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Taxing issues

Monday, May 12, 2014

* As I told you Friday, eleven House Democrats co-sponsored a bill to completely roll back the 2011 income tax hike. One of those House members was Rep. Willis, who now says she’s undecided about making the tax hike permanent

State Rep. Kathleen Willis is “totally on the fence.”

“I’m totally undecided still. I’m talking to the people in my district to see,” the Addison Democrat said.

“I’m talking to the people in my district” more likely means “I’m waiting to hear from the Speaker.”

Freshman Rep. Willis is currently unopposed.

* Rep. Marty Moylan was the bill’s chief sponsor...

“Right now I’m leaning ‘no’ unless there’s some major reason or change of my mind on it,” Moylan said.

Moylan is most probably a “No.” But what he said is still pretty interesting.

* Rep. Carol Sente is still a solid “No” vote

“I was a firm ‘no’ in 2011, and I continue to be a firm ‘no’ on making the temporary income tax permanent. What we really need is bipartisan, long-term economic development plans and major budget reform,” said Sente, who has outlined such plans in a proposal that’s been stagnant in the legislature since March.

* Meanwhile, Kurt Erickson had this to say over the weekend

One theory for how this will all play out began emerging last week. Rather than take the tough vote, Madigan will ask his members to vote for Quinn’s preferred budget — one that doesn’t include the drastic cuts — but not take a vote on making the income tax permanent.

State government operations would continue as they are now. But, come January when income tax rates roll back from 5 percent to 3.75 percent, the state won’t have enough money to continue on its current track.

Such a move would turn the race for governor into a referendum on whether voters want the tax hike to stay permanent.

A vote for Quinn would be a vote for keeping the tax intact, thus avoiding the doomsday budget scenario he and his agency heads have been laying out this spring.

A vote for Republican businessman Bruce Rauner would be a vote for allowing the tax to roll back and the possibility of major cuts in state spending.

Subscribers know my take on that.

* An insightful take

Rep. Elaine Nekritz, a leading Democrat, says members are split on the best approach.

“I’m not making any predictions right now, it’s all in such a state of flux and every legislator I talk to about the budget and what they’d like to see, how they’d like to see it resolved, has a different idea,” Nekritz says. “Until we get 60 that are on the same page, it’s going to be a real challenge.”

* Related…

* Cullerton: Downstate should be wary of political posturing over tax rates: I don’t believe decimating downstate Illinois will make our state stronger. I can only hope others share my view.

- Posted by Rich Miller        


26 Comments
  1. - Walker - Monday, May 12, 14 @ 9:55 am:

    Erikson’s theorized option would be bad government indeed.

    I don’t mind the Speaker working the legislators up to the last minute, but I do mind getting at them by forcing the agencies and the taxpayers to the precipice.


  2. - wordslinger - Monday, May 12, 14 @ 10:01 am:

    –Such a move would turn the race for governor into a referendum on whether voters want the tax hike to stay permanent.–

    I thought that was how it was going to go down in the first place.


  3. - AFSCME Steward - Monday, May 12, 14 @ 10:03 am:

    “One theory for how this will all play out began emerging last week. Rather than take the tough vote, Madigan will ask his members to vote for Quinn’s preferred budget — one that doesn’t include the drastic cuts — but not take a vote on making the income tax permanent.

    State government operations would continue as they are now. But, come January when income tax rates roll back from 5 percent to 3.75 percent, the state won’t have enough money to continue on its current track.

    Such a move would turn the race for governor into a referendum on whether voters want the tax hike to stay permanent.

    A vote for Quinn would be a vote for keeping the tax intact, thus avoiding the doomsday budget scenario he and his agency heads have been laying out this spring.

    A vote for Republican businessman Bruce Rauner would be a vote for allowing the tax to roll back and the possibility of major cuts in state spending.”

    Typical Mike Madigan leadership. Don’t make any tough choices now. Kick the can down the road. Isn’t this how the pensions became such a mess ?

