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Quinn signs millionaire’s tax referendum

Tuesday, Jul 29, 2014

* From a press release…

Governor Pat Quinn today signed legislation that will give Illinois residents the opportunity to voice their opinion on whether millionaires should pay a little more to help ensure all students have access to a high-quality education. The legislation establishes a statewide advisory referendum on the November 4 ballot to ask voters if they favor a surcharge paid by the state’s wealthiest individuals to provide much-needed funding for public education in classrooms across Illinois. Today’s action is part of Governor Quinn’s commitment to delivering stronger education in Illinois.

“Our democracy is strongest when more voters make their voices heard about important matters of public policy,” Governor Quinn said. “Illinois voters will now be able to have their say when it comes to whether the state’s most fortunate should pay a little more to put more resources in our classrooms. An investment in education is the best investment we can make for our economic future.”

House Bill 3816, sponsored by Illinois House Speaker Michael Madigan (D-Chicago) and State Senator Michael Noland (D-Elgin), creates a Nov. 4, 2014 advisory referendum to ask voters whether the Illinois Constitution should be amended to require that each school district receive additional revenue, based on their number of students, from an additional three percent tax on income greater than one million dollars. These resources would be directed towards classroom education. The legislation is effective immediately.

The Illinois Department of Revenue estimates that a three percent tax on income greater than $1 million would generate approximately $1 billion annually for elementary and secondary education. The Governor signed the legislation today at Irving Elementary School in Berwyn.

“This legislation will provide an important benchmark. Illinois is long overdue for tax fairness and a much needed boost for our school children,” Speaker Madigan said.

Governor Quinn is committed to properly funding education in Illinois in order to give every child the opportunity for success. The Governor’s 5-year budget blueprint includes an historic $6 billion increase in classroom spending over the next five years, doubling the investment in college scholarships for students in need and increasing access to higher education through dual enrollment and early college programs. Over the next five years, the Governor’s plan would bring classroom funding to the highest levels in Illinois history.

- Posted by Rich Miller        


45 Comments
  1. - LincolnLounger - Tuesday, Jul 29, 14 @ 12:02 pm:

    Gee, I’m on the edge of my seat about this. I wonder how it will turn out?

    Ridiculous.


  2. - Curious - Tuesday, Jul 29, 14 @ 12:03 pm:

    Unless there’s some kind of campaign effort from the Governor’s team or outside groups, I don’t think this moves the turnout needle that much. It could, but not without some effort.


  3. - Gooner - Tuesday, Jul 29, 14 @ 12:03 pm:

    Rather than putting stuff like this on the ballot, why not just sell add space on it?

    Both have the same purpose.


  4. - wordslinger - Tuesday, Jul 29, 14 @ 12:05 pm:

    I don’t see an advisory referendum driving turnout. I guess it’s easy enough to put it on the ballot.


  5. - Adam Smith - Tuesday, Jul 29, 14 @ 12:05 pm:

    Well, here’s the “fairy dust” Quinn backers have been calling for him to unleash against Rauner. Bet they’re quaking in their boots at Rauner HQ.


  6. - anonymous - Tuesday, Jul 29, 14 @ 12:08 pm:

    what are the chances the extra $ will actually GO to classrooms? Wasn’t that what the lottery was for?


  7. - Raising Kane - Tuesday, Jul 29, 14 @ 12:08 pm:

    I would like to get myself all worked up about how horrible this is going to be for the GOP but all I can do is yawn.


  8. - Skeptic - Tuesday, Jul 29, 14 @ 12:11 pm:

    anon @ 12:08 The Lottery money *does* go to schools. The problem was that instead of adding the lottery money to the GRF money already allocated, they replaced it and spent the GRF money on something else.


  9. - Robert the Bruce - Tuesday, Jul 29, 14 @ 12:12 pm:

    Raising someone else’s taxes to help pay for education? Sounds good politically.

    Bringing our highest tax rate more in line with other states? Sounds good economically.

    Another worthwhile stunt.


  10. - Ron Burgundy - Tuesday, Jul 29, 14 @ 12:14 pm:

    I’d be more impressed if the gutless wonders would just go ahead and pass it before the election if they want it so badly. An advisory referendum with a pre-determined outcome is nothing but a political stunt and cover for when they pass it later.


