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*** UPDATED x2 *** Question of the day - WITHDRAWN

Monday, Jul 21, 2014

*** UPDATE 1 *** The Rauner folks just found some new audio of Quinn debating Democratic primary opponent Dan Hynes in January of 2010, months after Quinn testified on that Senate bill. Here’s what Quinn said about the Senate’s revenue bill that included the new service tax

Transcript…

Quinn: “Rev. Sen. Meeks, who’s my friend and who’s supporting me, feels the same way I do and he got a bill passed through the Illinois Senate that I support and I testified for it in the Illinois House… We don’t forget people in need. If they need education, then we invest in it. And I think the only way to do it is to do it the right way, the way Sen. Meeks has proposed… I called up Mike Madigan that night, one minute after Rev. Meeks got that bill passed, and I said ‘Mike, how about tomorrow let’s go vote for that’ and he said ‘No.’ But I went and testified for it for two hours with David Miller.”

I’m tempted to withdraw the question. Your thoughts?

*** UPDATE 2 *** I’ve given it some thought and I’m withdrawing the question. Quinn obviously worked to pass this bill, which included a service tax, then months later touted his support for the bill.

[ *** End Of Updates *** ]

* From the AP

Republican gubernatorial candidate Bruce Rauner said Thursday he wants to lower Illinois’ income tax rate, freeze property taxes and impose a new sales tax on some services, a plan he said would help improve the economy and grow jobs but that Gov. Pat Quinn dismissed as “a dumb idea.” […]

“This is a dumb idea and I don’t believe people in Illinois are going to buy it whatsoever,” the Chicago Democrat said […]

[Rauner’s] campaign also raised an eyebrow at Quinn’s criticism, saying the governor testified in favor of a 2009 budget proposal that included a tax on services, including dry cleaning. But Quinn spokeswoman Brooke Anderson said that testimony was part of budget negotiations. The governor only favored part of the proposal, and not the tax on services, she said.

The Rauner campaign is doing its level best to connect Quinn to Rauner’s service sales tax proposal. But Quinn’s campaign has pushed back hard against this notion that Quinn testified on behalf of the service tax, and they point to his budget address this year, during which he forcefully opposed a service tax. Quinn likely did so because Rauner long ago signaled that he was open to the tax.

* Gov. Quinn was asked specifically about the service tax during that 2009 testimony. This audio was sent to me on background

Transcript…

Question: “Governor, there’s…we’ve had conversations talking about Illinois’ competitiveness and I know you’re concerned about that issue. But, raising taxes…income tax, and sales tax the way this bill does, what is that going to do to our competitiveness?

Quinn: “Well, I think our biggest problem when you talk about taxation and business job creation is the property tax system. We have to address that. The Illinois property tax system is antiquated, it was written in the 19th century, it’s hundreds of pages long. This is an opportunity to address property taxes and reforming them, and reducing them. I think that we have to deal with that if we want to have a good job climate and that to me is one of the features of this bill that is a very good one. It is a strong effort to get the state of Illinois pay at least half the cost of education and to reduce the property tax burden on families and businesses.”

* Brooke Anderson’s complete response, slightly edited for style…

The Governor clearly stated his position on service tax this year in his budget address.

Re 2009, the bill HB 174 was based on a long-standing proposal known as SB 750. Among key components, the bill did the following, all of which the Governor has long supported:

    -raised the income tax from 3-5%
    -provided signficcant new property tax relief
    -provided an increase in the personal exemption
    -increased the earned income tax credit

At the time, this was the last day of session and it was a comprehensive package designed to address the State’s fiscal challenges, avert the cliff and impending bond downgrades, and to reduce reliance on property taxes for funding eduction, one of the Governor’s top priorities– it was also the vehicle for revenue and a work in progress like so many things in Springfield. This is pretty obvious when you watch the clips.

