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*** UPDATED x1 - Schnorf knocks down story *** What they’re not telling you

Wednesday, Aug 31, 2011

* The Tribune has a new story about corporate sales tax havens

Kankakee Mayor Nina Epstein said Wednesday morning that she hopes the Regional Transportation Authority and the city of Chicago will drop their legal challenges to her city’s sales-tax incentive program, saying the public acrimony could kill what has been a golden goose for her city and for the state.

“I would certainly hope that cooler heads will prevail and that we can handle any issues they may have with the program in the legislative process,” Epstein said at a press conference. “My fear is, as these drag on, regardless of the result, this program will go away because companies do not want to have their names dragged through the front pages of any newspaper.”

The program generates more than $50 million annually for the state, she said. It also provides up to $4 million annually for Kankakee, a significant sum for a city with a general fund budget of $23 million, she said.

I’m not sure why, but nowhere in the article are the adamant claims by Kankakee that these are overwhelmingly out of state companies looking for an Illinois sales tax nexus, not Chicago-area companies looking to avoid high local taxation. From a press release…

Of the 48 companies participating in the program, two-thirds relocated to Illinois from out of state due to this opportunity generated $1,395,380 in Illinois sales tax receipts under the program. Those out-of-state companies produce more than 90% of the total revenue under the program, meaning most of the money brought in through the program comes from companies who wouldn’t have any presence in Illinois — and wouldn’t charge, collect and pay any sales taxes to the state — if not for this program.

An additional 14.5% of the participating companies have multiple locations in Illinois yet none in Chicago generated $87,681 in sales tax receipts. Some of these businesses may have locations within the RTA region.

Remaining Businesses in the Program
12.5% represent procurement companies generating $33,040 in sales tax receipts
6.2% represent brick-and-mortar locations in Kankakee generating $25,308 in sales tax receipts [Emphasis added.]

* This Springfield story also leaves out an important point

Gov. Pat Quinn signed a bill this past week that would eliminate the type of skirmish that occurred between the Sangamon County Board and local school districts last year over what the board’s role should be if voters approved a sales tax increase for school construction.

Quinn signed Senate Bill 2170, which eliminates the ability of county boards to block or reduce school construction sales tax levies. From now on, if county school districts put a referendum on the ballot, voters will have the final say, not county boards.

Sangamon County voters turned down a 1 percent sales tax increase for schools in November 2010. On the same ballot was an advisory referendum, put there by the Sangamon County Board, that asked voters if the sales tax had been approved, how involved the county board should have been in its implementation.

At the time, Sangamon County Board Chairman Andy Van Meter said the board wanted voters to tell it whether it should take into consideration other potential needs in imposing a tax, such as whether more money is needed for law enforcement or infrastructure.

This is the same bill I told you about last week

A bill signed into law by Gov. Pat Quinn on Tuesday expands the duties of regional superintendents of schools. Yes, the same regional superintendents who haven’t been paid since the end of June because Quinn vetoed their salaries out of the state budget.

I kid you not.

SB 2170 takes county boards out of the equation when voters approve a sales tax increase for school construction. Up until now, the law gave county boards the option of imposing the sales tax even if voters approved it, and gave county boards the right to reject putting the questions onto the ballot.

The bill also does this…

For all regular elections held on or after the effective date of this amendatory Act of the 97th General Assembly, the regional superintendent of schools for the county must, upon receipt of a resolution or resolutions of school district boards that represent more than 50% of the student enrollment within the county, certify the question to the proper election authority for submission to the electors of the county at the next regular election at which the question lawfully may be submitted to the electors, all in accordance with the Election Code. [Emphasis added.]

To date, nobody else has picked up this rather ironic angle.

* From the AP

Gov. Pat Quinn’s Liquor Control Commission has hired a Chicago alderman’s daughter as a part-time secretary for $37,570, making her the latest in a line of politically linked appointees by the administration this year. […]

Quinn has been criticized for several recent appointments of connected Democrats.

He named former Rep. Mike Smith to the Illinois Educational Labor Relations Board in June, even though Smith isn’t technically qualified for the $94,000 position. He made Jennifer Burke, daughter of Supreme Court Justice Anne Burke and Chicago Alderman Edward Burke, a $117,000 member of the Pollution Control Board last month. He also tabbed former Treasurer Alexi Giannoulias and ex-Senate President Emil Jones for high-profile though unpaid positions this summer.

