SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Red ink as far as the eye can see

Wednesday, Jan 8, 2014

* The governor’s budget office has posted its new three-year projection as required by law. Here’s the projection for revenue losses due to the expiration of the temporary income tax hike. These are fiscal years and the first line is for personal income tax receipts and the second line is for corporate receipts…

* Without changing any state laws or programs, GOMB is projecting a $1.9 billion deficit in FY 2015, $4.1 billion by 2016 and $4.6 billion by 2017. And the state’s bill backlog is projected to grow to $16.2 billion by the end of FY 2017.

The budget office’s spending projections (which you can see here) use existing law with existing programs, and calculate savings from the pension reform bill in FY 16 and 17. So, they’re projecting increases all around. But those increases won’t exist without those income tax revenues.

* From Voices for Illinois Children…

According to GOMB projections, revenue losses due to the scheduled decrease in income tax rates will lead to budget shortfalls of $1.9 billion in fiscal year 2015 (which begins in July 2014), $4.1 billion in FY 2016, and $4.6 billion in FY 2017. Closing gaps of this magnitude would require draconian cuts to programs and services that are essential for the well-being of children, families, and communities across Illinois.

The state’s investments in early childhood education, K-12 education, and higher education — which have eroded over the past five years — would be significantly undermined. Programs such as child care assistance, afterschool programs, child protection services, and a wide range of community-based services for families, people with disabilities, and seniors would be in serious jeopardy.

* From the Senate Republicans

Because the major portion of the 2011 tax hike is set to expire automatically, the budget office was required to assume that the state will lose those dollars. The drop in that revenue coupled with the anticipated spending growth has the potential to create the largest deficits the state has ever seen.

The figures released by the Governor’s office clearly reveal that without a decrease in spending, the state will be forced to choose between higher taxes and massive deficits. Ever since the tax hike was imposed during a lame-duck legislative session in 2011, Senate Republicans have warned that significant spending reductions were needed to allow for the tax increase to expire as promised.

The projections from Quinn’s budget office reveal the Governor plans to continue to increase state spending regardless of whether or not the state has any money.

Not quite. The projections, as explained above, were put together using existing laws and programs.

- Posted by Rich Miller        


40 Comments
  1. - wordslinger - Wednesday, Jan 8, 14 @ 2:38 pm:

    Any time the Senate GOP wants to put together a one-page budget summary of spending and revenues based on the tax increases expiring, by all means, go for it.


  2. - RNUG - Wednesday, Jan 8, 14 @ 2:39 pm:

    No surprise to the people here. The only question is whether a tax continuation or increase will be an issue in the general election or will be left for the next governor to deal with.


  3. - Demoralized - Wednesday, Jan 8, 14 @ 2:40 pm:

    Looking forward to the Senate Republican plan on how to cut $4 billion from the budget. Of course I’m assuming they will go with the refrain that Republicans usually go with which is that it’s not our problem and the Democrats need to solve it. Either offer a solution or shut up.


  4. - Formerly Known As... - Wednesday, Jan 8, 14 @ 2:47 pm:

    Nothing to worry about, since we so judiciously used the increase in funds during the “temporary” tax hike to help get our ship in order.

    We knew these extra funds were exactly that - “extra” - and wouldn’t last forever, since we designed it as such. Thus, we used those funds well to help get things back on stable footing, exactly as was planned and promised from the beginning.

    Right… right? #gulp


  5. - Walter Mitty - Wednesday, Jan 8, 14 @ 2:47 pm:

    I am curious to see if the Farmer capitalizes on this. Meaning, more than saying ” See the insiders did this.” If he can lay out ideas that close the deficit, he stands to continue the referendum rhetoric. My hope is someone will. My guess nobody will.


  6. - Anon - Wednesday, Jan 8, 14 @ 2:57 pm:

    Speaker Madigan created this problem by putting in the sunset clause, instead of making the 2010 hike a permanent increase in revenues that the state clearly needed. No one seriously expected the state to grow or to cut its way to a balanced budget, not even Leader Radogno.


