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Civic Federation wants spending limits and tax hikes: “There are no easy stop-gap fixes”

Thursday, Feb 11, 2016

* The Civic Federation has released its annual state budget report…

In a report released today, the Civic Federation’s Institute for Illinois’ Fiscal Sustainability proposes a comprehensive three-year plan that addresses Illinois’ ongoing financial crisis with painful but necessary spending limits and revenue enhancements. The full 55-page report is available at www.civicfed.org.

More than seven months into the current fiscal year, the State of Illinois continues to operate without a budget. However, virtually all of the State’s projected FY2016 revenues will be spent through statutory requirements, consent decrees, court orders and appropriated funds for elementary and secondary education. This leaves little for the areas of government that have gone unfunded, including all higher education and major human services programs. If current revenue and expenditure policies continue, the State’s backlog of bills could grow to $25.9 billion by the end of FY2019.

“Systemic payment delays and the ongoing budget impasse in Springfield have only exacerbated our State’s financial woes, and there are no more politically popular solutions left to explore,” said Laurence Msall, president of the Civic Federation. “Despite this dire situation, our roadmap shows that with dedicated action and shared sacrifice, it is possible to enact a comprehensive plan that will get Illinois back on sound financial footing by FY2019.”

The Federation proposes the following recommendations as part of a comprehensive three-year plan:

    *Limit Spending and Pay Down Bills: The State should control spending to generate budget surpluses that would allow it to pay down the backlog of unpaid bills by the end of FY2019. Projected spending for FY2016 starts at a low level that is more than $1 billion below previously estimated maintenance levels.

    * Revenue Cliff: The State should retroactively increase the income tax rate to 5.0% for individuals and 7.0% for corporations as of January 1, 2016, up from 3.75% and 5.25%, respectively, in order to address the fall in revenues resulting from the income tax rate rollback on January 1, 2015.

    * Broaden the Income Tax Base to Include Some Retirement Income: Out of the 41 states that impose an income tax, Illinois is one of only three that exempt all pension income. The State can no longer afford to provide this generous benefit and should eliminate the income tax exemption for non-Social Security retirement income from individuals with a taxable income of more than $50,000.

    * Expand the Earned Income Tax Credit to Provide Assistance to Low Income Residents: To help soften the impact of the State’s fiscal crisis on low income residents, the Civic Federation proposes an increase in the State’s Earned Income Tax Credit from 10% of the federal credit to 15% of the federal amount.

    * Expand the Sales Tax Base and Reduce the Retailer’s Discount: The Civic Federation recommends that Illinois temporarily suspend its sales tax exemption for food and nonprescription drugs, enact a new general consumer services tax and cap reimbursement to retailers for collecting sales tax revenues.

    * Establish Comprehensive Teachers’ Pension Funding Reform: There is no good public policy reason for Illinois to maintain two separate funds for public school teachers’ pensions. The Chicago Teachers’ Pension Fund and Teachers’ Retirement System should consolidate, providing more equitable pension funding for all teachers and helping to stabilize Chicago Public Schools’ finances.

    * Approve Constitutional Amendment Limiting Pension Protection Clause: The Civic Federation urges the General Assembly to draft and approve a proposed amendment to the Illinois Constitution for the November 2016 statewide ballot specifying that the clause in the Illinois Constitution protecting public pension benefits applies only to accrued benefits.

    * Make Supplemental Pension Payments: In order to mitigate the impact of the State’s inadequate statutory pension funding plan, the State should make supplemental payments corresponding to the reduced debt service obligations associated with retiring Pension Obligation bonds beginning in FY2019 until all five State retirement systems are 100% funded.

Only after the State eliminates its backlog of bills and begins to make progress toward building a rainy day fund should it explore reversing some of the tax policy changes that were necessary to end the crisis as part of a comprehensive look at the State’s tax system.