The sales tax to services piece was a minor component and advocated by Senate Democrats - not the Governor- the above-listed were the key parts and sought by the Governor

When asked if he supports the bill in Q&A, the Governor says it is worthy of debate and stresses the need to reduce property taxes and balance the budget. He urges consideration and further dialogue.

The clip rauner’s camp sent is consistent with all this - the Governor makes no reference to sales taxes on services and clearly speaks to the need to reduce property taxes. Also I can’t even confirm it’s from the same committee hearing where the Governor testified because there are no details available, date, etc. - just sketchy freeze frame & audio.

Here’s more video:

* The Question: Is this a fair hit by Quinn on Rauner’s “dumb” plan, or is it a fair retort by Rauner that Quinn supported a similar “dumb” plan, or is it both or is it neither? Withdrawn.

- Posted by Rich Miller        


27 Comments
  1. - Pete - Monday, Jul 21, 14 @ 12:54 pm:

    Service tax has been floating around since before Blago left office.

    Rauner camp is starting to provide voters with a picture of the what shaking up Springfield is going to look like. Today it’s Quinn saying it’s a dumb idea, then next year it will be Madigan. There is no easy fix, but the current administration hasn’t pushed any new ideas.

    Quinn had his chance when elected with his mandate. There has been absolutely zero reform in education tied to the property tax. If that was Quinn’s goal, it should have been a monthly press release showing the steps taken to fix that out dated funding system.

    We’ve seen Quinn doing several press releases associated with trying to create training programs for transportation projects.

    Quinn missed his window on pro-active government.
    Everything now is reactive. For that reason I voted a fair retort by Rauner.


  2. - Anon. - Monday, Jul 21, 14 @ 1:05 pm:

    I voted “fair retort by Rauner,” but on reconsideration, Quinn’s indorsement of the service tax is pretty good evidence that it was a dumb idea, so I should have voted “both fair.” (snark)


  3. - Adam Smith - Monday, Jul 21, 14 @ 1:10 pm:

    Quinn has one idea, and one idea alone, for fixing the disaster he has helped make…raise income taxes as much as possible and use the proceeds to spend more money as dictated by the public employee unions and other Democratic sponsors.

    If that isn’t the gold standard for “dumb” public policy, I don’t know what is.

    Again, Quinn is flailing for anything at all that will distract from an assessment of his performance and the resulting fiscal catastrophe.


  4. - Adam Smith - Monday, Jul 21, 14 @ 1:12 pm:

    Wow. Seems like he not only approved of the idea, he actively lobbied the Speaker for a vote on it.

    It’s a real sign of desperation when you can’t even keep you lies straight…


  5. - CircularFiringSquad - Monday, Jul 21, 14 @ 1:21 pm:

    The real news continues to be Mitt’s decision to fall for the bluff and announce he will keep the tax hike in place for at least 4 years. This is the exact opposite of what he told WhackyJack (RIP) and all the other whack jobs. The fact he wants to add the +$650 million in new sales tax is less important that the total flip on taxes


  6. - Bill White - Monday, Jul 21, 14 @ 1:24 pm:

    http://articles.chicagotribune.com/2011-10-27/opinion/ct-oped-1027-tax-20111027_1_sales-tax-untaxed-services-service-tax

    == The National Federation of Independent Business opposes this proposed tax and so do the vast majority of small businesses owners in Illinois. In a 2009 NFIB/Illinois survey, 82 percent opposed the idea of a service tax even if the overall sales tax rate were to be reduced. Why? Small business owners make up a large part of the service sector and are on the firing lines when consumers want to know why their dry cleaning is 9 percent higher than normal. And small business owners are also big consumers of services as they often rely on vendors for help in their operations. ==


  7. - Bring Back Boone's - Monday, Jul 21, 14 @ 1:24 pm:

    All is fair in love and war. But Rauner should be focusing on the fact that PQ has raised income taxes, is advocating a permanent increase, and is thus killing jobs.

    This is a clearer message than who is for raising what tax and in what circumstance. Campaign sidetrack in my opinion.


