

    There is only one honest tax swap.

    Everything else on the table is a shell game designed to create the pretense of a swap, that might (if we are lucky) yield slightly lower property tax growth for about 6 mos.


  22. - Bruno Behrend - Tuesday, Mar 31, 09 @ 4:11 pm:

    BTW, the Dems/Quinn are to be thanked for their intellectual honesty in passing a raw tax hike absent a dishonest swap.

    Bad policy to be sure, but at least it’s honest.


  23. - Bobs yer - Tuesday, Mar 31, 09 @ 4:43 pm:

    Esteban, I think the marginal reduction in cigarette purchases always has been offset by the increase in taxes.

    Smokers are always an easy target. They’re only about 20% of the adult population, not enough to vote anyone out of office. And smokers all feel too guilty about the habit to complain much (former smoker).


  24. - Fed Up - Tuesday, Mar 31, 09 @ 6:43 pm:

    What about renters? I help my landlord’s property taxes and he gets the tax write off. I get no deduction on my income taxes. No one ever seems to care about us. We vote too.


  25. - wordslinger - Tuesday, Mar 31, 09 @ 7:14 pm:

    Daley wants his “share” of the increase, and will use it to “lower” property taxes in the city by at least that much so he’ll be a hero.

    He’s sitting on a pretty nice “rainy day” fund from his asset selloffs to handle his budget problems.


  26. - hatedumbdumbs - Tuesday, Mar 31, 09 @ 7:54 pm:

    Fed Up,
    If you are paying your rent on time your landlord is paying taxes on that income. He can only deduct expenses on repair NOT the time and effort it takes to get keep the property in order. You get NO tax break you don’t deserve one.


  27. - Sweet Polly Purebred - Tuesday, Mar 31, 09 @ 8:50 pm:

    As a occassional smoker, I guess I know what I’ll be growin’ in my garden this year. Time to research tobacco cultivation and curing. Cheaper and easier than driving to Missouri once in a while for my tobacco fix. I guess I should seriously think about investing in the medical marijuana trend. Being a weeder has to be cheaper than being a cig smoker.


  28. - Bruno Behrend - Wednesday, Apr 1, 09 @ 12:55 am:

    Polly,

    No need to grow it. Back when my sister used to smoke, she would by papers and tobacco and roll her own. If I’m not mistaken, you don’t pay the obscene tax on the bagged tobacco, but then, I don’t smoke, so I don’t know for sure.

    Of course, now that all the legislators reading this site know that, look for the tax increase to be in the upcoming bill…

    DOH!


  29. - Lynn S - Wednesday, Apr 1, 09 @ 10:59 pm:

    Rich, I have submitted a response (admittedly, rather flippant) to this thread 3 times over the last 2 days, but it hasn’t appeared yet. Am I being held for moderation? Kindly requesting a response (the above e-mail is good). Thanks in advance, Lynn S.


  30. - Lynn S - Thursday, Apr 2, 09 @ 11:14 pm:

    No, Polly, it’s still cheaper to buy tobacco than marijuana. The real question, however: is it cheaper to grow and cure your own tobacco than it is to grow marijuana? (Growing methods would have to be similar; i.e., both in ground or both hydroponic.)

    arching an eyebrow, stepping back….

    And Bruno, loose tobacco tax also raised this time. Don’t know if they changed the tax rate on rolling papers, though.


Sorry, comments for this post are now closed.


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