It is important to note that with less than six months remaining in the current fiscal year to address an operating shortfall of $4.6 billion, there are no practical measures that would completely balance the FY2016 budget and prevent an increase in the backlog of unpaid bills by the end of FY2016. Unlike FY2015, there are no easy stop-gap fixes such as interfund borrowing or fund sweeps that are available or adequate to close such a large operating shortfall.

Savings from pension reforms are no longer possible due to the Illinois State Supreme Court’s ruling that the changes were unconstitutional. Only difficult choices remain for the State.

The full report is here.

- Posted by Rich Miller        


75 Comments
  1. - Juvenal - Thursday, Feb 11, 16 @ 9:46 am:

    Great ideas accept amending the pension clause of the constitution, which does not save any money.

    One they left out: consolidation of the rest of the thousands of pension funds across the state.

    Oh yeah, and one more thing: Rauner is nver going to sign or support any of this. He just rejected something very similar from lawmakers in his own party.


  2. - Earnest - Thursday, Feb 11, 16 @ 9:46 am:

    Real numbers. Why are they so rare? They take us so far towards productive discussion and resolution. House Republicans, take these as a starting point and make it better but still real. Let’s end the sacrifices on the altar of collective bargaining.


  3. - Steve - Thursday, Feb 11, 16 @ 9:47 am:

    Illinois will have to start thinking about getting out the higher education industry. The marginal public universities need to be privatized : removing thousands of workers from the public payroll. It’s one “partial” solution to the public spending problem.


  4. - Rufus - Thursday, Feb 11, 16 @ 9:47 am:

    Well written and reasonable. The Constitutional Amendment Limiting Pension Protection Clause may prove difficult to get on the ballot. It will be tested in the courts, may have to wait until the 2020 constitutional convention.


  5. - Steve - Thursday, Feb 11, 16 @ 9:48 am:

    Some marginal public universities are going to have to be privatized to say money.


  6. - Very fed up - Thursday, Feb 11, 16 @ 9:50 am:

    Hard to to disagree with any of these. Would be the sort of plan that ordinary people could hammer out in a few hours if we could convince Rauner and Madigan to go on vacation for a few weeks somewhere far away.


  7. - Anonymous - Thursday, Feb 11, 16 @ 9:51 am:

    Forces retirees out of the state!


  8. - Chicago schooler - Thursday, Feb 11, 16 @ 9:56 am:

    Better hurry on the constitutional amendment or it won’t matter anymore.


  9. - Elementary - Thursday, Feb 11, 16 @ 9:57 am:

    Retirees will revolt…


  10. - 47th Ward - Thursday, Feb 11, 16 @ 10:01 am:

    A sensible and doable proposal that will be hard for Governor Rauner to ignore or dismiss. And yet I believe he will find a way to do both.


  11. - Norseman - Thursday, Feb 11, 16 @ 10:02 am:

    But it doesn’t include the poison pills so it’s a big thumbs down from Raunercorp.


  12. - Gruntled University Employee - Thursday, Feb 11, 16 @ 10:06 am:

    The Retirees are revolting….You said it, they stink on ice. PULL!


  13. - Cassandra - Thursday, Feb 11, 16 @ 10:07 am:

    I’m sure these folks are well-educated and well-intentioned, but c’mon.

    Tax pension income? Change the constitution re pensions? Make folks pay more for food and medicine and haircuts and stuff? Rauner brings back Pat Quinn’s tax increase-exactly, thereby admitting Pat was right? And they left out “corporate loopholes.” Hmm.

    Spring is the time for tax revenue fantasies. And it’s mostly the same fantasies. But at least spring must be around the corner.


  14. - RNUG - Thursday, Feb 11, 16 @ 10:12 am:

    See they are still flogging the discredited Sidley-Austin logic that only already accrued benefits are protected by the pension clause. Even if they pass it and get voter approval, it will only apply to new hires from that point forward.


  15. - burbanite - Thursday, Feb 11, 16 @ 10:15 am:

    What about consolidation of some of the duplicative and redundant units of gov’t?