Are we gonna see stories every time Quinn uses his legal prerogative on patronage jobs? I mean, if that was the case, newspapers would’ve been doing nothing but this under pretty much all of his predecessors. In the grand scheme of things, Quinn’s patronage hires have not been all that egregious. A little perspective might be in order here.

*** UPDATE *** I just talked to Steve Schnorf, the chairman of the Liquor Control Commission.

This woman is not just a “secretary,” she has an official state position requiring a gubernatorial appointment. She’s the “board secretary” and her compensation is set by statute. Quinn sent over three names as a courtesy to the commission, which Schnorf said was “a first class” act on Quinn’s part.

The amount left out of these stories is quite disturbing.

- Posted by Rich Miller        

  1. - anon - Wednesday, Aug 31, 11 @ 1:08 pm:

    Really amazing that the Tribune fails to report the key fact regarding the Kankakee sales tax incentive program: virtually all of it involves internet companies with no other connection to Illinois other than a Kankakee sales office. RTA and Chicago have nothing to gain by challenging these arrangements. Thanks to Rich for doing a better job covering state policy issues than the Tribune (of course your readers are more sophisticated, and demand more).

  2. - depaul - Wednesday, Aug 31, 11 @ 1:24 pm:

    As regards Quinn using his “legal perogative” to make patronage hires, there should be No patronage hires — because they are part of the culture of IL political corruption and rightfully lead to public mistrust.

  3. - Ahoy - Wednesday, Aug 31, 11 @ 1:25 pm:

    –gave county boards the right to reject putting the questions onto the ballot.–

    County Boards actually had to put the question on the ballot when the requirements were meet. The County Board had to vote to put it on ballot, but they did not have a real choice in the matter. The language was very clear in the initial law that the County Board shall vote to put the referendum on the ballot… yes, it’s as goofy as it sounds. They did of course have the right to set a lower rate(even to zero) if the referendum was approved.

  4. - Rich Miller - Wednesday, Aug 31, 11 @ 1:25 pm:

    ===there should be No patronage hires===

    Do you really want to put all state jobs into civil service?

  5. - wordslinger - Wednesday, Aug 31, 11 @ 1:27 pm:

    It’s the rare media outlet that gets anything beyond the most basic tax and spend stories correct.

    In regards to Emanuel’s TIF presser, all the TV media reported TIFs as such:

    “In a TIF, property taxes are frozen for 20 years, with the increase in revenues going into a special fund.”

    The contradiction was lost on all the reporters.

  6. - shore - Wednesday, Aug 31, 11 @ 1:28 pm:

    $37k is a lot of money for a part time secretary job. When Illinois politicians start to behave responsibly which they’ve shown repeatedly they can’t do, we’ll give them the benefit of the doubt.

  7. - 60614 insider - Wednesday, Aug 31, 11 @ 1:33 pm:

    If this is such a great program and all of the businesses are from out of state, why is Kankakee so adamant on hiding the names of the businesses and their locations.

  8. - The Captain - Wednesday, Aug 31, 11 @ 1:45 pm:

    I remember back when I made $37k, I could never decide whether to take the blue or the red Mercedez to work, so on many days I just didn’t go.

  9. - Anonymour - Wednesday, Aug 31, 11 @ 1:51 pm:

    The reason the patronage hires are interesting to the press are that they provide a “man bites dog” story. Patronage hires by a (former) self-styled reformer are much more interesting than patronage hires by folks who are expected to do them.

    Since the press remembers that our Governor used to advertise himself as a reformer, these stories will continue to be printed.

    (Whether the press remembers Quinn’s work in the Walker administration is another question.)

  10. - wishbone - Wednesday, Aug 31, 11 @ 1:55 pm:

    “Do you really want to put all state jobs into civil service?”

    I can see policy level jobs being appointed, but a secretary.

  11. - Rich Miller - Wednesday, Aug 31, 11 @ 1:57 pm:

    ===I can see policy level jobs being appointed, but a secretary. ===

    All of those jobs listed above were policy level jobs. And while odd that a secretary isn’t protected, it’s really not the end of the world. I mean, we have a state government that is 98 percent unionized.

