SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Tribune catches up on tax/bond story - Plus, an Illinois TABOR?

Tuesday, Dec 28, 2010

* I told subscribers about this general idea a week or so ago. But I don’t think that the one-year plan being reported today in the Trib is actually what’s going on

As the state’s stack of unpaid bills grows, Gov. Pat Quinn is floating the idea of borrowing roughly $15 billion to alleviate the pressure, though taxpayers would be saddled with loan payments for years.

The governor has approached several lawmakers with a plan he’s dubbed a “debt bond.” While the name is somewhat redundant, the thinking is the state can pay back what it owes and plug its big budget hole — if only for a year.

A one-year “solution” would be a genuinely stupid move if true. So I really don’t think it is true.

The state has to solve two problems here. The first is the structural deficit, which is about half of the $13-15 billion in red ink. For that, you need recurring revenues. A one-off loan won’t do anything about those recurring problems. The second task is the pile of past due bills, which is roughly about another half. That’s the part which can be taken care of with a bond. If you just borrowed $15 billion and didn’t raise revenues above and beyond the debt payments to wipe out the structural deficit (or use cuts in tandem to eliminate it), you’d be right back to square one in a year. Like I said, it would be stupid. And that’s why I don’t think this is a one-off plan. They may borrow $15 billion (last week, it was more like $9 billion, but things do change), but they also need to get rid of this structural deficit to prevent more past-due bills from piling up again.

Paying for any plan will require a tax hike…

The most conventional source of money to repay the loan — an income tax increase — is also the most controversial. House Speaker Michael Madigan has been polling his Democrats on a variety of tax-hike options to gauge which might have a chance of passing. The scenarios include theoretical tax increases that would be billed as temporary or permanent and range from 1 to 2 percentage points.

As subscribers know, Madigan recently moved in the direction of one of those tax hike plans. But, as I always warn, things do change, and nothing is final yet…

Publicly, Quinn is sticking by his proposed 1-percentage-point income tax increase, which he has dubbed a “surcharge for education.” Privately, the governor has discussed with lawmakers dividing the money generated from a tax increase between schools and the state’s general revenue fund. […]

For his part, Quinn said he continues to work on creating a “comprehensive revenue package.” Quinn supports raising taxes on cigarettes by up to $1 a pack and has indicated to some legislators that he could be coming around the idea of raising the gasoline tax — a move he previously has opposed.

* Meanwhile, my syndicated newspaper column looks at some of the changes ahead

Organized labor is engaged in a furious multifront legislative war in Illinois, and more skirmishes may be on the horizon.

Trade and industrial unions are hoping to mitigate major damage from proposed workers compensation reforms. Teacher unions are trying to fend off what they consider to be some egregious education reforms. And public employee unions are warily eyeing a potential new battle against a well-known foe that their counterparts in other states have had to face in the recent past. Looking at the battlefield right now, you’d probably never know that Illinois Democrats held onto power in last month’s elections.

The House appears to be taking the more radically conservative approach, but the Democratic Senate president is determined to pass some form of workers compensation reform before the current General Assembly wraps up business in early January. The same unions that pumped hundreds of thousands of dollars into Senate campaigns are now fighting the very people they helped re-elect just a few short weeks ago.

The teacher unions are preparing scorched earth tactics for the House’s education reform bill, which they say will all but take away their right to strike, severely limit their collective bargaining powers and impose new state standards for firing or laying off teachers.

The union focus lately has turned toward a proposed constitutional amendment in the House for a so-called “Taxpayers Bill of Rights,” or TABOR, as it’s more commonly known around the nation. The proposal was quietly introduced during the veto session by Rep. Keith Farnham (D-Elgin), who also is backing the education reforms.

The measure would limit state spending to the previous year’s levels plus the average percentage increase (or decrease) of per capita personal income over the previous five years. Any spending above that would require a declaration of a fiscal emergency by the governor and a three-fifths vote in both chambers of the General Assembly. Any “extra” money would be placed in a rainy day fund or given back to taxpayers.

While House Speaker Michael Madigan’s position is not officially known, the unions have convinced themselves that Madigan will push it next month when the lame duck session resumes. Colorado’s TABOR required voter approval before spending or taxes could rise and was twice watered down in referendum voting. Attempts at passing similar proposals have failed in other states. Illinois may be the only state where a TABOR has Democratic backing.

The assault on public employee unions and government spending is not confined to Illinois, of course. Several other states are considering legislation to undermine the unions. Wisconsin’s new Republican governor-elect wants to get rid of collective bargaining rights for public workers. And New York’s Democratic governor-elect, Andrew Cuomo, has demanded a wage freeze from state employee unions and hinted at major layoffs if he doesn’t get what he wants. Cuomo also wants pension reform, teacher wage cuts and a 2 percent local property tax cap.