  16. - RNUG - Thursday, Feb 11, 16 @ 10:15 am:

    They are also pushing a CPS pension fund bail-out under the guise of consolidation.

    And why oh why would we want to combine all the well funded small funds that are mostly under IMRF and we’ll managed today into the underfunded systems? On yeah, it’s a big pile of cash / assets that, when averaged, will make the mess look better for a while.


  17. - wordslinger - Thursday, Feb 11, 16 @ 10:16 am:

    –Real numbers. Why are they so rare? They take us so far towards productive discussion and resolution.–

    They get in the way of the nonsensical “structural reforms” spin.

    Read any Tribbie edit on doings in Springfield and you’ll not find one number. You’ll also never see any of so-called “reforms” described, or an actual data-driven case as to their benefits.

    The numbers are unforgiving. They do not serve shallow sophistry well.


  18. - RNUG - Thursday, Feb 11, 16 @ 10:18 am:

    Supplemental payments is a good idea although all they are really doing is restoring pension designated funds that were diverted to debt service to cover Blago’s pension borrowing.


  19. - thoughts matter - Thursday, Feb 11, 16 @ 10:18 am:

    I don’t have a problem with taxing retirement income over xx,xxx amount (and people can discuss what xx,xxx amount is), and applying it to all retires, whether state employees or otherwise.

    However, I do have a problem with exempting social security from that income determination. Not all citizens in Illinois paid in social security or were eligible for it for various reasons: profession exempt(teachers, railroad workers, etc) or didn’t work enough quarters, etc. Why should ALL of these retirees’ income be subject to the income limitation, and those who get social security be treated differently? Include it, raise the exempt amount to 65,000.

    Second, before anyone starts saying taxing retirement income is a diminishment of it…. no, it is not. You get your income just like every private sector retiree. You have to pay things out of it like every other retiree: rent, mortgage, property taxes, utilities, vacation, etc. What you spend your money on can vary every day of every year, has not a thing to do with your pension - as long as all sources of retirement income are taxed the same.


  20. - Fusion - Thursday, Feb 11, 16 @ 10:21 am:

    I wouldn’t bother with the constitutional amendment, but the rest looks pretty good. OK, let’s put it in bill form, pass it, and then send it to Rauner so that he can veto it.


  21. - Mama - Thursday, Feb 11, 16 @ 10:25 am:

    ++

    ++- burbanite - Thursday, Feb 11, 16 @ 10:15 am:
    What about consolidation of some of the duplicative and redundant units of gov’t?++

    Burbanite, please enlighten us with where these “duplicative and redundant units of gov’t” are located. Please name Names. Thank you


  22. - RNUG - Thursday, Feb 11, 16 @ 10:29 am:

    Taxing just retirement income and not including Social Security may be a bit iffy. Yes, other states do it. Yes, they are going after all pensions, not just government ones. And they are proposing a $50K exclusion on pensions. But most other states don’t have a pension protection clause like Illinois.

    There could be a court case and the outcome will hinge on the GA’s intent. If the intent is strictly re venue, it will pass muster. But if it can be PROVEN that the intent was to punish government retirees, it will be tossed out by the IL SC. If adopted, the GA better be VERY careful about how they describe the bill in debate on it.

    Another problem it might have is, with the large exclusion, it could be viewed as a back door way around the flat tax rule in a scheme to just tax the “wealthy” retiree. That might actually be the better argument if someone sues over it.

    I honestly think this will pass but it does have some problematic parts.


  23. - Carhartt Representative - Thursday, Feb 11, 16 @ 10:35 am:

    Yes, tax all retirees and pensioners, but let’s make sure not to try and do anything that may alleviate the problems caused by our flat tax structure.