  7. - drew - Wednesday, Jan 8, 14 @ 3:13 pm:

    I’m reading that post from the Senate Republicans, but I’m having trouble finding the part where they spell out an itemized list of the $4 bn of excess spending that should be cut.


  8. - Bogart - Wednesday, Jan 8, 14 @ 3:14 pm:

    It’s the Illinois “Sequester”. The GA’s mistake was not putting in automatic across the board program cuts tied to the roll back of the tax increase. The good news, however, is that this should make it obvious to the Supremes that they must uphold the pension reforms.


  9. - dupage dan - Wednesday, Jan 8, 14 @ 3:14 pm:

    I could see Rauner railing against this problem and promising to cut the “waste, fraud and abuse” to balance the budget. If he wins, I can see him coming to the electorate and telling us that now that he is in office, he sees what is really happening and supporting making the tax permanent.

    Unless, that is, he decides to act differently than so many other candidates who get schooled upon taking office.

    There is nothing new here. Only those in total denial would see this differently. Other candidates who promise to allow the temp tax to expire may have different solutions but will likely come to the same conclusion if elected. Same old same old.


  10. - Bogart - Wednesday, Jan 8, 14 @ 3:16 pm:

    Further, it’s the Party in Power that should propose the cuts.


  11. - Rich Miller - Wednesday, Jan 8, 14 @ 3:17 pm:

    ===it’s the Party in Power that should propose the cuts. ===

    Actually, the SGOPs did propose a menu of cuts in 2012 and the Dems used that list to whack the living tar outta their candidates.


  12. - RNUG - Wednesday, Jan 8, 14 @ 3:25 pm:

    Bogart - Wednesday, Jan 8, 14 @ 3:16 pm:

    Actually, it doesn’t.

    As the IL SC made clear in Jorgenson v Blagojevich (2004):

    “No principle of law permits us to suspend constitutional requirements for economic reasons, no matter how compelling those reasons may seem.”


  13. - PublicServant - Wednesday, Jan 8, 14 @ 3:28 pm:

    The reality is and always was that there is a structural revenue shortfall causing the fiscal problems here in Illinois. Why not look at the CTBA plan that will lower current income taxes for 94% of Illinois taxpayers?


  14. - Bogart - Wednesday, Jan 8, 14 @ 3:35 pm:

    When the “compelling reasons become reality”, I trust the court will act to save the State.


  15. - RNUG - Wednesday, Jan 8, 14 @ 3:42 pm:

    PublicServant - Wednesday, Jan 8, 14 @ 3:28 pm:

    I agree. It makes a lot of sense.

    The problem with the CTBA progressive income tax plan is it requires a Constitutional Amendment that must be approved by the GA, and then approved by the voters. To get the approval of the voters it will have to be sold … and I don’t see anyone who could sell it. Where is the Adlai Stevenson or Richard Ogilvie or Jim Thompson that could take it and run with it?

    The solution I joked about last year could be implemented just by the GA: raise the flat income tax rate really high and exempt the first $100K or $150K on income. At that level, you could even do a “fairness reform” and tax pension / Social Security income. The down side to such a proposal is it would also increase the corporate tax rate, so there may need to be a new exemption there also.


  16. - PublicServant - Wednesday, Jan 8, 14 @ 3:44 pm:

    And wait, wasn’t the line “Cut pensions or you’ll have to cut education and welfare.”? So, since the pension gut has occurred, then there’s no problem right? Oops, reality rears its ugly head again.


  17. - PublicServant - Wednesday, Jan 8, 14 @ 3:48 pm:

    @RNUG - If your plan would accomplish the elimination of the structural revenue deficit by taxing marginal income over a certain amount, then I could support that. Oh, and when will the pension lawsuits begin to be heard? Any news on that RNUG?