  8. - Bill White - Monday, Jul 21, 14 @ 1:28 pm:

    Anyways, I voted “neither fair” as both Quinn and Rauner are wandering around in Meta-meta-land spreading talking points rather than real solutions.

    It’s like the game “telephone” - by the time we get through all the layers of Quinn said this about what Rauner said about Quinn, we lose track of what is really at issue.


  9. - CircularFiringSquad - Monday, Jul 21, 14 @ 1:36 pm:

    mr/Ms BW small business oppose the tax because they would need to keep some records and file some forms…We guess somewhere around zero % of the population could tell you if they pay sales tax on dry cleaning today. Most — nearly all — think there is a sales tax on food and medicine
    Mitt is smart to create the diversion because the next round is how he completely flipped on the income tax and lied during the primary


  10. - The more things change - Monday, Jul 21, 14 @ 1:39 pm:

    “The sales tax to services piece was a minor component?” Outside the tax hike, that was, like, the crux of the bill! Attack him for his lack of support in the past, not his current support. Attack the fact that this “”new” plan to “balance the budget” is going to end public education in Illinois as we know it. Not every Rauner claim has to be litigated in the press…this is amateur hour!


  11. - Easy - Monday, Jul 21, 14 @ 1:49 pm:

    Let’s get Sen. Frerichs on the phone, he sponsored the bill, and find out exactly how close he worked with Quinn on the proposal. That might unravel this mystery.


  12. - anon - Monday, Jul 21, 14 @ 1:52 pm:

    What do you mean by withdrawn? Are you saying you the issue is legitimate or not legitimate?


  13. - RNUG - Monday, Jul 21, 14 @ 1:59 pm:

    - CircularFiringSquad - Monday, Jul 21, 14 @ 1:36 pm:

    Actually, there IS a sales tax of 1% on most edible items at the grocery store.


  14. - Bill White - Monday, Jul 21, 14 @ 1:59 pm:

    @CFS

    Creating a diversion in July hardly seems helpful to Rauner.

    After Labor Day, Rauner’s platform plainly will be to raise the income tax back to 5% so they can phase it out over 4 years (maybe) AND impose a services tax on top of that.

    Kinda pulls the rug out from under GOP IL House and GOP IL Senate candidates who wanted to campaign on voting against extending the 5% tax rate.


  15. - Rich Miller - Monday, Jul 21, 14 @ 2:04 pm:

    ===there IS a sales tax of 1%===

    Yep. Local share.


  16. - Just the Facts - Monday, Jul 21, 14 @ 2:06 pm:

    @Circular - there is a sales tax on food and medicine, albeit at a lower rate. It ranges from 1% in areas outside of the RTA to 2.25% in Chicago. Also, dry cleaning doesn’t appear to be included in the list of services Rauner proposes to tax.

    Also interesting is that legal services are proposed for taxation, but accounting is not.

    Sewer and trash services are proposed for tax. That would hit everyone.

    Personal property rentals are proposed for tax - that would be more of a timing issue than new money. Currently, someone who leases personal property owes sales tax up front when he buys something to be rented and the lease payments aren’t taxed. This proposal to tax personal property leases would likely end the up front taxation and tax the lease stream. So it wouldn’t be new money and in the first year or two it would be a negative number. Plus, Rauner’s numbers are 2011 numbers which likely include automobiles. Legislation passed this session would already change all automobile leases to being taxed on the lease stream effective January 1, 2015.

    Printing is also currently subject to tax under the service occupation tax. So the “new” money under the proposal would be offset by the tax no longer due under the current tax scheme.

    Somebody in the Rauner campaign might also want to look at Florida’s experience of 20 years ago when that state passed legislation to tax advertising services - it wasn’t pretty . . . .


  17. - Rich Miller - Monday, Jul 21, 14 @ 2:09 pm:

    ===it wasn’t pretty===

    Yeah. Brutal. Most vicious fight ever.


