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.


* Reader comments closed for the weekend
* *** UPDATED *** THIS JUST IN... Judge orders permanent stay on pension law
* Today's number: 10 percent
* Unclear on the concept
* Could be a big day
* Question of the day
* Illinois leaders react to Obama's immigration order
* TrackBill – An Introduction
* Caption contest!
* 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

          
        * Which app payment system is right?
        * Our 5 favorite new Windows Phone apps of the week
        * Jolla’s Open Source iPad Alternative Raises More Than $1M In Two Days’ Crowdfunding
        * Apple Watch price, Lollipop updates, MS Office mobile comments & more – Pocketnow Daily Recap
        * Google’s Nexus 6 Might Be Too Big For Right Now, But Right-Sized For The Future
        * You Should Play: Monster Strike is a delightful mashup of monster battles and pinball
        * HTC Desire Eye Review: Welcome to the (selfie) machine

        * Samsung Asks ITC To Block NVIDIA’s Products From The US Market
        * OS X 10.10 Safari Users Complaining Of YouTube Incompatibility
        * Square’s Apple Pay Support Registers Arriving In 2015
        * Skipping COBRA for Health Insurance Can Save You Money, But Not Always
        * Here Are Your Once-A-Year Sonos Discounts
        * Check Out the Best From This Week's Open Thread
        * The mis-measure of Netflix

        * Terrerobytes: Waiting for Adam LaRoche
        * With LaRoche on board, Abreu will benefit
        * Sources: White Sox land LaRoche with two-year deal
        * Sources: White Sox land LaRoche with two-year deal
        * Sources: White Sox land LaRoche with two-year deal
        * Abreu will benefit from LaRoche's presence
        * White Sox sign Adam LaRoche to two-year, $25 million deal

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


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

        Archives
        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


        * Governor-elect Rauner, Pastor Brooks hand out T.....
        * Rauner tackles full transition agenda..
        * Rahm Emanuel's silent partner in mayoral campai.....


        * Judge denies bid to halt Illinois fracking rules
        * Some 30 horses die in stable fire outside Chicago
        * Vatican prosecutor didn't report abusive priest
        * Illinoisan among winners of Rhodes scholarships
        * Woman accused of attack using nail-studded board
        * Church members each get $500 to do good for world
        * Man dies after being shot during Missouri hunt
        * Illinois' Rauner tackles full transition agenda
        * Immigrants urged to take advantage of Obama action
        * Door County fish business subject of federal probe

        * Rauner tackles transition agenda
        * Attorney general warns of immigration scams
        * State pension changes ruled unconstitutional; appeal to Illinois Supreme Court next
        * State to refund $60 million in retiree health care money
        * State pension changes ruled unconstitutional; appeal to Illinois Supreme Court likely
        * Illinois pension case likely headed to high court
        * Judge: Pension ruling to come Friday
        * Rauner mum on fixes for ‘dire’ state finances, wants Quinn to freeze hiring
        * Rauner mum on fixes for ‘dire’ state finances
        * Judge to hear pension law arguments today

        * AndroGel giving AbbVie performance anxiety
        * Turning the kitchen into a tech hot spot
        * What does Michael Madigan do next?
        * Are Chicago's manufacturing districts vulnerable?
        * United's Smisek back in analysts' good graces


        * Rauner, Brooks hand out turkeys and trimmings
        * Garcia says he has 60,000 signatures for mayoral run
        * Our ancestors, all immigrants, are watching us now
        * Is there a way for GOP to defuse immigration issue?
        * Coalition pushing advisory vote for elected CPS board
        * Obama dismisses GOP criticism on immigration
        * Gov. Quinn could collect healthy pension on way out the door
        * 'SNL,' 'Schoolhouse Rock,' a bill and an executive order
        * Faces of minimum wage: Business owners paint post-layoff path
        * Obama says Americans want 'new car smell' in 2016


        * Cupich apologizes to West Side church for sex abuse
        * Man dies after falling from Near North Side hotel
        * Rhodes Scholars include 6 from Great Lakes area
        * Man shot multiple times on Far South Side
        * Chicago-bound Amtrak train strikes pedestrian
        * Magnificent Mile Lights Festival: 'Nice to start the holiday season'
        * McHenry County blaze kills 32 horses: 'I don't know what to do'
        * Man critically hurt in Little Village shooting
        * Police warn of robberies in Lake View neighborhood
        * 5 injured in shootings, including 2 teens, on South, West side


        * Listen to State Week - November 21, 2014
        * State To Refund Retiree Health Care Money
        * Labor unions celebrate judge's ruling against Illinois pension law
        * Judge Finds Reductions In Pension Benefits Unconstitutional
        * Pension Ruling Imminent
        * Hoosiers divided over Obama’s executive action on immigration
        * Illinois Symphony Orchestra Joins The Circus For Holiday Pops
        * School Funding Testimony Taken At Capitol
        * Incoming U of I President Speaks To Springfield Audience
        * To Restore Executive Mansion, Rauner Plans Private Funds


        * Our Opinion: Illiana project too risky for tapped-out Illinois
        * Bernard Schoenburg: Sen. Manar backs aide Watson over Cahnman, Proctor in Ward 5
        * Karen Cox: Shop for a cause
        * Andy Shaw: Protect Illinois’ FOIA law from unnecessary tinkering
        * Quote of the Day: Sunday, Nov. 23, 2014
        * Rauner tackles transition agenda
        * Attorney general warns of immigration scams
        * Deckle McLean: Plagiarism comes with a price
        * Charles Krauthammer: The climate pact swindle
        * Quote of the Day: Nov. 22, 2014


        * Some 30 horses die in stable fire outside Chicago
        * PHOTOS: Local pool players get tips from Team USA
        * Snow expected Monday and Wednesday, holiday will be dry
        * LIVE! Southern
        * Small plane makes emergency landing near O’Fallon
        * Rural Long Grove man killed in accident
        * Davenport police ID shooting victim
        * Meeting set to discuss Bloomington street changes
        * Saluki men 20 minutes from second win of season
        * Saluki men beat Illinois-Chicago 67-60 for second win


        * Second-half comeback rescues Bears, 21-13
        * Islamic State group recruits, exploits children
        * Images: Bears vs. Buccaneers
        * More than 30 horses reported dead in Crystal Lake-area barn fire
        * Former D.C. Mayor Marion Barry dies at 78

        * Lipinski: New Mixture in Washington May Ge...
        * Lipinski Hoping for Restraint after Israel...
        * Lipinski Welcomes Archbishop Cupich, Thank...
        * Next Generation Supercomputing Technologie...
        * Rep. Lipinski Accepting Service Academy Ap...
        * Brannigan cuts into Lipinski landslide ter...
        * Lipinski rolls to victory and a sixth term...
        * Dan Lipinski re-elected to U.S. House - Th...
        * Rep. Lipinski wins re-election in US Third...
        * Rep. Lipinski Receives Leadership Award fo...

        * Sunday TV news show guests listed...
        * Durbin, Corker Introduce Water for The Wor......

        * Algonquin chief recommended to be next U.S......

        * Somos todos Ayotzinapa. Chicago.
        * The Better Government Association continues to spread the lie about public employee pensions.
        * Marion Barry has passed away
        * Sherman’s Maps
        * An Encounter Along Sherman’s March
        * Rethinking Sherman’s March
        * The Civil War’s Environmental Impact
        * Who Burned Atlanta?
        * The Burning of Atlanta
        * How Lincoln Won the Soldier Vote


        * Illinois Residents Asked to Put the Tobacco Down - Support the Great American Smokeout – November 20
        * Governor Quinn Statement on President Obama’s Executive Action
        * Governor Quinn Statement on Selection of New University of Illinois President
        * Governor Quinn Statement on Senate Committee Passage of Minimum Wage Legislation
        * Governor Quinn Statement on the Installation of Archbishop Blase Cupich




            Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller