53 Comments - Anon221 - Wednesday, Feb 10, 16 @ 8:49 am: Could have, should have, would have… What about the NOW??? The deflections, as well as fun ‘n games with statistics, just keep comin’ as we near Feb 17th. - jim - Wednesday, Feb 10, 16 @ 8:51 am: since it’s speculation based on ‘what ifs,’ it’s impossible to be sure. but he’s close enough to make an important point — whether people want to admit it or not — and many don’t — Illinois has been badly served for years by its policymakers - Anonymous - Wednesday, Feb 10, 16 @ 8:53 am: The legacy of decades of mismanagement and inefficiency lives on. These fiscal problems and policy flaws have been compounding for many years. - Anonymous - Wednesday, Feb 10, 16 @ 8:54 am: IF - Oswego Willy - Wednesday, Feb 10, 16 @ 8:55 am: ===…no budget crisis and more resources for schools, Medicaid and social service providers.=== As a sidebar, while revenues and the math here is going through a “look-see”, this premise that this year’s budget crisis is based solely on the numbers of growth missed in the passed is pretty disingenuous. This year’s budget crisis is a choice. That’s what makes that sneaky line arguably disingenuous to what the numbers could show. - There is power in a union... - Wednesday, Feb 10, 16 @ 8:55 am: *or as they say - AlabamaShake - Wednesday, Feb 10, 16 @ 8:56 am: Wasn’t the income tax hike supposed to bring in about $6.5B a year? So over 4 years that would be $26B (over 4 years) which is well more than Rauner’s $19B in additional revenue (over 15 years). - There is power in a union... - Wednesday, Feb 10, 16 @ 8:57 am: “If only we had made all the pension payments.” - There is power in a union... - Wednesday, Feb 10, 16 @ 8:58 am: “If I had only not demanded that the tax hike expire.” - There is power in a union... - Wednesday, Feb 10, 16 @ 8:59 am: “If only I had submitted a balanced budget…” - Anonymous - Wednesday, Feb 10, 16 @ 9:04 am: The implied message, of course, is that Illinois has been an unpopular state for business and that is the reason for not following the national trend. There is no evidence to support the premise that if we had done more “pro business” legislation that anything would be different. This is just useless hyperbole. Dream on - illini97 - Wednesday, Feb 10, 16 @ 9:04 am: Does the $19B factor in that increased growth generally also puts increased demand on services and infrastructure? I’m well aware that increased growth is desirable and a great goal for our State legislators, but to claim that 100% of that growth would have been captured with 0 additional expenditures is a bit rosy, isn’t it. Regardless, as others have pointed out, it isn’t 2000 now. It’s 2016, almost time to see the FY2017 budget. But we don’t have a FY2016 budget. Let’s work on that, shall we? Otherwise, in 2030, we can be here pining for the lost opportunities of 2016. - Trolling Troll - Wednesday, Feb 10, 16 @ 9:07 am: Anyone else tired of this blame game? Please take out the poison pills and pass a budget. Or at least have the huevos to tell the citizens of Illinois what you think is not worthy of tax dollars. This passive aggressive stance makes you look like a coward. - RetiredStateEmployee - Wednesday, Feb 10, 16 @ 9:12 am: So the best that Rauner and the superstars can come up with is it’s someone else at fault and we can’t fix that. - allknowingmasterofracoondom - Wednesday, Feb 10, 16 @ 9:13 am: illini97 - The point is that if we continue to behave the way we have since 2000, we will have the same or similar results. It is indisputable that the policies in both spending and revenue in this state have caused the current situation. S**t gotta change, tax increase or no tax increase. That is the message in my opinion. - Be Careful Out There - Wednesday, Feb 10, 16 @ 9:13 am: –Anyone else tired of this blame game? Please take out the poison pills and pass a budget. Or at least have the huevos to tell the citizens of Illinois what you think is not worthy of tax dollars. This passive aggressive stance makes you look like a coward.” – Gosh, TT, you really think Mike Madigan is solely responsible for this impasse? - Earnest - Wednesday, Feb 10, 16 @ 9:14 am: Wow, for a minute this distracted me from his wholesale destruction of our human service and higher education systems, plus punishment of other state vendors. I don’t consider his statement worth the doing of the math and taking our eyes off the sacrifices (as we now understand, they were never “hostages”). - Mouthy - Wednesday, Feb 10, 16 @ 9:14 am: Yup, if all those ifs had