  18. - jake - Monday, Jul 21, 14 @ 2:09 pm:

    Neither of these guys is saying anything worth listening to, The individual voter is left to look at the general philosophy of government that each espouses and their history, and then evaluate them based on the voter’s own philosophy of government. As somebody who is left of center in today’s political spectrum in Illinois (for example a supporter of a progressive income tax) I will resignedly vote for Quinn, but I have no expectation that he will ever be an effective advocate for my political beliefs.


  19. - OneMan - Monday, Jul 21, 14 @ 2:16 pm:

    Small business owners make up a large part of the service sector and are on the firing lines when consumers want to know why their dry cleaning is 9 percent higher than normal. And small business owners are also big consumers of services as they often rely on vendors for help in their operations.

    Don’t see dry cleaning in Rauner’s list.


  20. - walker - Monday, Jul 21, 14 @ 2:39 pm:

    They agree on more than they are willing to publicly acknowledge during a campaign.


  21. - Bill White - Monday, Jul 21, 14 @ 2:41 pm:

    As it is sometimes difficult to decipher what Governor Quinn says, I propose to translate:

    == “This is a dumb idea and I don’t believe people in Illinois are going to buy it whatsoever,” the Chicago Democrat said […] ==

    which means,

    == “Look, I tried this a few years ago and got my hat handed to me by the General Assembly. I thought is was a good idea. I was wrong.”

    Or on term limits . . .

    “Back in the day, I tried to get term limits on the ballot and the Illinois Supreme Court handed me my hat on that one. Sometimes you just need to live and learn.”


  22. - OneMan - Monday, Jul 21, 14 @ 2:53 pm:

    Rev. Sen. Meeks, who’s my friend and who’s supporting me

    Perhaps it is the tax plan Rev Meeks likes…


  23. - Yellow Dog Democrat - Monday, Jul 21, 14 @ 3:17 pm:

    Look, the Rauner proposal is essentially Martire Light, which is another way of saying “Meeks Light.”

    Whether you like it or not depends on whether you view it as a final proposal or the beginning of a negotiation. Basically, you see Rauner’s plan accepting four philosophical components:

    1. some cuts will be necessary
    2. Additional income tax revenue will be needed, at least for a time
    3. Additional sales tax revenue will be needed indefinitely
    4. Property tax relief is needed

    I will say, there is some hypocrisy in his property tax freeze. There is no referendum required to enact the ” Rauner tax.”


  24. - Soccermom - Monday, Jul 21, 14 @ 3:26 pm:

    Okay. In some circles, I am renowned for my ability to bore entire dinner tables to tears by discussing the finer points of fiscal policy. Yet I find myself struggling to understand who said what when about which tax and why.

    Rauner’s plan doesn’t add up. Math. Boom. His selection of which services to tax seems to have based on a principle as old as the Bible — pin a list of services to the wall and then throw darts at it..

    I understand that it’s July and people aren’t paying any attention. But Rauner just came out with a budget plan that is BILLIONS of dollars out of whack. i guess the guy knows how to keep track of his own money — it’s your cash that he has trouble with…


  25. - tberry - Monday, Jul 21, 14 @ 3:31 pm:

    If you don’t want to hear the answer, don’t ask the question!


  26. - Chicago Cynic - Monday, Jul 21, 14 @ 3:55 pm:

    Soccermom, it’s not a budget plan. It’s a tax plan. And it’s not really a tax plan since we can only infer what he proposes to do about the income tax. But you’re absolutely right - it’s just math and so far, Rauner’s flunking math.


  27. - Yellow Dog Democrat - Monday, Jul 21, 14 @ 6:21 pm:

    Cynic- it ain’t hard to figure out what happens to the income tax rate:

    2015 - 5%
    2016 - 4.5%
    2017 - 4%
    2018 - 3.5%

    Then, in 2019, as Rauner’s term ends, the rate drops to 3% as promised.


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* *** UPDATED x1 - Frerichs response *** Former Democratic state treasurer endorses Cross - Cites bipartisanship, Israel bonds as reasons
* Prison reform group responds to new Rauner ad
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