The Illinois Senate has been far less receptive to the House’s education reforms and likely will not love the Taxpayers Bill of Rights if it arrives. But the unions point to the big majorities for pension givebacks this year in both chambers and the Senate’s push for business-backed workers compensation and Medicaid reforms, so they aren’t taking any chances.

Unlike New York, where Cuomo courted trade unions during the campaign and tended to ignore the public employee/teachers unions, Gov. Pat Quinn heavily courted all sectors of organized labor and received gigantic contributions from pretty much everybody. Quinn, the unions believe, could be the ultimate “stopper.”

But if these and potentially other reforms are used by legislative Democrats to pry loose Republican votes for a tax hike, Quinn may have no choice but to climb on board and bite the hands which fed him so well this year.

So far, the House Republicans appear to be a bit more receptive to Democratic outreach than they were even a few weeks ago. The odds are still stacked against it, but if the Democrats keep moving rightward, the Republicans might (emphasis on “might”) possibly release a few votes for a tax hike.

* Related…

* Chicago schools confront an uncertain future

* New 2011 laws affect politics, speeders, pet shops

* SURS change will affect only new hires

* Next phase of Wacker construction set to start

- Posted by Rich Miller        


No Comments

Be the first to comment.

Sorry, comments for this post are now closed.


* Moody's states the obvious
* Question of the day
* Setting the Record Straight: Getting Solar Right in Illinois
* Nuclear Energy: Keeping the Lights on for Illinois’ Businesses
* MALDEF prefers Franks remap reform over Independent Maps' proposal
* Open thread
* Lead, follow or get the heck out of the way
* Daley's tinfoil hat
* 30-day pause in Lucas lawsuit
* Brady amendment kills lite guv proposal
* *** LIVE *** Session Coverage
* SUBSCRIBERS ONLY - Update
* "Once it goes, it’s virtually impossible to rebuild"
* Graduated income tax backers predict bipartisan support
* More bad news for Exelon
* Civic Federation rips Rauner budget proposal
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

  
* [Deal] Amazon is selling the Nextbit Robin for $299
* Asia’s mobile-first economy and how the West is feeling the effects
* Sony’s latest audio equipment has Google Cast capabilities baked in
* Android distribution for May is in, Marshmallow accounts for over 7% of devices
* iMessage on Android? If Pie Message can get developers’ help
* iPhone 7 design changes, HTC smartwatch & more – Pocketnow Daily
* Patent approved for interchangeable Apple Pencil tips

* Quintana quiets Red Sox as Abreu stays hot
* Abreu's bat sizzling after early fizzle
* Rodon moves up as series continues with Red Sox
* Quintana quiets Red Sox as Abreu sets pace
* Quintana quiets Red Sox as Abreu stays hot
* Quintana quiets Red Sox as Abreu sets pace
* Quintana quiets Red Sox as Abreu sets pace

...............


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress

Loading


* Illinois panel votes against plan to close dete.....
* Rauner passes $600 million higher education fun.....
* Bipartisan panel votes against closing detentio.....
* Motorcycle Awareness Month in Illinois - OurQua.....


* Chicago social club reports breach of guests' personal data
* Belleville votes to dissolve overlapping township
* Dynegy to shut down 3 generating plants in southern Illinois
* SIU offers plan to boost campus diversity after protests
* UI student's medical records sought in infant death case
* Illinois panel votes against plan to close detention center
* College of DuPage appoints its first female president
* Illinois Democrats weighing higher taxes for the wealthy
* Illinois retail medical marijuana sales top $2M in April
* Rockford girl charged in connection with teen's death

* Legislative remap amendment proposal receives approval in Illinois House
* Caterpillar moving mining division offices to Arizona
* Legislative panel votes against plan to close Kewanee youth detention center
* Graduated income tax proposal delayed in House, expected to come up Wednesday
* Price, demand driving Illinois' hog farm expansion
* Medicaid policy may deny access to HIV medication
* Rauner: Graduated tax would be bad for the state
* Suit: Illinois law restricting child sex offenders too vague
* Medical marijuana panel meets to evaluate 15 new conditions
* National Wrestling Hall of Fame revokes Hastert's awards

* Ted Cruz quits race for Republican presidential nomination
* Lucas team appears to pull plug on museum
* Dynegy to shutter 30 percent of downstate power-generation capacity
* CPS students can access bathrooms by gender identity
* Illinois House overwhelmingly backs remap reform plan