  12. - Ahoy - Wednesday, Aug 31, 11 @ 2:03 pm:

    Is the Illinois Educational Labor Relations Board and Pollution Control Board positions part time or full time jobs? All three of the jobs mentioned seem exceptionally over-paid for what I’m guessing it actually entails. Obviously a part-time secretary making $37,000 a year is over-paid.

    Isn’t that a bigger story than patronage when we can’t pay bills?

  13. - Its Just Me - Wednesday, Aug 31, 11 @ 2:27 pm:

    Just because Quinn isn’t as bad about it as previous governors he should get a pass? And this is the same man who has been complaining about insider politics and wrong-doing for decades. He set a higher standard for himself and he should be called out when he breaks his own rules.

  14. - Anonymous - Wednesday, Aug 31, 11 @ 2:29 pm:

    Unless you are de-fusing bombs or trying to get the Governor to stick to prepared remarks, $37K is way too much for a part-time state job.

  15. - Rich Miller - Wednesday, Aug 31, 11 @ 2:30 pm:

    ===called out when he breaks his own rules. ===

    I cannot remember the last time he talked about the evils of patronage. Even when he was treasurer he engaged in patronage.

    And if, as you say, he “isn’t as bad” as previous governors, then that ought to be a story as well.

  16. - Stones - Wednesday, Aug 31, 11 @ 2:37 pm:

    I agree with the posters who cite PQ for his years of insistence that he is a “reformer” and that he doesn’t engage in “business as usual”. When one occupies the glass house they ought not throw stones.

  17. - Generation X - Wednesday, Aug 31, 11 @ 2:38 pm:

    People are a little more sensitive to where their tax money goes these days than in the past. Isn’t that why Quinn was such a big champion for the new FOIA law? The problem comes when these patronage hires have little to no experience in their jobs and end up making decisions which cost the State millions in lawsuits, or even worse make decisions which cause people to be placed in harms way. There are far bigger consequences than bloated salaries to some of these hires

  18. - Loop Lady - Wednesday, Aug 31, 11 @ 2:43 pm:

    and lets remember folks that Pat is not Rod and there are 20,000 fewer employees in State government than there were several years ago…

  19. - Rich Miller - Wednesday, Aug 31, 11 @ 2:46 pm:

    Stones, I don’t disagree, but if these are payback stories, then they should be far more explicit about the reasoning. Right now, it’s just “GASP! There’s gambling in the casino!”

  20. - Anon - Wednesday, Aug 31, 11 @ 2:47 pm:

    ===In the grand scheme of things, Quinn’s patronage hires have not been all that egregious.

    REALLY Rich I cant stop from laughing at that one.

  21. - Rich Miller - Wednesday, Aug 31, 11 @ 2:49 pm:

    Anon, you apparently arrived in state government last week.

  22. - Quinn T. Sential - Wednesday, Aug 31, 11 @ 2:57 pm:

    {All of those jobs listed above were policy level jobs. And while odd that a secretary isn’t protected, it’s really not the end of the world. I mean, we have a state government that is 98 percent unionized.}

    Again; at $32/hr for a part time job, Schnorf should have directed that this position be written out of the budget, or the compensation substantially reduced.

    In the big picture its not much but it sends a message that the tough decisions are being made. Have the people relying on her support type and file their own work.

    Instead this hire sends the message of “same old, same old”

  23. - Demoralized - Wednesday, Aug 31, 11 @ 3:16 pm:

    Rich, you may want to check with the Commission to verify the salary. As I said yesterday in comments, I’m betting that the salary quoted is the full-time salary for that position title and that the individual will be paid substantially less. And, just a reminder to people, if you want to check up on what this individual is making there is a state website that lists all of the salary information after each pay period. Feel free to police her salary.

  24. - reformer - Wednesday, Aug 31, 11 @ 3:26 pm:

    For those who criticize Quinn for hiring an alderman’s daughter, is nepotism also objectionable when Republicans do it?

    Today’s Daily Herald has a page-one story about nepotism in Rosemont. Ten members of the Stephens clan work for the village for a combined annual salary of nearly $1 million. Mayor Stephens is also the Republican Committeeman of Leyden Township.

    If Republicans want to instruct Democrats about the evils of nepotism and patronage, shouldn’t they take the plank out of their own eye first?

