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Afternoon updates - 35 HDem votes for Senate tax plan - Will call Quinn plan instead

Sunday, May 31, 2009

* 3:50 pm - Democratic Rep. Jack Franks just emerged from an ongoing House caucus meeting and said he’d be surprised that the Senate-approved income/sales tax increase would have 30 votes among House Democrats.

Franks also said he didn’t believe the tax proposal would even be called for a vote. That’s just one person’s view, mind you, but there you go.

* 3:56 pm - Here is Rep. Franks on taxes and the budget…


* 4:11 pm - Aother HDem just confirmed most of Rep Franks’ assessment of the fate if the tax bill.

* Another HDem emerge to confirm. She derided the service tax idea. “They want to tax diapers?”. Diaper services would be hit with the tax.

* 4:30 pm - 3 more HDems emerge to chronicle the disaster. One more reference to the “diaper tax.”.

* 4:41 pm - HDem caucus vote: 35 for Senate plan.

* 4:40 - Majority Leader Currie just told reporters that the Quinn tax hike plan will be called instead. That plan is unpopular in the Senate. Whiplash time.

* 4:57 pm - Leader Currie told me that it was still “possible” that the Senate plan could be called in the House today. But she didn’t define the parameters.

* 5:09 pm - Rep. Miller on what happened and what’s next…


* 5:11 pm - The Tribune has posted an online editorial blasting plans for “An irresponsible tax hike”…

It looks like members of the Illinois House are going to vote late this afternoon or tonight on a big increase in the Illinois income tax. They could be asked to vote twice: if a 67 percent increase in the tax fails, leaders may call a vote on a mere 50 percent increase.

Democratic leaders are pushing tax hikes in the midst of an economic recession, even though they’ve made no substantive progress on curbing the runaway costs — particularly in pensions and health care — that have put the state in this terrible position.

That’s irresponsible.

It would be nice if they’d at least concede the fact that normal state revenues have dropped about $3 billion in this fiscal year alone.

- Posted by Rich Miller        


27 Comments
  1. - State Employee - Sunday, May 31, 09 @ 4:11 pm:

    I don’t know what state Franks is talking about when he says that there haven’t been cutbacks, such as furloughs, travel restrictions, layoffs etc. This state employee has seen all of those things.


  2. - Lemme tellya what i really think. - Sunday, May 31, 09 @ 4:12 pm:

    Franks is duplicitous. I can’t even keep up with all the double-speak and circular logic.

    Talking about opposing 174 to protect the unemployed, when people like that would get a TRIPLED earned-income tax credit a DOUBLED property tax credit.

    Says state spending needs to be cut when we already have the 49th largest state share of education funding, fewest state employees in the country per resident, months-long medicaid billing backlog and nation’s worst pension debt.

    Says he’s worried about the unemployed in one breath, then says he wants to see layoffs in the next breath! What the hell do you call somebody who’s laid off but UNEMPLOYED?!

    Spin spin spin Franks. I’m so dizzy I’m puking.


  3. - Lemme tellya what i really think. - Sunday, May 31, 09 @ 4:24 pm:

    “She derided the service tax idea. ‘They want to tax diapers?’. Diaper services would be hit with the tax.”

    That HDem is not very smart. Regular people who BUY diapers already pay sales tax on them! Under the bill, wealthy people who HIRE a diaper SERVICE would not be able to evade that same tax!

    For crying out loud!


  4. - Cassandra - Sunday, May 31, 09 @ 4:25 pm:

    A $600 increase for a family of 4 with a $50k income is quite a hit, though. These families are barely hanging on but they aren’t eligible for food stamps and other government programs. And of course they will get hit by many of the proposed service taxes…you just can’t avoid some of them no matter how frugal you are.

    I’m surprised the Dems and Quinn aren’t fighting harder for this lowe to-middle income group, Maybe they aren’t vocal enough (too busy working) but they are the most vulnerable to economic disaster–job loss, illness, and so on.