  18. - RNUG - Wednesday, Jan 8, 14 @ 4:01 pm:

    I don’t expect the pension lawsuits to be fast tracked any time soon. Right now there is a holding pattern of sorts while everyone waits to see how many suits get filed. Then you will probably see them all get consolidated into one action but it’s possible, given the different classes, several could move forward. How it moves from there will depends on the arguments made. Remember, we are still waiting for a ruling on the “Maag” that was fast tracked.

    I was a bit disappointed reading the TRS suit filed in Cook County because it pretty much ignored the underlying contract law issues and concentrated on making the “pension clause” claim. I really want to read the RSEA suit filed here in Sangamon County but haven’t found an online copy. I’ve been sick and haven’t gotten out to get a copy of the paperwork from the courthouse.


  19. - Rich Miller - Wednesday, Jan 8, 14 @ 4:05 pm:

    RNUG, I emailed you a copy of the RSEA suit.


  20. - Charlie Wheeler - Wednesday, Jan 8, 14 @ 4:08 pm:

    Point of Information:

    Section 3(a) of Article IX of the Illinois Constitution says in relevant part: “In any such (income) tax imposed upon corporations the rate shall not exceed the rate imposed on individuals by more than a ratio of 8 to 5.”

    That would suggest that the General Assembly and the governor could increase the individual income tax rate to whatever level they chose, with no legal requirement to enact a similar increase in the corporate income tax rate.


  21. - walker - Wednesday, Jan 8, 14 @ 4:14 pm:

    Charlie: yes, and that was one of the options initially evaluated. mark


  22. - Formerly Known As... - Wednesday, Jan 8, 14 @ 4:24 pm:

    Besides, Gov. Quinn told me this was supposed to simply be a 1% “education surcharge”. And we gave him double!

    Our schools are now flush with cash. Just wait until you see their balance sheets!

    Right… right? #gulp


  23. - Norseman - Wednesday, Jan 8, 14 @ 4:36 pm:

    Snark alert

    Perhaps if we someone who can craft a really really compelling preamble, maybe the GA can pass a graduated tax that will convince the Supreme Court to disregard another portion of the Illinois Constitution.


  24. - Rich Miller - Wednesday, Jan 8, 14 @ 4:39 pm:

    Good snark, Norseman.


  25. - PublicServant - Wednesday, Jan 8, 14 @ 4:51 pm:

    Maybe even a preamble to a preamble, or is that preramble?


  26. - a drop in - Wednesday, Jan 8, 14 @ 4:51 pm:

    Everybody will be campaigning on the income tax sunset depending on whatever party they represent. In 2015 whomever wins will look at the tax revenue Colorado generates on pot and start drooling.


  27. - Liberty First - Wednesday, Jan 8, 14 @ 5:03 pm:

    RNUG - the teachers suit your referring too didn’t include contracts (I would imagine) because they are not a union organization but a professional organization. I understand the various groups have been in touch with each other. The various teachers unions suits will follow.


  28. - Soccermom - Wednesday, Jan 8, 14 @ 5:11 pm:

    Wait. i thought that reducing taxes increases revenues. It’s magic!


  29. - RNUG - Wednesday, Jan 8, 14 @ 5:23 pm:

    Rich,

    Thanks. Saves me making some county clerk sick.


  30. - RNUG - Wednesday, Jan 8, 14 @ 5:27 pm:

    Liberty First - Wednesday, Jan 8, 14 @ 5:03 pm:

    Unions have nothing to do with whether or not it was a contract.

    It has to do with the offer of employment with certain terms (which may have varied in some things like salary and job protection from person to person) and the individual acceptance of those terms.


  31. - Anon - Wednesday, Jan 8, 14 @ 5:37 pm:

    Does any informed person doubt the State is chronically short of revenue to pay its bills, even though it´s a low-spending state?


  32. - Fed up - Wednesday, Jan 8, 14 @ 6:20 pm:

    Well the cracking money needs to start rolling in. Maybe someone will pull “soy boy” aside amd explain a Chicago casino with some video poker machines at midway and Ohare( think of the revenue from stranded flyers this week ) would enrich the state tresurary. Legalize and tax pot, and write a legal Internet sales tax bill. New York was able too. After all that a bake sale( after pot Is legal) at Gov mansion it’s not being used for anything.