    If this strategy is followed, and the extension of the income tax isn’t passed in January, the cuts will have to be even bigger, since the state would be spending as though the tax increase passed for 6 months. Not a good plan.


  4. - Just Observing - Monday, May 12, 14 @ 10:08 am:

    Nekritz is not an Evanston rep. — her district doesn’t even touch Evanston — her main office is in Buffalo Grove. WIUS’ mistake, not Rich’s.


  5. - Walter Mitty - Monday, May 12, 14 @ 10:08 am:

    Steward…. Great points… Not sure if anyone saw the report last week that only one person lost their job from the Federal shutdown…. the speaker could be missing the boat on this too… I think the chicken little act may be getting old… Even though we are a mess… People are weary… This may help Rauner even more…


  6. - truthteller - Monday, May 12, 14 @ 10:12 am:

    Is Cullerton the only Democrat in the legislature?


  7. - The Elderly Man You Used to Love - Monday, May 12, 14 @ 10:17 am:

    There is much to lament about the current state of politics, both at the state and national levels. But it strikes me that the prevailing attitude of “don’t tax me, don’t cut anything” really isn’t contributing to the dialogue in any meaningful way. That’s grade school-level citizenship at best. David Broder used to say that the political polarization in our country will not be broken until the American people resoundingly give a mandate to one of the two parties. Maybe our elected officials aren’t the best, but the people electing them aren’t a whole lot better.


  8. - Grandson of Man - Monday, May 12, 14 @ 10:18 am:

    It’s easy to say no. It’s so much harder to come up with a comprehensive plan. I ask the legislators who say no to come up with a plan, so we can see and evaluate it. I ask that of Rauner also. He wants to be the leader that so many think Illinois lacks. If that’s the case, let’s see some plans, instead of evasion, like telling us later or that he’s still working on it.


  9. - Bill White - Monday, May 12, 14 @ 10:29 am:

    Those who want to “drown all government in a bathtub” benefit from gridlock and have no incentive to offer a workable plan.

    Therefore, vague calls to cut unspecified “waste, fraud and abuse” to balance reduced taxation is all that is needed.

    If any Democratic member of the IL House believes their long term career prospects will be better after a collective failure to extend the 5% income tax, they are fooling themselves. Then again, if 60 “other” members of the IL House vote “Yes” then those who vote “No” can ride for free.

    Maybe this is a game of musical chairs to see which 11 Democrats can vote “No” while still passing the extension.

    ===

    I repeat my Ben Franklin riff from Friday, unless Democrats hang together on this, they will surely hang separately.


  10. - Anon - Monday, May 12, 14 @ 10:29 am:

    Is this just more Springfield gamesmanship for show?

    “Oh look, some politicians in Springfield want to roll back the income tax…”


  11. - Westward - Monday, May 12, 14 @ 10:36 am:

    What’s wrong will Illinois politics? Let’s start with this nugget: the implication that so many members of the democratic caucus are “waiting to hear from the Speaker.” So who’s running the joint? Not the people we elect from our districts. Rich has pointed out how unpopular Madigan has become recently, however, members continue to follow blindly knowing these money and staff come re-election time. Minions. That’s who is filling space on the 3rd floor of the Capitol.


  12. - Rich Miller - Monday, May 12, 14 @ 10:39 am:

    ===Minions===

    Minions are staffers.

    I prefer the Steve Brown term “ducklings” for freshman targets and several others who act like they still are.


  13. - Westward - Monday, May 12, 14 @ 10:49 am:

    Yes, Rich, I stand corrected. You’ve made that reference before. So it’s all about political survival once you’re elected, not about campaign promises.


  14. - Bill White - Monday, May 12, 14 @ 10:49 am:

    Also too, the current IL GOP leadership should be nervous if the 5% income tax extension fails to pass.

    If it does fail to pass, Dan Proft will become the “de facto” leader of the GOP IL House delegation.