  11. - dupage dan - Tuesday, Jul 29, 14 @ 12:19 pm:

    What I appreciate about this governor is that he does his own stunts. I have never seen a stunt double standing in. Kudos!


  12. - Anon. - Tuesday, Jul 29, 14 @ 12:20 pm:

    ==what are the chances the extra $ will actually GO to classrooms?==

    It will say so in the constitution, which our beloved governor and legislators hold as sacrosanct.


  13. - Anon - Tuesday, Jul 29, 14 @ 12:20 pm:

    I thought the temporary 2010 income tax increase was supposed to go toward education? Where did all those billions go? Certainly not to schools. I wish politicians would stop using the critical issue of education as a political prop.


  14. - CircularFiringSquad - Tuesday, Jul 29, 14 @ 12:27 pm:

    it will provide a daily opportunity for candidates to remind voters of the issue and for Flip to be against, for it and double cross all the other GOPies. Should be fun


  15. - OneMan - Tuesday, Jul 29, 14 @ 12:27 pm:

    Reminded a few years back when I was down in Springfield with a gifted ed group and someone from Quinn’s office came to speak to us.

    Some of the parents of the gifted kids had the exact same questions about the lottery…

    The problem with this as a vote driver is in part, it kind of puts the whole idea of ‘well they said X was going to be used for education’ at front of mind as well…

    The state has a trust issue and I am not sure what the solution is.


  16. - RMW Stanford - Tuesday, Jul 29, 14 @ 12:29 pm:

    The scholarship are good, as our dual enrollment programs, but the problems with the K-12 system in general go far beyond just money and throwing more cash into the system is not going to fix a lot of the problems.


  17. - Rich Miller - Tuesday, Jul 29, 14 @ 12:34 pm:

    ===Where did all those billions go? Certainly not to schools. ===

    Lots of money went to school districts in the form of state pension payments on their behalf. Billions and billions, in fact.


  18. - Yellow Dog Democrat - Tuesday, Jul 29, 14 @ 12:42 pm:

    Nowhere in the release does Quinn say he actually favors the millionaire’s tax.

    Huh?

    So, you feel like Rauner feels about Marriage Equality?

    I’m cool with whatever the voters want?

    hUH??

    How about, “In contrast, Bruce Rauner says he wants millionaires to receive a $600 million a year tax cut while coincidentally raising sales taxes by $600 million a year on small businesses and middle class families.”

    Food for thought.


  19. - Anon - Tuesday, Jul 29, 14 @ 12:42 pm:

    same anon here Rich:

    yeah, but how is that helping our state’s education? I meant it didn’t go to schools in the form of textbooks, improvements, etc.


  20. - Rich Miller - Tuesday, Jul 29, 14 @ 12:44 pm:

    ===yeah, but===

    You asked, I answered. He paid the pension bill, which hadn’t been paid in a very long time. He does deserve credit for that much.

    Also, if you think there are magic beans out there which would allow Illinois to not make the pension payments and spend lots of money on other fun stuff, please let us all know where we can get some. Please.


  21. - wordslinger - Tuesday, Jul 29, 14 @ 12:48 pm:

    Charlie Wheeler on many occasions here has pointed out the fact that the lottery was originally intended to get the RTA up and rolling. He literally wrote the story on it in the Sun-Times when it passed.

    But it is a universal article of faith among young and old from Chicago to Cairo that it’s some kind of shell game for education funding.


  22. - PublicServant - Tuesday, Jul 29, 14 @ 12:48 pm:

    ===He paid the pension bill===

    Of which, 80% was debt repayment. That’s the whole picture Rich. Gotta repay the debt, pension, or otherwise.


  23. - Anon - Tuesday, Jul 29, 14 @ 12:58 pm:

    Rauner is not opposed to advisory referendums on principle since he proposed one on same-sex marriage.


  24. - lake county democrat - Tuesday, Jul 29, 14 @ 1:07 pm:

    –“Our democracy is strongest when more voters make their voices heard about important matters of public policy. Illinois voters will now be able to have their say…”

    But they are NOT allowed to have their say on term limits, gerrymandering, the benefits clause of the state constitution, etc.