  24. - The Dude Abides - Thursday, Feb 11, 16 @ 10:37 am:

    It would take some political moxy to pass a bill taxing retirement income. Basically our finances are in a mess because over the years politicians have shown a lack of moxy. Senior citizens vote in higher numbers than any other age group. Don’t hold your breath on that one.
    A misconception that Rauner and others have been discussing is reforming Government and eliminating waste. Actually a lot of fat has been trimmed from the Government in the past decade. What’s left to cut will not put a significant dent in solving our fiscal problems. Rauner stated the other day that if we run Government more efficiently and do such things as upgrade our IT infrastructure there would be no need to raise taxes. That, my friends is a big load of baloney.


  25. - walker - Thursday, Feb 11, 16 @ 10:51 am:

    About time. A comprehensive approach that produces fiscal balance. Unlike many other groups, we can count on their numbers, even if not always their proposals.


  26. - Chicago Cynic - Thursday, Feb 11, 16 @ 10:56 am:

    I don’t agree with all of it, but there’s got to be an adult in the room and civic federation has been playing an enormously constructive role as the adult in the room.


  27. - Anonymous - Thursday, Feb 11, 16 @ 11:01 am:

    “Some marginal public universities are going to have to be privatized to say money.” Save money for whom? Have you looked at how much tuition is at a private college?


  28. - Skeptic - Thursday, Feb 11, 16 @ 11:01 am:

    Grrr…. Anonymous @ 11:01 was me.


  29. - Rasselas - Thursday, Feb 11, 16 @ 11:01 am:

    Very fed up - I’m surprised you continue to buy into the notion that this is Rauner vs. Madigan, two individuals. It is between Rauner, an individual with his own long-held, deeply-held loathing of public sector unions and Madigan, as LEADER of the Democrats. The difference is important. As many Democratic Reps and Senators have already written, Rauner is asking them to go against their beliefs and their constituents, but casting it as going against Madigan. If Madigan disappeared tomorrow, there would be no Democratic groundswell of support to jettison unions and embrace the rest of the Rauner agenda. There would simply be someone else leading the Democrats who would probably be less skillful at rebuffing the agenda, which is probably Rauner’s objective in personalizing it.


  30. - Tone - Thursday, Feb 11, 16 @ 11:07 am:

    - Anonymous - Thursday, Feb 11, 16 @ 11:01 am:

    “Some marginal public universities are going to have to be privatized to say money.” Save money for whom? Have you looked at how much tuition is at a private college?

    Save money for taxpayers.


  31. - Crazy Horse - Thursday, Feb 11, 16 @ 11:21 am:

    =If the intent is strictly re venue, it will pass muster.=

    Agreed but that sure sounds like a tough argument to win. I don’t know what the max you can receive via social security while also earning a pension but this would seem patently ridiculous in some scenarios. Let’s say a guy with a 55 K pension and little/no SS gets taxed on 5K. Another guy with a 45K pension and 25K SS pays no tax? How does that help revenue? They’d be losing out on 20K of taxable income. How do you spin that as a revenue concern versus just punishing pensioners?


  32. - Skeptic - Thursday, Feb 11, 16 @ 11:23 am:

    I notice they make no mention of redistricting, term limits, prevailing wage or busting unions.


  33. - Langhorne - Thursday, Feb 11, 16 @ 11:35 am:

    Like it or hate it, at least it is a comprehensive proposal. Real numbers. Real specifics. So, of course, Rauner will ignore it.


  34. - Soccermom - Thursday, Feb 11, 16 @ 11:39 am:

    RNUG — I agree with you on the IMRF funds, but there are all those individual police and fire pension funds that are wasting huge amounts of taxpayer money.


  35. - Soccermom - Thursday, Feb 11, 16 @ 11:40 am:

    Mama — take a look at the townships, for a start. And consolidating tiny school districts would save huge amounts of money (although their highly paid top administrators would squeal like stuck pigs.)


  36. - Beaner - Thursday, Feb 11, 16 @ 11:41 am:

    So the top gaming tax rate will not be lowered from $200 million? To fund the Common School fund for the Kids, and lower our property taxes?
    We can’t match Washington State’s Liquor tax and raise $400 million? Times have not changed much since Len Small was Governor, eh?