  15. - Langhorne - Monday, May 12, 14 @ 11:00 am:

    the “emerging madigan plan” violates the constitutional requirement for a balanced budget, since they know revenues would be insufficient. if they throw in use of fewer line items it invites all sorts of mischief. live for today and to hell with tomorrow. if quinn loses, it leaves rauner w dangerously inadequate funding. it is playing chicken on the railroad tracks.


  16. - 47th Ward - Monday, May 12, 14 @ 11:01 am:

    Even Rauner has softened his stance on this, saying the 5% tax rate should be phased out. That’s a heck of a lot different than allowing it to sunset.

    So far, from what I’ve seen and heard, Jim Durkin is 110% behind Bruce Rauner. If all of that is true, that Rauner doesn’t want the tax to expire immediately and that Durkin will help advance Rauner’s interests this session, then a compromise is certainly possible.

    Or I’m just an optimist. If Madigan can’t get 60 votes to keep it permanently at 5%, surely they could find 60 votes to lower it in phases over the next four years.


  17. - Todd - Monday, May 12, 14 @ 11:06 am:

    So what is the differance between this budget idea and a 6 month budget?

    And did everyone forget about Rep. Costello’s NO?


  18. - Bill White - Monday, May 12, 14 @ 11:12 am:

    Also too, what John Cullerton said / wrote.


  19. - Norseman - Monday, May 12, 14 @ 11:14 am:

    Langhorne, true but when has that stopped them before.


  20. - Anon - Monday, May 12, 14 @ 11:46 am:

    If Rauner is elected and the doomsday budget kicks in, downstate districts with state institutions surely would feel the pain. Apparently their Republican representatives would rather see their districts suffer than take the risk of voting for a permanent extension.


  21. - Ghost - Monday, May 12, 14 @ 11:58 am:

    Langhorne - technically its not unconsitutional, but what it does mean is that different agencies would either have to close thier doors completly when they run out of money, or do massive layoffs and service cuts to eck by on what money they have left if there is no cash on hand to go with the approps.


  22. - A guy... - Monday, May 12, 14 @ 12:02 pm:

    Rep. Willis is hedging and she has NO opponent. What does that say about the rest of them who do? That was a carefully scripted response on her part. And short. Just like they write them in …..’s office.


  23. - muon - Monday, May 12, 14 @ 12:03 pm:

    Passing an unconstitutional budget has precedent in a gubernatorial election year. One needs look no further back than 2010.

    http://capitolfax.com/2010/05/27/madigan-talks-about-the-budget-blagojevich-brady/


  24. - Yellow Dog Democrat - Monday, May 12, 14 @ 6:53 pm:

    1) it is not unconstitutional.

    The difference between a six month budget and a what I would call a “placeholder” budget is probably about four and a half months.

    My bet is that agencies would start to run out of money mid-May, using their discretionary budget power agency directors could prolly add a week or two, but I were a governor trying to pass a tax hike I would send out layoff notices in early March effective May 1.

    Once workers hit the sidewalk, you will have maximum effect.for a month right up to the budget and tax vote.


  25. - Just The Way It Is One - Monday, May 12, 14 @ 7:59 pm:

    The Democrats just need to bite the bullet, do the right thing, and pass it. Then tout the $500 PROPERTY Tax Cut/Rebate coming to all Homeowners, and urge the Leaders to cut those Checks in advance around Labor Day.

    Even PONDering the potential of any inevitable BR “Doomsday Budget” of Draconian Cuts if, God forbid, he was to squeak-in, to our Kids’ Education, and across the Board, is utterly repulsive otherwise…!


  26. - zatoichi - Monday, May 12, 14 @ 9:39 pm:

    How does a half year budget solve anything? Education going to give half year contracts and hope for the best? Human service groups (who might have 2-3 months in the bank) going to decide which programs continue while moving back to 8 month payments? Some local providers by me (with over 100 FTEs) are seeing $400,000-$500,000 insurance costs kicking starting Jan 1. Easy to talk about state layoff notices, but the vast majority of services are done at the local community provider/school level. And the hundreds of thousands of people they deal with will go where when the bucks stop? And those same local providers will surely get a free banking pass for mortgages and loans for salary payments right?


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