come to pass we’d have no Rauner either… - Daniel Plainview - Wednesday, Feb 10, 16 @ 9:18 am: Mike Madigan and the global recession he controlled… - Langhorne - Wednesday, Feb 10, 16 @ 9:24 am: If only……madigan wasnt speaker, and republicans were in the majority in both chambers. If only…..mike ditka was mayor of chicago “Its unconsionable we dont have a budget eight months into the year”….. If only we had elected dillard, we would have a governor - Trolling Troll - Wednesday, Feb 10, 16 @ 9:25 am: Be Careful- Ha!! You can use it anyway you want to spin it. I’m a conservative non-tea bagger who is sick of the middle class paying for the spoils of political wars. I used to call myself a republican but I no longer recognize that party. - Union Man - Wednesday, Feb 10, 16 @ 9:25 am: http://www.multpl.com/us-gdp-growth-rate/table/by-year Those figures don’t show an average GDP growth rate of 6%, more like 4+% - Chicago 20 - Wednesday, Feb 10, 16 @ 9:33 am: So is Rauner suggesting an Illinois GDP tax? - illini97 - Wednesday, Feb 10, 16 @ 9:34 am: - allknowingmasterofracoondom - I think everyone is in favor of growing the State economy and being “pro-business” We have differences on what “pro-business” means. For example, Rauner believes everything gets better if unions are decimated. Others believe that is not the way to go. Further, as has been pointed out, the numbers have been sparse and light on details. The case for the Turnaround Agenda just hasn’t been well articulated or factually supported, in my opinion. - Mama - Wednesday, Feb 10, 16 @ 9:39 am: Which states grew at the national average for a year? Do those states have higher taxes revenues than IL? - Beaner - Wednesday, Feb 10, 16 @ 9:44 am: Dear MuniBond Salesman Rauner, We’d like to see your work. Please provide a spreadsheet complete with links to source material. Just sayin’, is just sayin’. And given past experience, we just don’t trust what you say. - Chicago 20 - Wednesday, Feb 10, 16 @ 9:45 am: All this is illustrating is that individual incomes, taxable spending and reported taxable corporate incomes didn’t increase as compared to the GDP. All Rauner needs to do is increase individual incomes, increase consumer spending and somehow find a way for Illinois corporations to pay more corporate income tax to the State. - Chicago 20 - Wednesday, Feb 10, 16 @ 10:24 am: Rauner may be on to something here, income inequality reduced tax revenues. Median household income dropped 11% since 2000 while the GDP grew. If Rauner fixes that most of our problems would fix themselves. http://robertreich.org/post/98668011635 “Median household income is now 8 percent below what it was in 2007, adjusted for inflation. It’s 11 percent below its level in 2000.” - 47th Ward - Wednesday, Feb 10, 16 @ 10:27 am: I think this also assumes zero growth in state expenses since 2000. That’s probably why our neighboring states have also needed more revenue beyond natural growth. If we could just roll back expenses to 2000 levels and keep them there…Brilliant! - TinyDancer - Wednesday, Feb 10, 16 @ 10:29 am: If only our corporate-friendly international trade policies hadn’t decimated the state’s/country’s manufacturing base. If only corporations would stop playing one state/one city against another to avoid paying taxes. If only we had created legislation to outlaw predatory payday lenders, predatory for-profit universities, predatory car loans, and outrageous student loans maybe we would have had consumers who could have actually consumed instead of mailing all their money to the banks. If only…. - Anonymous - Wednesday, Feb 10, 16 @ 10:32 am: These people say the US GDP has been about 2% since 2000. Little off from 6.6%. http://taxfoundation.org/blog/economic-growth-has-slowed-2000 http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?page=1 - Honeybear - Wednesday, Feb 10, 16 @ 10:34 am: This sounds like Laffer curve (trickle down/supply side economics) voodoo. It’s an economic system based on a LOT of assumptions and little economic reality. Not to mention it biases towards to the top of the economic ladder. But here’s the issue I want to highlight. How do you grow revenue when politicians want to give tax rebates to corporations? Hundreds of millions of dollars went to EDGE and Enterprize Zones EACH YEAR!!!!! We didn’t have accountability then over those dollars and now with the private EDC we will have something “similar” to FOIA, ie even less accountability. Go after THAT money not squeeze it out of citizens. - zatoichi - Wednesday, Feb 10, 16 @ 10:35 