  37. - wordslinger - Thursday, Feb 11, 16 @ 11:43 am:

    –Illinois will have to start thinking about getting out the higher education industry.–

    LOL, think about it? That’s happening right now.

    Universities and community colleges haven’t seen a dime in eight months. They’re tossing people out of work for lack of state payments. They’re never going to be made whole on that.

    That doesn’t happen unless you want it to, unless it’s part of the plan. See Sen. Radogno, “squeezing the beast” for the “shakeout.”

    MAP students have been told to take their studies elsewhere. Do you think the parents of high school juniors and seniors don’t see the writing on the wall, and will make plans accordingly?

    How’s that for Brain Drain?

    It’s counter-intuitive, but I guess being the first state to ever abandon public higher education will give Illinois a unique selling point as it markets the governor’s “pro-growth” strategy to the world:

    “Illinois. No Fancy Book-Learnin’ Here.”

    “Illinois: The New Mississippi.”


  38. - Skeptic - Thursday, Feb 11, 16 @ 11:48 am:

    “top administrators would squeal like stuck pigs” as would the sports supporters, among others.


  39. - RNUG - Thursday, Feb 11, 16 @ 11:53 am:

    == there are all those individual police and fire pension funds ==

    It depends on the entity, but I know some of those have chosen to be part of IMRF. The ones that have not, for the most part, are not in great fiscal shape.

    I’d want to see the structure of the proposal to see if it was a bailout for local government or if it was just a plan to create one of fund to make things and make a bigger target / problem.


  40. - nixit71 - Thursday, Feb 11, 16 @ 11:55 am:

    401k and pension contributions are tax deferred, whereas Social Security contributions are not. If you tax Social Security, you are essentially taxing those wages twice. I’m not sure why folks have a hard time grasping this concept.

    You could, perhaps, tax the interest earned on Social Security. Although that might be difficult considering the means testing involved.


  41. - RNUG - Thursday, Feb 11, 16 @ 12:09 pm:

    -nixit71-

    It’s more about unequal treatment of government retirees versus Social Security in claiming benefits. Some were not allowed to participate in SS. Others that also worked in the private sector and PAID into SS either can’t receive it at all or have it reduced because of several different offset rules.


  42. - 47th Ward - Thursday, Feb 11, 16 @ 12:14 pm:

    ===Illinois: The New Mississippi===

    Lol.

    Illinois: As dumb as Mississippi, but with more snow!


  43. - Juice - Thursday, Feb 11, 16 @ 12:16 pm:

    RNUG, one point of clarification. The debt service on Rod’s POBs are subtracted from the pension contribution. The debt service on the FY 2010 and 2011 pension borrowings is not. Those will be paid off after 2019, freeing up $1 billion that could be used to supplement the pension contribution. Rod’s are already scheduled to do that essentially, but not until 2033.


  44. - Juvenal - Thursday, Feb 11, 16 @ 12:19 pm:

    RNUG -

    There’s no constitutional issue with taxing retirement incomes with regard to the pension clause. Particularly if you are exempting retirement income below $50K, I am guessing that is 90% or more of public employees.

    Taxing JUST the retirement income of state workers would be unconstitutional, but politically you could sell it to the public as a tax on “sweetheart government pensions”.


  45. - Arthur Andersen - Thursday, Feb 11, 16 @ 12:24 pm:

    RNUG, correct me if I’m wrong, but I didn’t think police/fire had an option to opt in to IMRF. I recall that as a group, they had lobbied to make sure they stayed out.

    The TRS/CTPF “reform” is hardly that. It’s frankly a CTPF bailout. As proposed, the State assumes $9.8 billion in CTPF unfunded liability, all the ongoing operational costs, and the responsibility to pay CTPF normal cost (currently $150 million) going forward.