  25. - Stones - Wednesday, Aug 31, 11 @ 3:26 pm:

    Rich, PQ made these patronage a stories newsworthy via his own actions over the years. There would not be these stories if he he had not consistently run on the reformer platform.

  26. - Rich Miller - Wednesday, Aug 31, 11 @ 3:29 pm:

    Stones, please find me some Quinn comments on patronage. Thanks.

  27. - Rich Miller - Wednesday, Aug 31, 11 @ 3:31 pm:

    Thanks, Demoralized. I called Schnorf a couple of hours ago. Haven’t heard back yet.

  28. - Stones - Wednesday, Aug 31, 11 @ 3:53 pm:

    Rich, one that comes to mind immediately is his promise to “fumigate” state govt of Blago appointees. As far as I can tell, that has not happened at least on a large scale.

  29. - Pelon - Wednesday, Aug 31, 11 @ 3:55 pm:

    “these are overwhelmingly out of state companies looking for an Illinois sales tax nexus”

    What they fail to mention is that these are likely out of state companies who already have an obligation to collect the state wide use tax of 6.25%. By “accepting” their orders in Kankakee, they switch their obligation to paying Retailers’ Occupation Tax. The Kankakee ROT rate is also 6.25%, but unlike with the local portion of the use tax which is distributed to all municipalities, the local portion of the ROT tax goes solely to Kankakee and Kankakee County. The company benefits by getting the refund, and Kankakee benefits by getting a much larger portion of the 6.25% than they would have received if the company continued to collect use tax. Who loses? Every other municipality in the state who should be sharing the local portion of the use tax.

    There is no reason for a company which does not already have a nexus with Illinois to intentionally create a local nexus.

  30. - Rich Miller - Wednesday, Aug 31, 11 @ 3:55 pm:

    OK, I’ll give you that one. But then he walked away from it right away after he realized what he did.

  31. - Rich Miller - Wednesday, Aug 31, 11 @ 3:57 pm:

    ===There is no reason for a company which does not already have a nexus with Illinois to intentionally create a local nexus. ===

    Actually, there is a reason. I believe the state passed a law about this several years ago.

  32. - hisgirlfriday - Wednesday, Aug 31, 11 @ 4:01 pm:

    They’re criticizing Quinn for putting Alexi and Emil in UNPAID positions?


  33. - Leave a Light on George - Wednesday, Aug 31, 11 @ 4:04 pm:

    Perhaps if he had fumigated the appointment of his own patronage appointments would be less of a story.

  34. - Alexander cut the knot. - Wednesday, Aug 31, 11 @ 4:23 pm:

    An out-of-state company that has no nexus with Illinois does not need to create nexus, UNLESS, it is bidding on state jobs and has to show it collects taxes to be an eligible bidder, or it wants to voluntarily collect taxes and get the State off its back but also get back a share from the locals to pay for its efforts or add to its margin.

  35. - Its Just Me - Wednesday, Aug 31, 11 @ 4:42 pm:

    Rich, I disagree with your description of these jobs being “legal patronage” jobs. These should be “legal public service” jobs where the best person is hired for the job. There should be zero tolerance for patronage.

  36. - Rich Miller - Wednesday, Aug 31, 11 @ 4:42 pm:

    IJM, look at the update.

  37. - Rich Miller - Wednesday, Aug 31, 11 @ 4:43 pm:

    Zero tolerance for patronage? So, Hillary Clinton couldn’t be Secretary of State?

    Get out of your ivory tower, man.

  38. - tada - Wednesday, Aug 31, 11 @ 5:09 pm:

    She wasn’t appointed to a low-level position. She’s not a Secretary, as in a person who serves as an assistant, but is THE Secretary of the Board. The person who serves as the record keeper of board meetings, decisions, i.e.

  39. - sal-says - Wednesday, Aug 31, 11 @ 5:30 pm:

    “A little perspective might be in order here.”

    Yeah, but.

    Isn’t this the Mr. Squeaky Clean Quinn?

  40. - Pelon - Wednesday, Aug 31, 11 @ 6:11 pm:

    “Actually, there is a reason. I believe the state passed a law about this several years ago.”

    Can you cite the law?

