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* “Trust” is the word of the day….
Conceding that many state lawmakers just don’t trust Gov. Rod Blagojevich, two former congressmen Tuesday unveiled a $31 billion public-works package to be paid for by leasing part of the lottery, giving Chicago a casino and allowing slot machines at horse-racing tracks.
Former U.S. House Speaker Dennis Hastert, a suburban Republican, and former U.S. Rep. Glenn Poshard, a Downstate Democrat, delivered the Blagojevich-backed plan to lawmakers, who immediately greeted its chances with skepticism as they try to finish a state budget in the next 10 days.
* And…
But the two veteran political leaders — who have been Gov. Rod Blagojevich’s roving emissaries on the issue lately — acknowledged that legislative distrust of Blagojevich has hampered their effort. Their recommendations include “accountability provisions” to reassure legislators that the Democratic governor won’t break any agreements on how the money is supposed to be spent. […]
“Part of the problem is a trust factor, frankly, between the Legislature and the governor,” said Hastert, a Republican who is a former speaker of the U.S. House
* And…
Senate Minority Leader Frank Watson, R-Greenville, said the revenue ideas floated Tuesday are “iffy at best.” He said Republicans also are still leery of so-called accountability measures contained in the plan. Those measures were included to allay fears that Blagojevich might use the money for something other than construction projects or would only approve projects for his political allies.
* Watson added…
“We need a lockbox that Houdini can’t get out of.”
* As Watson pointed out, the trust factor isn’t the only problem here. There’s also the funding mechanisms…
To pay for the $31 billion package, proponents are counting on two ideas that have stalled in the legislature.
They hope to raise $10 billion by leasing a large portion of the lottery, with $7 billion going for construction and the rest for increased education spending.
The other hurdle is winning support for a huge gambling expansion that includes a land-based Chicago casino, a new riverboat casino, adding thousands of positions at existing boats and putting slot machines at racetracks. The plan also counts on taking advantage of the state’s surge in gas-tax revenues tied to higher prices at the pump.
* That last proposal came at somewhat of an inopportune time for the House Republicans, who held a press conference yesterday morning demanding that motorists be given a gasoline sales tax holiday this summer…
House Republicans are calling for a suspension of the Illinois sales tax on gasoline this summer.
Lawmakers claim the average family would save up to $60 over a four-month tax holiday. Truckers might save $1,000.
* Patterson put it well…
So, now those House Republicans face this choice: help local motorists, or get credit for big new construction projects with grand ribbon-cutting ceremonies.
But Patterson later bumped into a House GOP spokesperson who said: “We’re for capital.”
* That quote sums up the dire need for a capital plan…
Most Illinois political leaders in both parties agree a major program is necessary to rebuild deteriorating highways, bridges, schools and public transit. The failure to launch such a plan has endangered $9.3 billion in federal matching funds.
“We’re the fifth-largest state in the nation (and) we’ve been nine years without an investment in our infrastructure,” said Poshard, a former Democratic gubernatorial candidate and now president of Southern Illinois University at Carbondale. “We can’t compete (economically) if we don’t decide to invest.”
But without trust, it’s gonna be really tough to get this done.
* Meanwhile, even though Blagojevich has said that the capital plan and the budget are tied together, two top Senate Democrats had news for the guv…
Sen. Donne Trotter, D-Chicago, said lawmakers have to approve a budget before adjourning.
“We do not need to pass a capital bill to be out of here by June 1,” he said.
“A capital bill is separate. They are not tied together in any way,” agreed Senate Majority Leader Debbie Halvorson, D-Crete.
posted by Rich Miller
Wednesday, May 21, 08 @ 8:49 am
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Selling/leasing the lottery is a terrible idea. No sooner will they spend all the proceeds and we will be faced with another financial shortfall.
The only solution is to raise the income tax rate by a 1/2 point.
The lotto was created to fund education. Where will the funds come from after the sale/lease?
Comment by MOON Wednesday, May 21, 08 @ 9:00 am
The headline says it all…pass a no-growth budget and go home for the summer. There can’t be serious negotiations before a verdict in the Rezko trial, and getting agreement on specific projects to be funded is too much to get done before fall.
Comment by Vote Quimby! Wednesday, May 21, 08 @ 9:01 am
I’d like to see an independent analysis of these revenue streams. My guess is that to get a decent rate on the bond market, a secondary source, like a portion of the state sales tax, would have to be pledged in case the proposed revenues fell short. That’s been done for McCormick Place in the past.
Comment by wordslinger Wednesday, May 21, 08 @ 9:03 am
Gov. Ryan declared a gas tax holiday for a while back when a gallon skyrocketed to $1.79 a gallon. Once the governemnt has the revenue stream, just keep it flowing. Damming that stream will only cause the need for more taxes or less services (and lots of hand-wringing) down the road (if you will excuse the mixed metaphors).
Most folks I talk with, including my elderly parents, would not look that badly on a state income tax increase. Is the beast being starved for this source of revenue to be gratefully swallowed?
Comment by anon Wednesday, May 21, 08 @ 9:07 am
As long as Rod Blagojevich holds the title of Governor there will be a gridlock and nothing good is going to happen in state government. The only ones hurt by this will be the “people” of this state who Blago claims he fights for. Impeach this imposter of a Public Servant or just shut down state government and be done with it.
Comment by Dan S, a Voter & Cubs Fan Wednesday, May 21, 08 @ 9:13 am
Okay…In the spirit that Rich likes, let’s try some solutions. As recent history has proven under a former Governor, how about a 1/2 percent income tax hike with a 3 year sunset coupled with a low growth budget for those items required to be elevated.