    The narrative suggests the State is to blame for CTPF’s 50 percent funded status. I don’t get that one, except for maybe that the State opened the barn door back in the 90’s and let Daley spend money that should have gone to pensions on other stuff.

    Bad. Idea.


  46. - Enviro - Thursday, Feb 11, 16 @ 12:27 pm:

    Exempting retirement income below $50,000 would not follow the Illinois flat tax which is required by the Illinois constitution.


  47. - RNUG - Thursday, Feb 11, 16 @ 12:30 pm:

    -Juice-

    Thanks, I was crossing up the pension bonds


  48. - Tone - Thursday, Feb 11, 16 @ 12:31 pm:

    Illinois, minus Chicago metro, is Mississippi. Nothing new about that.


  49. - RNUG - Thursday, Feb 11, 16 @ 12:35 pm:

    -AA-

    I know a retired LE who is collecting from IMRF; thought they said the town and later county they worked for opted into IMRF.


  50. - forwhatitsworth - Thursday, Feb 11, 16 @ 12:46 pm:

    Where’s the part about honest shared sacrifice?


  51. - RNUG - Thursday, Feb 11, 16 @ 12:53 pm:

    - Juvenal -

    The point I was trying to make, which I think you understood, was the GA needed to be clear about the purpose of the tax or government retirees could try to claim diminishment if it was apparent they specifically were the “target”. As I noted, I think such a tax could be structured legally.

    As mentioned, I think the unequal treatment / flat tax argument re taxing only pensions would be the stronger point. Uncoordinated government retirees are treated differently if they also have coordinated (SS) earnings and try to collect SS; they generally are not allowed their “full” benefit amount or not allowed any benefit (happened to my mom when she tried to get SS survivor’s from dad’s contributions). To treat them differently a second time would not be fair and might allow room for an unequal treatment claim. Just think the legal people need to dig into it a bit deeper before drafting the actual legislation.


  52. - Anonymous - Thursday, Feb 11, 16 @ 1:04 pm:

    How about taxing income before it goes into retirement savings, as in a Roth? I mean, a person who saves for retirement does so with the idea that this money will be available to them when they need it as their expenses increase. To pull the rug out from them after the fact sounds as punishing as Rauner’s lack of funding to those in need. Not everyone who is retired owns multiple homes, golfs every day and is in perfect health.


  53. - Rasselas - Thursday, Feb 11, 16 @ 1:11 pm:

    Enviro - why would this violate the constitution? The current income tax has an exemption for individual taxpayers ($2150) and additional exemptions for elderly and blind ($1000), although the Illinois Constitution is silent on exemptions. Couldn’t there be a different, higher exemption for pension income? The only constitutional provision is that there be a single rate on individuals.


  54. - river rat - Thursday, Feb 11, 16 @ 1:17 pm:

    There is only one amendment needed and the federation can’t be taken seriously unyil they propose it: a graduated income tax.


  55. - CapnCrunch - Thursday, Feb 11, 16 @ 1:35 pm:

    “Do you think the parents of high school juniors and seniors don’t see the writing on the wall, and will make plans accordingly?”

    “More than 37,000 students applied for fall admission to UIUC, a new record — …”
    ..10 percent more students applying to the UI than in 2015. The number of Illinois applicants rose 9 percent, from 16,688 to 18,203.”

    Northern Illinois University spokesman Joe King says the percentage change in student enrollment from fall to spring this year “is almost identical to that of the last few years.”


  56. - Juice - Thursday, Feb 11, 16 @ 1:41 pm:

    River rat, read the report. Page 48.


  57. - nixit71 - Thursday, Feb 11, 16 @ 1:42 pm:

    ==How about taxing income before it goes into retirement savings==

    OK, but that won’t address the retirees paying no income tax today. And every state would have to enact this rule, otherwise retirees moving to other states would be taxed twice. And underlying the idea of tax deferral was the assumption that your income in retirement would be less than when you worked, thereby, lowering your overall tax liability.


  58. - Enviro - Thursday, Feb 11, 16 @ 1:55 pm:

    Rasselas @ 1:11 pm: “why would this violate the constitution? The current income tax has an exemption for individual taxpayers ($2150) and additional exemptions for elderly and blind ($1000), although the Illinois Constitution is silent on exemptions. Couldn’t there be a different, higher exemption for pension income? The only constitutional provision is that there be a single rate on individuals.”

    Exemptions for all individual taxpayers of $2150 but exemptions of $50,000 for retirement income would not satisfy the constitutional provision of a single tax rate. Wouldn’t all taxpayers want to have the $50,000 exemption?


  59. - RNUG - Thursday, Feb 11, 16 @ 2:00 pm:

    -AA-,

    Just had a thought. I wonder if my friend started out in an IMRF covered civilian position as his first job and it just followed him?


  60. - Ill_will - Thursday, Feb 11, 16 @ 2:00 pm:

    Retirees will not leave because of this. If they leave, it’s for other reasons. Yes. I am a retiree. Yes. I have liked not paying. Yes. I think it’s been foolish. No. I have not been donating 3% to the state.
    Those who use this as a reason to leave? They were leaving anyway. My 2 cents.


  61. - RNUG - Thursday, Feb 11, 16 @ 2:10 pm:

    As a retiree, I won’t leave over the proposed income tax. For the time being, I’ll still be here for the usual reasons: elderly parents / in-laws (only 1 left) and kids / grand-kids here.


  62. - Arthur Andersen - Thursday, Feb 11, 16 @ 2:37 pm:

    RNUG, there may have been a “window” for police/fire to opt in to IMRF back when we were youngsters. If your friend is a county sheriff/deputy, they are all in IMRF as well. The Reciprocal Act could also have a bearing on where his annuity comes from.

    I would agree with you that a “Pension Tax” wouldn’t cause me to immediately relocate-family ties are more important.


  63. - river rat - Thursday, Feb 11, 16 @ 2:39 pm:

    Juice: Burying a “modestly graduated rate structure” on page 48 isn’t what I had in mnd. Rauner pays 4.6 overall…..the Wal-Mart worker 13.2. Let’s start there…. in reverse. The federation suggestions are more take from the poor and give to the rich.


  64. - Very fed up - Thursday, Feb 11, 16 @ 2:59 pm:

    River rat - a graduated income tax is not something that is gonna happen anytime soon. Rauner will never support it as will Madigan who has made his millions representing some of the states wealthiest property owners.


  65. - RNUG - Thursday, Feb 11, 16 @ 3:02 pm:

    -AA-,

    Believe he started city LE, retired county LE.


  66. - Ghost - Thursday, Feb 11, 16 @ 3:32 pm:

    some good ideas here. the ammend const looks more like a magic beans scenerio.

    i woukd ad some revenue ideas directed and payin back the refirected pension funds. ad some casinos and legalize marijunna, and mandate x percent of the miney from those got solely to paying back the pension. its all new revenue. also dump the 100 funded concept and mandate the state make the annual pension payment for cutrent employees every year. i.e if the state pays, call it 10% annualy per employee to cover that employees retirment… mandate that payment. then use new tevenues and the expiring bond payments to pay back the borrowed amounts.

    keep in mind every year the state hires more tier2 employees it chips a little more out of the debt as well.


  67. - RNUG - Thursday, Feb 11, 16 @ 3:45 pm:

    One other point to remember here. I believe only 3 constitutional amendments are allowed per election cycle. If you load up with an unconstitutional pension “reform” proposal and other garbage of that ilk, there won’t be any room for term limits or redistricting reform or a graduated income tax.