  33. - William Place - Thursday, Jan 9, 14 @ 12:44 am:

    I believe the States “investment in lower education’ has been producing a huge negative return for decades. What is it they say about insanity, doing the same thing over and over while expecting a different result?


  34. - PublicServant - Thursday, Jan 9, 14 @ 5:47 am:

    @William Place - Did you run out of room to tell us about your proposal to rectify the situation, or are you just driving by bud?


  35. - PublicServant - Thursday, Jan 9, 14 @ 5:50 am:

    @FedUp - Your suggestions for new revenue sources seem to hit the poor and middle class where none of the wealth has gone these last 30 years. Follow the money pal, and raise the new revenue from those whose income has been growing by leaps and bounds while the rest of up have been left to pick up the scraps. Your suggestions seem to go after the scraps too. Nice.


  36. - Pacman - Thursday, Jan 9, 14 @ 6:28 am:

    Thanks RNUG for pointing out the contractual issue as it relates to pensions. I’m not a legal beagle, but I would think the contract argument is as compelling an argument as the constitutional aspect. Both seem to go hand in hand as the constitution refers to pensions as an “enforceable contractual relationship.”


  37. - wordslinger - Thursday, Jan 9, 14 @ 6:46 am:

    –believe the States “investment in lower education’ has been producing a huge negative return for decades. What is it they say about insanity, doing the same thing over and over while expecting a different result?–

    What do you say about crazy people who think the world would be better off without schools?


  38. - wordslinger - Thursday, Jan 9, 14 @ 9:49 am:

    –This has nothing to do with no schools,–

    Quit showing off that “excellent public education.”


  39. - William Place - Thursday, Jan 9, 14 @ 9:59 am:

    Interesting how my response has been redacted. wordslinger, that was snotty, I used no invective to you.


  40. - William Place - Thursday, Jan 9, 14 @ 10:02 am:

    I must have stepped on some union toes!


Sorry, comments for this post are now closed.


* "Mike Madigan's favorite state Senator"
* #Winning!
* In the spirit of the times...
* 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

  
* Qualcomm ushers in the ‘next era of wearables’ with Snapdragon Wear 2100 SoC
* Alcatel to launch OneTouch Idol 4, Idol 4S, packaging morphs into VR goggles
* Get the Nexus 5X even cheaper (starting at $280) on eBay while you can
* HTC M10 mockup revealed, to have a new name at launch
* According to leak, HTC’s One M10 will feature UltraPixel technology front and back
* Samsung Galaxy S7 pre-orders may commence the very day of the announcement
* Future Apple Watch Could Adjust iPhone Volume Based on Ambient Noise

* Melky: White Sox must play like family to contend
* White Sox remodel in big way this offseason
* White Sox ink Ishikawa to Minor League deal
* White Sox sign righty Latos to 1-year deal
* White Sox sign Mat Latos for one year, $3 million
* Source: White Sox land right-hander Latos
* White Sox lag behind league in solving second spot

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


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

Archives
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


* Rauner's lawsuit reforms will create jobs in Il.....
* Morning Spin: With Obama gone, Illinois Democra.....
* Obama calls for budget compromise - Northern St.....


* EXCHANGE: iPads enhance learning at Marion schools
* Chicago transit overhaul gets $156M in new federal funds
* 29 school districts get help financing building projects
* Illinois asks FEMA for more time to assess flood damage
* Report: Illinois' budget woes will require 'painful' fixes
* Chicago-area man sentenced to 20 years in drug case
* Aurora to pay $2.65 million to wrongly imprisoned man
* Illinois coal mine owner seeks expansion as fire lingers
* 'A lesson in humility.' Obama recalls his Springfield tenure
* Lawsuit of man who questioned police shootings dismissed