am: Anony 10:32 is me. Not paying attention at the keys. - Whatever - Wednesday, Feb 10, 16 @ 10:49 am: According to the IRS statistics of income and the IDOR annual reports, Illinois income tax revenues grew a lot faster than federal income tax revenues from 2000 - 2014 and and even from 2000-2010 (to remove the effects of the rate hikes). Since our taxable income measure is tied to the federal measure, you wouldn’t expect this unless Illinois incomes were outgrowing the nationwide growth in incomes. - hisgirlfriday - Wednesday, Feb 10, 16 @ 11:08 am: was there any media coverage whatsoever of bruce’s event in bloomington yesterday? heard he was supposed to have some “town hall” event at state farm but saw zero about it in the pantagraph or even bruces twitter feed. maybe they didnt want media coverage for fear of isu protesters wanting funding somehow causing trouble? very strange. guess its another casualty of his schedule secrecy. - AC - Wednesday, Feb 10, 16 @ 11:53 am: Honeybear - the Laffer curve works, and is well supported by economic theory, it’s just that it is generally distorted by conservative think tank organizations. If you look at papers from the University of Chicago, and other well respected economists, the revenue maximizing rate appears to be in the 70% range. So, after deductions, it suggests that local, state and federal taxes, after deductions, or marginal rates, above the 70% range, would produce no additional revenue. This is an obvious problem for people supporting tax cuts as a means of increasing revenue, when taxes are already below that range. So, with the highest marginal federal rate at 39.6%, property taxes being around 6% of income at the median on a median house, sales taxes around 10% at the highest, fees being a ballpark of 1% of income, it suggests to me that state income taxes could be increased to a maximum of around 12% for the wealthiest people. That’s generous as it assumes a higher rate of consumption than is typical of most high income earners. - Levois - Wednesday, Feb 10, 16 @ 11:58 am: sometimes i wish i knew how to evaluate these numbers. - TinyDancer(FKA Sue) - Wednesday, Feb 10, 16 @ 12:08 pm: If only the government would enforce the antitrust laws and break up the monopolies. - TinyDancer(FKA Sue) - Wednesday, Feb 10, 16 @ 12:13 pm: If only vulture capitalists would stop loading their targets up with debt, firing the workers to maximize returns, and seeking government subsidies before flipping the take-overs and walking off with the cash. - illinois manufacturer - Wednesday, Feb 10, 16 @ 12:14 pm: Not enough data but we have had no population growth since then which may affect gross output but we may have lot up per capita so this could be a red herrng. But if we are so much poorer that the rest of the country why don’t we get a Medicaid reimbusement rate of 60 likeTexas? 6 billion a year Times 10 percent is 600 Million a year is 9 billion …that would help. Hello Kirk….Durbin …..Rainer…m - Ghost - Wednesday, Feb 10, 16 @ 12:43 pm: um no. gdp has been under 2% since 2010, was negative in 2008 and 2009. peaked at 3.8% in 2004 then declined until it was 1.6% in in2007 and -2.8 by 2008. it never reached 4% since 2000, and has averaged around 2%, and 2 years of almost 3% negative growth. so no, not ever. fun fact. 2014 il gdp increased 1.2%…. nonunion Wisconsin only 1% and non union Indiana a pathetic .4 tenths of a percent. and for the teally juicy part, Ohio had laws limitting unions like Rauner wants, they toosed out those laws in 2011, they also tied minimium wage to cpi. so wages go up automatically with inflation. the inion state which removed a flat minimium wage saw gpd increase 2.1. Michigan with its unions went up 1.9! Minesota who raise min wage and taxes up 1.4. oh an Missouri, who elminated unions… .9 so lets review. states without unions, lowest gdp growth in the region. states with unions, highest gdp increase. http://www.statista.com/statistics/188165/annual-gdp-growth-of-the-united-states-since-1990/ - Ghost - Wednesday, Feb 10, 16 @ 12:46 pm: unions mean wages which means spending which is good for gdp. statistically the poorest economic perfroming states in the midwest are the ones without unions. - Honeybear - Wednesday, Feb 10, 16 @ 3:16 pm: AC, I have one word for you, Kansas. Kansas is a supply side dream and look where it got them. Now I am not an economist, maybe you are. But I do dabble in understanding it. I gravitate, as I’m sure you might have guessed, more of a Keynesian. But regardless, what I see supply side as