  5. - FED up - Sunday, May 31, 09 @ 4:32 pm:

    Hell no on the tax increase. Start cutting. Cut LT. Gov office, Combine Treasurer and comptroller into one state doesnt need both, eliminate the whole layer of goverment that is townships, dump all the patronage panels and boards, Pension reform especially for elected and appointed officials. No this doesnt get us there but a small increase might be tolerable if real cuts and reform were made. But Madigan and cullerton arent interested in real reform just increasing their power.


  6. - Lemme tellya what i really think. - Sunday, May 31, 09 @ 4:32 pm:

    “A $600 increase for a family of 4 with a $50k income is quite a hit, though.”

    If that family owns a home, they get a lot of it back in the DOUBLED property tax credit. For example you’d get $300 back on a 6k prop tax bill and $400 back on an 8k prop tax bill. That leaves your hypothetical family paying 2 or 300 more, or about 5 bucks a week. Come on.

    Not to mention you can WRITE OFF your state taxes on your federal return, so you really get every penny back.

    Seriously, let’s think a minute people.


  7. - Princess - Sunday, May 31, 09 @ 4:33 pm:

    Cassandra, you’re so funny. You spend lots of time posting about over paid, luxury pension blah blah state workers here all along. Did you not realize that a very large amount of them work for the wages (around $50,000) you are now giving pity to?


  8. - SouthernGirl - Sunday, May 31, 09 @ 4:34 pm:

    Well if they can’t stand the heat of fully funding the state budget, wait for the outrage that will come with all the cuts that will be coming. When John Q. Public goes to get his driver’s license renewed, and finds his local driver’s facility closed. Or when his child goes to school and the class size has swelled to 50. What a great trade off. But politics rarely has anything to do with logic.


  9. - Bill - Sunday, May 31, 09 @ 4:37 pm:

    Franks will vote however Madigan tells him to vote; just like he always does.


  10. - at it igan - Sunday, May 31, 09 @ 4:45 pm:

    Rep Franks said it all. Politics is the reason state government must limp along till primary season. Who needs transparency? This is all very transparent.


  11. - Cassandra - Sunday, May 31, 09 @ 4:46 pm:

    Pensions are a luxury in the greater world these days. And they are disappearing. And a family of
    four making %50k is unlikely to have much left over to save for retirement.

    My point here is that it wouldn’t be that difficult to make this income tax increase(if we have to have it) more progressive and pick up the revenues elsewhere…through a higher corporate tax for example combined with higher exemptions for the middle class. The Democrats say they want to help the poor but in doing so they seem to wish to lay the heaviest burden on the next rung up—the lower middle class. You have to wonder about their motives.


  12. - Anon - Sunday, May 31, 09 @ 4:47 pm:

    Lemme tellya what i really think,

    Your assumptions make no sense at all. You are talking about a $6 to 8k property tax bill for a family making $50k/year. That is the equivalent to a $300 to 400k house. That family has more problems than worrying about an income tax increase. And you can only write off your state income taxes if you itemize. Many do not. And a write off of state income taxes is not a dollar for dollar decrease in your federal taxes rather it is simply a reduction of your federal taxable income. Meaning that family making $50k/year would most likely be in the 15% tax bracket and would only get a benefit of 15 cents on the dollar if they itemize.


  13. - Big West - Sunday, May 31, 09 @ 4:48 pm:

    Okay FEDup, you’ve cut maybe $200 million. How do you find the other $6.8 billion? Seriously, I cannot believe it end up being the House that kills the revenue bill. Way to brave it guys.


  14. - get me out of here - Sunday, May 31, 09 @ 4:51 pm:

    Yet again, truly profiles in courage. And what happens if Quinn vetos their budget, punt again?