    Governor Quinn, the self-proclaimed weak democracy candidate.


  25. - Michelle Flaherty - Tuesday, Jul 29, 14 @ 1:08 pm:

    Pension funding once was included in the state’s education budget until the pension numbers began to go way up and the regular education funding numbers didn’t. If it was still rolled together, the state has increased education funding by billions.


  26. - anon - Tuesday, Jul 29, 14 @ 1:08 pm:

    Pensions are every bit as integral to education funding as bricks and mortar, textbooks, and teacher salaries. Can we stop pretending that services can be provided with no labor costs?


  27. - OneMan - Tuesday, Jul 29, 14 @ 1:21 pm:

    == Pensions are every bit as integral to education funding as bricks and mortar, textbooks, and teacher salaries. Can we stop pretending that services can be provided with no labor costs? ==

    Agreed, however if I keep my spending constant on those things or just grow them at the rate of inflation I can spend school money on other stuff.


  28. - PublicServant - Tuesday, Jul 29, 14 @ 1:30 pm:

    Oneman, you do realize that you can’t grow pension debt repayment at the rate of inflation if the pension ramp law specifies otherwise right?


  29. - Phenomynous - Tuesday, Jul 29, 14 @ 1:33 pm:

    ===Where did all those billions go? Certainly not to schools. ===

    -Lots of money went to school districts in the form of state pension payments on their behalf. Billions and billions, in fact.-

    The Normal Cost of TRS was $1.58 billion in FY14, which has grown modestly over the years and was an established cost to the state.

    I don’t think it is fair to say that the 2010 tax increase went to education, when it clearly went to pension cost due to unfunded liability (which is the GA’s own doing).

    The “temporary” tax increase got us over the most recent ramp in pension payments and managed hold the proration of GSA at around 90%. Without that revenue that sand castle will crumble.

    That being said, all those who sold the tax as temporary will have to pay the political price. Next time, try being honest with the people.


  30. - anon - Tuesday, Jul 29, 14 @ 1:42 pm:

    “I don’t think it is fair to say that the 2010 tax increase went to education, when it clearly went to pension cost due to unfunded liability (which is the GA’s own doing). ” Again, do you think you can run an education system without paying teachers any compensation including retirement? To say that pension payments are not payments for education is just blaming and demonizing the teachers. Pretending there is a difference is exactly how the underfunding was justified in the first place.


  31. - Precinct Captain - Tuesday, Jul 29, 14 @ 1:52 pm:

    ==- lake county democrat - Tuesday, Jul 29, 14 @ 1:07 pm:==

    In case you didn’t know, the state constiution is voters having their say. They also rejected a constitutional convention not that long ago. Maybe Rauner should’ve supported a constitutional convention instead of a solely cynical, self-serving name gathering attempt called “term limits and reform.”


  32. - VanillaMan - Tuesday, Jul 29, 14 @ 1:54 pm:

    By looking at the comments, I’d say it is a loser. It seems a lot of folks are too cynical to believe the money will go to education.

    He should have said the money collected would go to anti-violence grants in South Cook county.


  33. - Phenomynous - Tuesday, Jul 29, 14 @ 1:56 pm:

    anon,

    There is a big difference in the Normal Cost of pensions and payments on the unfunded liability. Additionally, it should be taken into consideration who is help liable of each portion of the payment.

    The temporary tax increase mostly paid for the unfunded liability do to underfunding and pension holidays. These are the result of failed leadership on the part of the GA and should not qualify as education funding.

    The Normal Cost of pensions has been an established cost of the state with only modest growth. Arguments can, have been, and will be made about who should pay the normal cost of pensions (see cost shift).

    No matter how you slice it, it is a difficult argument to make that the tax increase went to fund education. It went to find mismanagement and ineffective governing. And it doesn’t look like it will be temporary either.


  34. - Downstate - Tuesday, Jul 29, 14 @ 2:01 pm:

    (sorry about misposting)

    I assume ballot question is at the end of the ballot and not the beginning. Does placement, even in relation to other initiatives, make a difference on this or the Gov’s race?


  35. - OneMan - Tuesday, Jul 29, 14 @ 2:28 pm:

    PublicServant…

    Sorry I wasn’t clear.

    Basically what I am saying is do not increase wages, use the money for the pension shortfall.

    Too often spend more on schools means spend more on salaries of existing staff. Curious how the unions would feel about increased spending that didn’t directly or indirectly go to their members.


  36. - walker - Tuesday, Jul 29, 14 @ 2:42 pm:

    The first person I ever heard claim that this tax increase was primarily to “go to education,” was a Republican Senator, weeks after the vote. If anyone claimed it that day, I missed it. Now, like the Lottery, some believe in the myth.

    The same person will now claim “we were told it was to pay down outstanding bills” or it was to “keep our service institutions open.” All are post facto ways to complain about its failure to meet some promise, tailored to the audience.

    In real time, it was proposed to gain ground on balancing the budget and reducing debt over time — and impacted all the cost areas in the budget — while keeping up with the ramped up pension obligations.


  37. - walker - Tuesday, Jul 29, 14 @ 2:46 pm:

    These kinds of misuse of the ballot, turn my stomach.


  38. - anon - Tuesday, Jul 29, 14 @ 2:53 pm:

    So would you characterize money spent on maintaining a building already built as not being spent for education? How about heating costs? Repairing the roof? Sure, the proportion going today to the pensions is more than it should have been had the payments been regularly made in due course in the past but fundamentally pensions are no different than paying now for deferred maintenance of physical property. To claim that it isn’t really for education is false.


  39. - zatoichi - Tuesday, Jul 29, 14 @ 3:22 pm:

    To hit that $1B target you need $33B in revenue from people earning over the $1M mark. Thought these people were all leaving the state.


  40. - RNUG - Tuesday, Jul 29, 14 @ 3:48 pm:

    Here’s the bottom line on the temp tax increase:

    Had it not been passed and Quinn continued to make the pension fund payments as specificed by the “ramp”, then all more or less discretionary State spending would have had to be cut by the amount of the shortfall of the State budget every year … and one of the biggest components of that “discretionary” spending is educaiton. Even with the temp increase, most areas of State government took around a 23% cut over the past couple of years. The money either got spent mostly on funding the TRS & SURS pension systems or it got spent on funding schools under TRS & SURS … so yeah, education did get a lot of the temp tax money, it just depends on how you want to label it.


  41. - Phenomynous - Tuesday, Jul 29, 14 @ 8:00 pm:

    RNUG,

    Say I had a car payment and a house payment on a balloon schedule. You are arguing that, if the balloon payment coincided with a recent pay raise, then that pay raise would theoretically be funding my car instead of my higher house payment?

    I don’t know, the stronger argument would be that the raise was being dedicated to the balloon (i.e. Pension payment)


  42. - Yellow Dog Democrat - Tuesday, Jul 29, 14 @ 8:14 pm:

    @zatoichi:

    If I recall, the tax would impact around 11,000 or 12,000 households.

    A few have the last name “Pritzker.”

    One is a “Madigan.”

    Wirtz.

    How many professional athletes? Quinn needs Derrick Rose on the stump.


  43. - facts are stubborn things - Wednesday, Jul 30, 14 @ 8:58 am:

    without the temp tax increase, assuming the pension payment and other legally required payments were made, the budget as RNUG points out would have been cut severely. You need revenue to operate state government at the level of services that are either required and or desired. Spending the pension dollars for many years has delayed the reality that to be a blue state you need blue revenue. Shamefully the people of Illinois, through our republic form of government, would rather take money from a constitutionally protected pension benefit in order to illegally diminish pensions to put some of the money back. There is no free lunch! Pay higher taxes or cut discretionary spending. You don’t “grow” your way out of this, the numbers just don’t work.


  44. - facts are stubborn things - Wednesday, Jul 30, 14 @ 9:01 am:

    The tax increase was sold and in fact was and is temporary. State tax will go from 5% to 3.75% (a .75% permanent increase) unless a new law is passed. It is a separate issue as to what if any tax increases will be voted on in the future.


  45. - Anon - Thursday, Aug 7, 14 @ 1:46 pm:

    But we don’t tax wealth; we tax income. The wealthy can easily minimize their taxable income, and they can also easily establish residency in a low-tax state.


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