  68. - Soccermom - Thursday, Feb 11, 16 @ 4:07 pm:

    RNUG — as usual, you raise a very good point. There aren’t many retirees living in Illinois who would leave because their taxes increased by a couple of percentage points. (That’s my back of the envelope math on imposing income tax over $50k.) Nobody comes here for the weather. Either you have strong family or community ties that keep you here, or you’re living in a house that’s long been paid off in a community with relatively low property taxes. It wouldn’t make a lot of sense to sell your house and pick up stakes to move someplace more expensive just to save a couple hundred dollars a month. (And yes, I know that a couple hundred dollars a month adds up, but we’re talking specifically about people who receive more than $50k a year.)


  69. - RNUG - Thursday, Feb 11, 16 @ 4:49 pm:

    -Soccermom-

    For me it is strictly family.


  70. - Cassandra - Thursday, Feb 11, 16 @ 5:21 pm:

    The concern about retirees leaving the state is a red herring. Of course many people probably leave the state at retirement, but any departures resulting solely from a tax increase would probably be marginal.

    They may not move, but they’ll vote. And retirement is a time when folks are particularly sensitive to reductions in income (for obvious reasons). A tax targeting only upper income retirees may not bring in enough cash to make a vote for it worth the political risk, since all might feel threatened. Remember the fuss over Pat Quinn charging state retirees for that health insurance premiums. It passed, then it got reversed. Was it worth it. A lot of pols might say no.


  71. - RNUG - Thursday, Feb 11, 16 @ 6:09 pm:

    ==Remember the fuss over Pat Quinn charging state retirees for that health insurance premiums. It passed, then it got reversed. ==

    You make it sound like Quinn couldn’t take the heat and decided to reverse it. Not what happened.

    Specifically, it got overturned by the IL SC as unconstitutional diminishment.


  72. - Cassandra - Thursday, Feb 11, 16 @ 6:20 pm:

    No, that’s not what I said.

    From the perspective of a legislator voting for this controversial charge on state retirees, he/she cast a vote for nothing in the end. Indeed, a vote that could come back to bite in the future, were that legislator to have an actual opponent some day. Most don’t have serious opposition, but they sure act like they do…or might.


  73. - Charlie Wheeler - Thursday, Feb 11, 16 @ 7:20 pm:

    Point of information:

    Illinois Constitution

    ARTICLE XIV — CONSTITUTIONAL REVISION

    SECTION 2. AMENDMENTS BY GENERAL ASSEMBLY
    (c) The General Assembly shall not submit proposed amendments to more than three Articles of the Constitution at any one election. No amendment shall be proposed or submitted under this Section from the time a Convention is called until after the electors have voted on the revision or amendments, if any, proposed by such Convention.
    (Source: Illinois Constitution.)

    Charlie Wheeler


  74. - cannon649 - Thursday, Feb 11, 16 @ 7:58 pm:

    Increase taxes rates, Increase the tax base and no real specifics on any type of spending reform.

    Compound ed with a top sales tax rate and real estate taxes and we will still have on of the largest unfunded pension liabilities going (percentage wise).

    Real Reform Please

    An ones wonder why if retiree will want to stay in Illinois?


  75. - JS Mill - Thursday, Feb 11, 16 @ 8:52 pm:

    @Soccermom- as one of the squeelers you describe (not as classy as I accustomed from you) small district, especially small rural district consolidation will probably come with 1 1/2 to two hour bus rides to and from school. As a mom you are ok with that? Interesting. some districts cover 200, 300, and 400 square miles. Buses don’t run on dreams and the state has only paid 25% of 35% of our actual transportation entitlement.

    The dual districts that make up much of cook county and exist I large numbers in the suburbs would be the best place for consolidation. Other towns like pontiac and Rantoul have dual districts that could consolidate. These could save some money in operational costs but don’t count on as much as you would think.

    To the post- tax SSI along with pensions. Tax all retirement income above $50,000. The amendments save nothing and as RNUG points out, will not impact current employees. The CPS deal is a bailout for purposefully underfunding that pension with a wink from the ILGA ( how could they complain) so don’t do it. Chicago wanted control and they got it. These are the consequences.


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