  15. - Reform Illinois Now - Sunday, May 31, 09 @ 4:59 pm:

    We need to cut services rather than expanding them-let’s start with the program that B’s expanded- early childhood education, transit for seniors, etc- It is time to realize we can not afford the government state that we are building- let’s forgot the tax increases and cut services instead- we are already pay high property and sales taxes- this increase would hurt our economy too much-it is time for state lawmakers to realize this rather than increasing taxes and services


  16. - Princess - Sunday, May 31, 09 @ 5:01 pm:

    but Cassandra that family out there who you say has no money to save for retirement is different than how from the worker now making mandatory pension contributions out of the same amount of money earned? Luxury? Average pension for state worker is like 18,000 a year. Average worker retirees well into their 60’s. Average life span is like 77. So really considering one’s paid their mandated contribution for 30 to 40 years and gets a 10 to 12 year pension back, I’d hardly call it living high or long on their investment. Again I ask, what’s the difference between the private sector family making 50,000 who you say can’t ’save’ for retirement and a state worker who has no choice but contribute to a fund on the same salary? Your skipping around on an answer.


  17. - Big West - Sunday, May 31, 09 @ 5:01 pm:

    Wow, so much here. Cassandra, maybe instead of eliminating pensions as a luxury, maybe we should start finding a means to expand pensions. Anon, not everyone who pays high property taxes bought their house for 400k. A house as an asset is only a benefit when it’s sold. Finally , Get me, as a friend of mine is fond of saying, “Why vote for Democrats if they won’t raise taxes?”


  18. - FED up - Sunday, May 31, 09 @ 5:02 pm:

    - Big West - Sunday, May 31, 09 @ 4:48 pm:

    Okay FEDup, you’ve cut maybe $200 million. How do you find the other $6.8 billion? Seriously, I cannot believe it end up being the House that kills the revenue bill. Way to brave it guys

    Just like I stated before you spend the money you have not the money you dont. If I know I am going to make 100k this year I dont spend 400k. THE BIGGER PROBLEM IS HOW DO YOU GET 7 BILLION MORE IN SPENDING THEN REVENUE. This is years of bad goverment. Thank you Madigan, Blago, E. JONES, Cullerton. Make do with what you can afford.


  19. - another cliff hanger - Sunday, May 31, 09 @ 5:08 pm:

    anybody have the bill number on capital spending?


  20. - charles in charge - Sunday, May 31, 09 @ 5:18 pm:

    Dear FED up,

    The Comptroller and Treasurer are CONSTITUTIONAL offices. Combining them into one would require a Constitutional amendment. The Gov’s office has no authority whatsoever to do that.

    It’s pretty easy to spout off when you haven’t even bothered to inform yourself of the most basic relevant facts, isn’t it?


  21. - FED up - Sunday, May 31, 09 @ 5:18 pm:

    It would be nice if they’d at least concede the fact that normal state revenues have dropped about $3 billion in this fiscal year alone.

    Rich it would be nice if Madigan and Cullerton stood up and gave a news conferance stating reform is of no interest to them, because they enjoy all the power but they won’t. It would be nice if the state leaders learned to not pass programs with no plan of paying for them but they wont. It would be nice if everyone got the pensions that are elected and appointed leaders get for part time jobs or pension bumps for only doing a job 2 months but there is no chance of that either.


  22. - Louis G. Atsaves - Sunday, May 31, 09 @ 5:27 pm:

    And while revenues this fiscal year have dropped $3 billion, the Governor, Senate President and Speaker of the House have done what?


  23. - Anon - Sunday, May 31, 09 @ 5:29 pm:

    An example…

    An employer decides he wants to hire a new employee and has $50K budgeted for a new hire. First, he cannot offer the full $50K to the employee because he also has to pay employer-level social security, employer-level medicare and federal and state unemployment on top the money allocated for salary. Therefore, he can only offer the employee a starting salary of $46K…

    Company Cash Flow

    Salary = $46,000
    Social Security (6.2%) = $2,800
    Medicare (1.45%) = $700
    Unemployment (varies) = $500
    Total = $50,000

    So the employee has to start out for approximately 8 percent less than what the employer budgets because of these employer-level taxes. Now the employee will also have to subtract employee-level taxes like Federal and State withholding and employee-level social security and medicare from their salary of $46K…

    Employee Salary

    Salary = $46,000
    Federal W/H (~15%) = $6,900
    Social Security (6.2%) = $2,800
    Medicare (1.45%) = $700
    State W/H (~5%) = $2,300
    Take Home = $33,300

    So now we are down approximately 33 percent from our original $50K after making sure every level of government got their piece. But wait, we aren’t done yet. Let’s assume this person spends $30,000 of their take home pay on goods or services that the government will impose an 8 percent sales tax on. We will assume 8 percent since it is going to be the going rate in Springfield. Subtract another $2,400 from your take home pay. Down to $30,900.

    I understand that some items, like groceries that are taxed at lower rates, however, other items like gas are taxed at much higher rates. Plus, who can even count the multitude of taxes and fees on everything from your phone bill to your cable bill.

    But wait, we forgot about federal and state corporate taxes that are passed on to the consumer through higher prices. You didn’t think the corporations would just absorb that did you? For our example we will assume an average corporate profit of 5 percent and a combined federal and state corporate rate of 40 percent. This means that approximately 2 percent of your $30K in purchases is a result of corporate level taxes passed on to the consumer. Subtract another $600. Down to $30,300.

    And oh yeah, this person also spent another $2K on property taxes on their $100K house. They do get their 10 percent or $200 credit so the net subtraction is only $1,800. Down to $28,500 or almost 43 percent lower than the initial $50K in this example. And this is fairly typical. There have been numerous studies done that say every one of us pays somewhere between 40 and 50 percent of our earnings due to some level of government taxation.

    Are we done yet?!?! Well, not if this person decided to save any of their money. They would be taxed on that as well. And if they saved enough throughout their life, they are subject to a tax on their estate that is almost 50 percent.


  24. - DuPage Dave - Sunday, May 31, 09 @ 6:00 pm:

    Fed Up should take a look at the real numbers. Losing the Lt. Gov post and combining the 2 fiscal jobs would save peanuts. As Rich says, we lost THREE BILLION DOLLARS in revenue this year.

    And Cassandra- please take a day off once in a while!!


  25. - wordslinger - Sunday, May 31, 09 @ 7:09 pm:

    Anon, I’m curious as to why your analysis of employee budgeting doesn’t include employer-based health care.

    That’s the cost that’s killing small business. And it’s a runaway train. State income taxes are bupkus compared to that.


  26. - FED up - Sunday, May 31, 09 @ 8:24 pm:

    an easy work around is leave the office vacant and eliminate its budget or whoever wins the office has a budget of $1. there you have your office. Wasteful overlap and those who fight tooth and nail to save it need more and more tax money every year stop funding waste.


  27. - PalosParkBob - Sunday, May 31, 09 @ 8:53 pm:

    DuPage Dave, you’re right. We can’t just look at the “Peanuts” cuts. We need to redesign the “structure” to eliminate the “structural deficit” without a tax increase.

    Here’s how:

    Repeal “prevailing wage” overpayment on construction
    $1.5-$2 billion

    Roll back Medicaid eligibility from 400% of poverty level to 185%
    $2.2-$2.5 billion

    Converting Medicaid to managed care for remaining recipients
    $2-$2.2 billion

    Ending “end of career” pension inflators
    $0.3-$0.5 billion

    Savings in capital program from repealing prevailing wage
    $5 billion over 4 years ($1.25 billion per year)

    Total savings- $7.25 to $8.65 billion per year.

    “Down side”?
    Contractors and construction unions won’t have as much cash from protectionism and inflated wages and prices, so they won’t have as much money to bribe….er…contribute to political campaigns.

    Large, private managed care providers won’t be as understanding as the current many health care providers the state is stiffing because of irresponsible budgeting. The legislators will need to make paying Medicaid a priority.

    Only the truly needy will receive subsidized health care, decreasing the “dependency base” of the Dem party.

    No furloughs. No layoffs of police, firepersons or vital state personnel. No denial of health care to the impoverished. A conversion from emergency care to preventive care.

    Boy I can see why the legislature and governot doesn’t want to go down this painless path!

    By the way, why don’t we make these changes and give a tax cut?


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