  41. - Quinn T. Sential - Wednesday, Aug 31, 11 @ 7:17 pm:

    So the Governor keeps his appointment power for a questionable position with a salary set by statute, and sends over a list with a wink and a nod.

    But he turns around and eliminates the statutorily salaried and ELECTED position of Regional Superintendent of Education.

    He funds his favorites because he has to by statute but eliminates the statutory salaries for those that we effectively appoint by election.

    Nothing to see here people; move along, move along…

  42. - steve schnorf - Wednesday, Aug 31, 11 @ 8:28 pm:

    There was no wink, no nod.

  43. - Meanderthal - Wednesday, Aug 31, 11 @ 8:30 pm:

    I got a question. How does Schnorf get around the prohibition on serving on a state board while also being a lobbyist.

  44. - Algonquin J. Calhoun - Wednesday, Aug 31, 11 @ 8:32 pm:

    Tell you what - when Quinn stops treating the non-unionized, non-political hack managers like crap (I’m one of the few left - 17 years at the state) I’ll give him the benefit of the doubt on these appointments. Until then, every advantage/job/appointment/consideration he gives to somebody that’s “connected” serves to reinforce my opinion of him as an incompetent fraud.

  45. - Soccertease - Wednesday, Aug 31, 11 @ 8:53 pm:

    I think if Quinn had fumigated the Blago hacks he would be given a little more slack by the press and state government insiders.

  46. - wordslinger - Wednesday, Aug 31, 11 @ 9:26 pm:

    Schnorf, you’re a class act for a socialist, anti-constitutional, America-hating elitist.

    You know, what we used to call a Main Street Illinois Republican dedicated public servant.

    Cheers, mate. Long may you run.

  47. - Rich Miller - Wednesday, Aug 31, 11 @ 9:33 pm:

    Meanderthal, because he’s not a lobbyist.

  48. - Zoble21 - Wednesday, Aug 31, 11 @ 10:46 pm:

    Noone would care about Quinns appointments if Quinn would quit the act of “Holier than thou” act he has come to perfect. He attacts everything done by everyone else as unethical then pulls this crap.

  49. - Pot calling kettle - Wednesday, Aug 31, 11 @ 11:46 pm:

    ==The amount left out of these stories is quite disturbing.==

    There might be some more depth to these stories if the capitol press pool wasn’t constantly shrinking.

  50. - anon - Thursday, Sep 1, 11 @ 8:44 am:

    When they mentioned Target’s name, it is implied that but for the deal, they wouldn’t be collecting sales tax. I was always under the impression that earlier, and the likes would not collect sales tax in order to compete with Amazon. But in order to prevent a nexus from being established, customers could not return items to the brick and mortar stores. Customers did not understand why this was, and eventually all of those retailers started charging sales tax and had more “synergy” with the brick and mortar stores. So it seems that Target (at the very least) would have already been collecting the tax, but this was a way for them to keep some of it for themselves. Even though they exited the agreement, if you go to the website, they are still charging sales tax if you live in Illinois. So who would be getting the local share now?

  51. - Anonymous - Thursday, Sep 1, 11 @ 9:15 am:

    (235 ILCS 5/3‑9) (from Ch. 43, par. 105)
    Sec. 3‑9. Compensation of commissioners, secretary, and employees. The chairman of the Commission shall receive an annual salary of $32,000 or such greater amount as may be set by the Compensation Review Board. The other commissioners shall receive an annual salary of $28,000 or such greater amount as may be set by the Compensation Review Board. The secretary of the Commission shall receive an annual salary as set by the Compensation Review Board. All clerks, inspectors, and employees of the Commission shall receive reasonable compensation in an amount fixed by the Commission, subject to the approval in writing of the Governor.
    (Source: P.A. 91‑798, eff. 7‑9‑00.)

    So her salary is not a stautory salary, but one set by the Compensation Review Board. Let’s get it right.

  52. - anon - Thursday, Sep 1, 11 @ 1:38 pm:

    — Anonymous - Thursday, Sep 1, 11 @ 9:15 am —

    there is no compensation review board… it was disbanded several years ago. There is a statute that freezes their last adjustment and does not allow for COLAs until a future date. So yes, LETS GET IT RIGHT.

    Either way, Quinn does not set this salary. He can’t increase it either.

Sorry, comments for this post are now closed.

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* 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

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