* President Obama returns to his political roots, connects with past friends, supporters
* Bill aims to create foundation to raise private money for state fairgrounds
* Obama returns to his political roots, connects with past friends, supporters
* Presidential visit notebook: Obama doesn't like horseshoes?
* District 186 misses out on construction bond program
* Vehicle emissions test notices suspended amid budget impasse
* Rauner: Bureaucracy is holding Illinois back
* Peoria's Par-A-Dice casino laying off 40, cites impact of video gaming
* IDOT Traffic Safety Division moving to new Springfield location
* Illinois bill would criminalize filming fights to put online

* New to Airbnb: Van Gogh's bedroom
* Giving a whole new meaning to power walking
* What if an hour of exercise could power your smartphone?
* President Barack Obama's remarks today to Illinois legislators
* Boeing cutting managers, executives in commercial planes unit


* Occupiers at Oregon refuge say they’ll turn themselves in
* Chicago to host 2017 NHL Draft
* The Mix — The Chicago Auto Show (and 4 more cool things to check out this weekend)
* Dear Abby: She wants more than just platonic dates
* Georgia Nicols horoscopes for Feb. 11
* Yelp names three Chicago eateries among Top 100 in the nation
* Vehicle emissions test notices suspended amid budget impasse
* Tony Bennett up for 19th Grammy; rare Friars Club honor
* Sneed: Former inspector general’s suit against the city
* Brown: Rare drama in City Council, but final act is a letdown


* Chicago to host 2017 NHL draft: report
* Man shot on West Side
* 2 shot dead in Gary
* Justice Department enters civil rights suit against Ferguson in strong position
* Police seek witness to several crimes in Museum Campus area
* Latest Illinois budget casualty: No heads-up on emissions testing
* Chicago transit overhaul gets $156M in federal funds, $125M more possible
* 3 'bladed weapons' used to kill most of 6 family members in Gage Park
* Lawyer seeks to question Emanuel on 'code of silence' for lawsuit
* Returning to his roots, Obama calls for an end to 'poisonous political climate'


* President Obama returns to his political roots, connects with past friends, supporters
* Our View: Illinois officials should heed Obama's call for civility, compromise
* Bill aims to create foundation to raise private money for state fairgrounds
* Bernard Schoenburg: State GOP past $250,000 in support for Rep. Avery Bourne
* Eugene Robinson: Rubio's revealing loop
* Derrik Gay: Reducing fossil fuel dependence aids U.S. troops
* George F. Will: Break the teeth-whitening monopoly
* Obama returns to his political roots, connects with past friends, supporters
* Presidential visit notebook: Obama doesn't like horseshoes?
* District 186 misses out on construction bond program


* Podcast: Tom Kacich 02-11-16
* 40 days of finding our true value
* Look whose team beat No. 1 Sooners
* Light within must overcome darkness
* George Will: Whitening government's stain
* Chuck Koplinski: 'Hail, Caesar!' gently skewers Hollywood
* Upheaval for Dems, GOP
* Notes-Worthy: Jon Foley
* Rich Warren: Caring for turntables is key
* Entertainment listings, Feb. 11-18, 2016


* Brazil and University of Texas reach deal on Zika vaccine
* Ex-executive due for sentencing in West Virginia spill
* South African police captain arrested in fatal beatings
* South African bookshop a treasure trove of eclectic history
* Hoffenheim promotes U19s coach Julian Nagelsmann to top job

* 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

* Durbin Joins Labor/Immigrant Workshop and ......
* Emanuel, Durbin, CTA Announce Funding for ......

* Illinois delegation members join together ......

* Where's Weyermuller: Watching Chicago teachers demand more from near-bankrupt system
* Trump, Cruz and Carson discuss health care plans at New Hampshire GOP debate
* Starkehaus: Political Football and “Buy-Cotts”
* Cruz ad: We wouldn't tolerate these values in our children
* Random thoughts. Compromise.
* Ken Dunkin. Great moments in Illinois politics.
* Quotes of the weird quiz.
* Marcus Crassus, Bruce Rauner and the turnaround agenda.
* More Than One Can Bear
* It’s the delegates who matter, dummy!


* 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 SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller