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.


* Another Quinn punt results in lawsuit
* Question of the day
* Truax forms PAC as Kirk shifts left
* Report: Illinois has five donors in nation's top 50
* *** LIVE *** Session coverage
* New York's problem is likely prohibited here
* Everything old is new again
* Rauner continues hammering away at state worker pay, benefits
* Why We Need A Strong Civil Justice System - Molly’s Story: Doctors Unnecessarily Removed Her Breast
* SUBSCRIBERS ONLY - Supplement to today’s edition
* 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

          
        * Meizu unveils Meilan m1, new m1 Note variant, LifeKit platform
        * Apple Watch date, HTC One M9 leaked, Moto deals & more – Pocketnow Daily
        * JotterPad 11 is a writer’s delight, save work in multiple formats
        * How Facebook is using autoplaying videos and ad tech to make billions
        * Device automation made easy with Droid Automation, MacroDroid
        * Will HTC release a Firefox OS smartphone?
        * Enter to win a pair of Studio Beats and a OnePlus One Android handset

        * Huawei Mate7 Compact Images Leaked Out Again
        * Pre-Order Your Next Batch Of Amiibo Figures Now!
        * Is It Possible To Beat Tetris? Apparently So!
        * WesterosCraft Is A Place Of Beauty
        * Apple and Samsung Are Now in A Dead Heat for Smartphone Dominance
        * Star Wars: The Force Awakens Trailer In Neon
        * Facebook Sees Surge In Quarterly Profit

        * The unlikely return of Gordon Beckham's unfortunate offseason tradi...
        * Viciedo designated for assignment to open roster spot
        * White Sox reunite with Beckham on one-year deal
        * White Sox reunite with Beckham on one-year deal
        * White Sox sign Gordon Beckham; designate Dayan Viciedo for assignment
        * White Sox reunite with Beckham on one-year deal
        * Prospect Watch: Top 10 shortstops

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


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

        Archives
        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’ New Republican Governor Just Declared.....
        * Unit 5 examines 2 potential budget scenarios..
        * Rauner takes aim at unions in Decatur stop..
        * Rauner proposes 'right to work zones,' local un.....
        * Letter: Don't reduce state funding of Human Ser.....
        * This pillar of the state's economy is still sur.....
        * Kentucky may be model for Rauner union push..
        * Everything old is new again..
        * Rauner among nation's top donors in 2014 elections..


        * Trial opens for 2 accused of desecrating Illinois cemetery
        * Report: Illinois marijuana market could reach $36M in 2016
        * Gov. Rauner among nation's top donors in 2014 elections
        * Brothers accused of digging up graves, dumping remains
        * Police reform bills spurred by recent deaths, racial unrest
        * Judge upholds 122-year prison sentence in Romeoville slaying
        * Chicago Cubs' Ernie Banks statue moved downtown for tribute
        * Northern Illinois facility for juvenile wards closes
        * House committee passes ban on plastic beads polluting lakes
        * Chicago mayor places wreath Cubs great Ernie Banks' statue

        * Rauner among nation's top donors in 2014 elections
        * Lawmaker proposes bill to ban convicted terrorists from teaching
        * Police reform bills spurred by recent deaths, racial unrest
        * State's tax revenue from video gambling more than doubles
        * Report: Illinois marijuana market could reach $36M in 2016
        * Rauner: 'Right to work zones' are first-year priority
        * Rauner previews 'right to work zones' as first-year priority
        * Judge grants extension in Illinois prison crowding case
        * State lawmaker introduces bill to cut officeholders' pay
        * Proposed Logan County medical marijuana growing site gets high score

        * McDonald's CEO Don Thompson is out
        * Illinois drops in U.S. wind power ranks
        * McDonald's inks lease for new digital digs in River North
        * Illinois marijuana market could reach $36 million in 2016
        * Chicago Tribune names No. 2 editor


          * Critics boo as College of DuPage board reaffirms president's buyout
          * Judge fines, sanctions longtime Harvey comptroller
          * Man dies 2 days after Little Village shooting
          * Trial begins for man accused of killing father at Westmont hotel
          * Sacred Heart turned patient trust in doctors 'upside down,' lawyer says
          * Woman who rescued wayward bus haunted by experience
          * Man who worked with Big Brothers group charged with child porn: police
          * Trial of brothers starts in Burr Oak Cemetery scandal
          * Harvard man guilty of sex assault of girl, 9
          * Bernie Mac's widow withdraws wrongful death lawsuit