doing is starving governments of income, slaughtering the social safety net, decimating environmental protections and facilitating the transfer of wealth to the owner/investor class. Exactly what is happening to Kansas. In what state has Laffer voodoo worked? It might be well supported by economic THEORY but the economic devastation it wreaks is well supported by REALITY. Again, we only have to look as far as Kansas. - Honeybear - Wednesday, Feb 10, 16 @ 3:20 pm: Wait, AC I didn’t read your post thoroughly before I started to blast. Sorry if I misread you. It’s been a busy day and I’m running hot. Again I apologize if I just shot a friendly. - Anon - Wednesday, Feb 10, 16 @ 3:40 pm: It’s highly unlikely that Illinois or most other Midwestern states would have average GDP growth because they have slower population growth than the country as a whole. Even so, from 2000 to 2010 population growth in Illinois exceeded that in Michigan, Ohio, New York and a few other states. If Illinois population had grown at the national rate, Illinois would now have well over a million additional residents, which of course would raise governmental costs. It appears that Rauner wants to assume the revenue growth that would have come from these additional residents, without including the additional costs. - Mama - Wednesday, Feb 10, 16 @ 3:40 pm: ++ Ghost @ 12:43 pm++ Thank you - Markus57 - Wednesday, Feb 10, 16 @ 4:33 pm: 286.5 billion in revenue cannot be over the 16 year period (2000 - 2015)inferred. That is only an annual average of 17.9 billion in revenue. The claimed 19 billion in additional revenue amounts to roughly 1.2 billion additional annual revenue over the course of 16 years. A little more than 1.5% of the current budget if I figured that correctly? - AC - Wednesday, Feb 10, 16 @ 5:17 pm: Honeybear - no worries. My overall argument is that solid economic theory, well supported by evidence, shouldn’t be thrown out simply because it is misapplied. The overall conclusion of academic and not think tank Laffer curve analysis, is that there is truly a revenue maximizing tax rate, and Kansas is, and Illinois was, no where near that rate. Conservative think tanks rightly point out that government revenue is at or near 0% at both the 0% and 100% taxation levels, but they often leave out the actual value “laffer curve equilibrium point”. The reason they often do is that the number suggests a revenue maximizing level of total taxation that is rather high, perhaps even above that of California, and totaling between 60% - 70% including local, state and federal taxes. Tax cuts only pay for themselves through increases in total revenue when total taxation is above that level. Based on my back of envelope calculations, it suggests that the wealthiest in Illinois could pay considerably more, probably around 12% income tax, possibly more, before additional taxation would reduce total revenue. Sure, there are more theories than economists, but this issue is well researched, just misapplied by ideologues. - Last Bull Moose - Wednesday, Feb 10, 16 @ 5:51 pm: The gap analysis is a starting point, not an end point. It tries to estimate how big an opportunity exists. Then you get into the hard work of determining why the gap exists and whether policy changes can help. Kuwait has a higher GDP per capita than Illinois. It is also an autocratic emirate. The political structure does not drive the wealth difference. Though unions are banned there. - RNUG - Wednesday, Feb 10, 16 @ 6:48 pm: -Honeybear- and -AC- I went to a private high school. I remember one of the problems we were given one day in a math class was, given certain assumptions, to calculate the tuition that would net the maximum “profit” for the school. Note: this was in the late 1960’s, long before this basic economic theory, was labeled the “Laffer Curve” At that time I believe it was considered part of Keynesian theory. The basic thereom is as old as the 1400’s. - AC - Wednesday, Feb 10, 16 @ 7:55 pm: RNUG - indeed these are all old concepts, renamed, reimagined in some way. So much of economic theory explains a small concept well, and much of it isn’t necessarily contradictory. For example, Ricardian economics and the concept of comparative advantage appies as much today as a century ago. - Anonymous - Wednesday, Feb 10, 16 @ 8:50 pm: Sheesh, if I pulled all of my money out of stocks in 2007, bought stocks in 2009, sold in 2015,……if, if, if - DuPage - Wednesday, Feb 10, 16 @ 8:57 pm: Number for Rauner’s credibility=0.0% Sorry, comments for this post are now closed.