* Man killed, 1 wounded in Pilsen shooting
* Woman grazed in Gresham shooting
* Man beaten, shot in Marquette Park
* Dear Abby: Abused as a child, boyfriend refuses help
* Georgia Nicols horoscopes for May 4, 2016
* Mayor wines and dines aldermen at ‘very social event’
* One wounded in Chatham shooting
* One shot in Chicago Lawn
* Woman shot in Greater Grand Crossing
* Baez’ ‘spectacular’ defense helps make moving parts work for Cubs


* Naperville teen faces felony charge after gun found at school
* Alleged NU chapel vandals indicted on a dozen hate crime charges
* Boy: Sister, stranger went into hills; she never came back
* Stealing food if you're in need is not a crime, Italian court finds
* The Philippine election could shake up rising tiger's economy
* Pushed from opposition, Turkey's Kurds threaten resistance
* Armenia to weigh breakaway region's recognition, raising tension
* Jose Quintana's arm and Jose Abreu's bat plenty in 4-1 White Sox victory
* Ted Cruz suspends campaign after Indiana loss
* Cubs' Jake Arrieta silences PNC crowd with arm, bat


* Legislative remap amendment proposal receives approval in Illinois House
* Our View: Bring some transparency to SHS coaching search
* Catherine Rampell: Hillary Clinton is a fiscal conservative — look it up
* E.J. Dionne Jr.: The irony of celebrity populism
* Michael Gerson: The state of disunion
* Pete Giangreco: Illinois should move ahead on automatic voter registration
* Caterpillar moving mining division offices to Arizona
* Legislative panel votes against plan to close Kewanee youth detention center
* Graduated income tax proposal delayed in House, expected to come up Wednesday
* Price, demand driving Illinois' hog farm expansion


* Trump virtually clinches nomination, Cruz drops out of race; Sanders narrowly defeats Clinton
* Tuesday's highlights: Dodd delivers late for B-H
* Romine will transfer to Illinois State
* UI roundup: Dingers push baseball past Mizzou
* Area sprinters confident with state aspirations
* Area prep statistics: Girls' soccer (May 4)
* No more guessing: Tennis will host tourney matches
* County board members get look at 10-year facilities plan
* Perry's first team rolling on despite distractions
* 2016 Twin City Boy's Track


* Girls soccer: Tuesday, May 3 scoreboard
* Softball: Tuesday, May 3 scoreboard
* Girls water polo: Tuesday, May 3 scoreboard
* Residents evacuated as fires threaten Canada oil sands town
* Mariners hit 3 home runs to power past the Athleti

* House lawmakers overcome hurdle on key tra...
* Rodney Davis talks funding with Bloomingto...
* The agency that fought Illiana gets a new ...
* Rep. Dold takes educational cruise down Ch...
* Lawmakers decry high turnover rate of VA h...
* CBD Oil, and politics
* Simon considering state Senate bid
* Killer Congressman Tom MacArthur trying to...
* Shutdown? State may not notice
* Rep. Bob Dold

* Sen. Dick Durbin speaks with students in s......

* Rep. Lang Calls On Sen. Kirk To Act - FOX ......

* “The Driver’s Side” – News From The Motorist’s Perspective
* Motorcycle Riding Governor Rauner Kick Starts ‘Start Seeing Motorcycles’ Campaign
* How about a stalk of corn or a soybean as the new Fighting Illini mascot?
* Woman, 71, Missing From Clarendon Park Area
* Decision 2016: Cruz is out...
* CPS To Allow Students, Adults To Use Restrooms Based On Gender Identity
* Sanders Upsets Clinton, Wins Indiana Primary
* Trump Wins Indiana GOP Primary
* Trump Wins Indiana GOP Primary (UPDATED)
* EXTRA: Cruz is gone from GOP election – Ding dong, the Witch is dead!


* Emergency Management Officials, National Weather Service Encourage Winter Preparedness - November is Winter Weather Preparedness Month in Illinois
* Keep Your Family Safe This Winter - November through February are leading months for carbon monoxide related incidents
* Governor Takes Bill Action
* Illinois Department of Labor Director Hugo Chaviano Awards Governor’s Award for Contributions in Health and Safety to the Illinois Refining Division of Marathon Petroleum Company LP
* State Regulator Elected Treasurer of Interstate Medical Licensure Compact




Hosted by MCS -- CapitolFax.com Privacy Policy -- SUBSCRIBE to Capitol Fax -- Advertise Here -- Mobile Version -- Contact Rich Miller