          * Rauner High On List of "Sugar Daddies Of State Politics"
          * Graying Illinois
          * Let's Talk Kids - "Reading To Babies"
          * House Rules Break Bipartisanship
          * "This I Believe" Essay Contest Deadline Is Jan. 29
          * Cervical Cancer Awareness
          * What's Up With Chatham's Water?
          * New Chair Sworn In At ISBE
          * Rauner Raises Unions' Ire With Plan For Right-To-Work Zones
          * Rauner Raises Unions' Ire With Right-To-Work Plan


          * Rauner among nation's top donors in 2014 elections
          * Lawmaker proposes bill to ban convicted terrorists from teaching
          * Police reform bills spurred by recent deaths, racial unrest
          * State's tax revenue from video gambling more than doubles
          * Report: Illinois marijuana market could reach $36M in 2016
          * Tom Skelly: Chatham residents deserve straight answers
          * Michael Gerson: Republicans in the immigration minefield
          * Quote of the Day: Wednesday, Jan. 28, 2015
          * Rauner: 'Right to work zones' are first-year priority
          * Judge grants extension in Illinois prison crowding case


          * Eye on Illinois: medical marijuana
          * Area statistics: Boys' basketball (Jan. 29)
          * SIUE professor on paid leave after on-campus DUI arrest
          * Girls' basketball regionals offer plenty of excitement
          * WBB preview: Visiting the ’Huskers
          * UI baseball has sights set on Series run
          * Salukis lead No. 18 Northern Iowa 26-23 at the half
          * Northern Iowa beats SIU 59-52
          * Clinton nuclear plant back to full power
          * Man robs bank in Edwardsville shopping complex


          * Constable: Could anything dim Banks' bright smile?
          * Images: Dundee-Crown vs. Jacobs, boys basketball
          * Pope a no-show in Green Bay
          * Irving scores 55, leads Cavs to 8th win in row minus LeBron
          * Jordan offers swap inmate to save pilot

          * US Reps. Rush and Barton Reintroduce DATA ...
          * Lemont HS Student Among Rep. Lipinski's Pi...
          * Rep. Lipinski Announces Service Academy No...
          * Rep. Lipinski Recognizes and Celebrates Na...
          * Kinzinger, Lipinski Offer State of Union A...
          * Chicago March for Life doubles attendance ...
          * Archbishop Blase Cupich, Congressmen Dan L...
          * Archbishop Cupich joins hundreds at March ...
          * Rep. Lipinski Helps Pass Veterans' Suicide...
          * Lipinski: There's still a lot of work left...

          * Sullivan: Alaskans dream big, breathe air ......
          * Democrats Propose Legislation to Consolida......
          * GOP case against Loretta Lynch falls apart...

          * Carl P. Leubsdorf: Netanyahu invite is bal......
          * Kirk-Menendez re-introduce bill for Iran s......
          * Truax forms PAC as Kirk shifts left...

          * Democracy For America To Support 7 Progressive Chicago Aldermen
          * Online Voter Registration For February Elections Ends Today
          * Emanuel's Campaign War Chest Grows By $800,000 In Single Week
          * Study: Top 1 Percent Of Earners In Illinois Captured 97% Of Post-Recession Income Gains
          * Roskam and Ryan Introduce Bill to Stop Political Targeting by IRS
          * EXCLUSIVE: COD Trustee Board Vice-Chair Kathy Hamilton urges colleagues to reject Breuder contract
          * McSweeney Introduces Legislation to Freeze Illinois Property Taxes
          * Chicago mayoral candidates challenging Emanuel want to remove red-light cameras
          * Illinois Tea Parties acclaimed for electing Bruce Rauner governor
          * CTU, Allied Groups Call For Quazzo's Resignation From Chicago Education Board (VIDEO)


          * Governor announces latest round of agency appointments
          * Rauner announces “Turnaround Team” - Stellar team to help turn Illinois around
          * Commerce Department to Review Proposals for Enterprise Zones - Program Promotes Job Growth in Communities Across the State
          * Governor Rauner signs Executive Order for Minority and Veteran Empowerment
          * Governor Rauner Announces Second Round of Appointments




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