Secondly, how about legislation where all state workers who’ve had at least three years of employment could buy up to five years of age and time toward retirement, but could not use this toward retirement for a period of three years. All proceeds would go directly to the pension funds. This would stop the silly golden parachutes of the past, as well as create an incentive and allow for more openings for lower cost entry positions over time…of course, it takes a little leadership and thought, something lacking these days in Springpatch.
Comment by bassman Wednesday, May 21, 08 @ 9:32 am
It never ceases to amaze me that, from about 80 to 100 years ago, we were able to construct nearly all the paved state highways that exist today (excepting the interstates and tollways) across the state from scratch, construct Chicago’s elevated rapid transit system from scratch, and reverse the flow of the Chicago River to promote sanitation.
Nowadays we have trouble building anything new, much less patching up everything we have to hold it together til next year. There are a few bright spots here and there, like the recent Dan Ryan reconstruction, Mc Cormick Center expansion, and Millenium Park.
The spirit of Daniel Burnham cries out, “Make no little plans. They have no magic to stir men’s blood and probably will not themselves be realized.” (Ironically, a similar quote is also attributed to Niccolo Machiavelli).
Comment by Six Degrees of Separation Wednesday, May 21, 08 @ 9:36 am
good ideas bassman, and I am not a State employee, seems fair and could work
Comment by Anon Wednesday, May 21, 08 @ 9:38 am
Does anyone know what the bill number is for the capital budget plan? I was trying to look on their website to see what it all entails.
Also to Six Degrees, the whole L system was built with private funds.
Comment by nonewtaxes Wednesday, May 21, 08 @ 9:45 am
A big reason government is failing to finish or maintain infrastructure projects is the social programs that have been created. Social spending is not only neverending, it is ever increasing.
We are taxed to the hilt. The majority of those taxes are not being spent on capital project, (nor should they be), since borrowing money to build infrastructure is a good investment, normally. But we have a difficult time when our credit is ruined because our money stream has been diverted to paying for social programs.
We are not stupid. While there are reasons we have enacted and fund massive social programs, we have been also building a massive bureaucracy with no end in sight on costs that have no end in sight. As long as voters vote themselves supposed freebies, we will see this jam. Honestly, the next step is bankrupsy under the mentality we currently see.
Gambling is now used up. Horse racing, casinos - I mean what’s next? Just how much lunch money do these legislators believe we have available so that they can continue feeding these bureaucratic monsters? It is a downward spiral that sucks the life out of states seeking to be globally competative to keep business and capital within it’s borders.
There is no magic. We have made commitments we cannot meet and are fiscally ruining us.
Comment by VanillaMan Wednesday, May 21, 08 @ 9:50 am
The elderly in Illinois might not be opposed to an income tax increase because it doesn’t affect them unless they are still working or have a lot of investment income.
Illinois is one of the few states which doesn’t tax pension income. Social Security, public and private pensions, none are taxed.
When older citizens speak favorably of an increase in income taxes, most are, in fact, endorsing a higher tax burden on the middle class. As we all know, the poor ride free in Illinois and the wealthy (including our legislators and political officials and high-level state government employees) barely feel the pinch.
Comment by Cassandra Wednesday, May 21, 08 @ 10:36 am
The Hastert/Poshard dog and pony show trotted out by Blogo is a complete waste of two talented men’s time and I can’t believe they let this Governor sucker them into stealing their credibility. What were these guys thinking?
Comment by Garp Wednesday, May 21, 08 @ 10:50 am
and why would the legislature give a casino to Chicago? The proposal has 19 years of failed attempts behind it. What’s changed now to make this attempt any better?
- there is a recession going on and the casino business is down twenty percent in Illinois;
- who wants to give rich Daley that kind of economic power?;
- more than a few legislatorers don’t buy the idea that government should be the “man” and fleece people’s money;
- the idea of using visitors to Chicago as cattle for a casino also rubs people the wrong way.
Oh the list goes on. Face it, the political system in Illinois is broken if this is the best leaders can come up with - 19 years of losing on the same proposal.
Doug Dobmeyer
Spokesperson
Task Force to Oppose Gambling in Chicago
Comment by Doug Dobmeyer Wednesday, May 21, 08 @ 10:58 am
nonewtaxes-
I know the Chicago Rapid Transit Company’s predecessors were built with private funds, that Sam Insull laid the groundwork for all the separate elevated rail companies to be combined, and the system was actually a money maker at one point. That such a system could be built from the ground up with private capital makes it all the more remarkable. The private sector seems to be inching their way back into transportation again in this century, what with all the European consortiums building or buying toll roads in the US. The airlines are floundering, but the mostly non-subsidized private freight rail companies continue to grow record traffic volumes and profits.
Bassman’s first idea (a temporary bump in state income tax to pay for capital) seems more sensible than an asset sale if we are to create a short term obligation and pay for it with public money. I agree with Cassandra that it lets a few wealthy retirees off the hook.
Bassman’s second idea (another Early Retirement scheme for state employees) will infuse a little cash now, but will likely create a big long term liability on the back end. We’ve had enough of that lately.
Comment by Six Degrees of Separation Wednesday, May 21, 08 @ 11:18 am
Denny Hastert…like Bush, his reputation has diminished to near nothing…..”retired” and looking for ways to “make some money”.
Comment by You Go Boy Wednesday, May 21, 08 @ 11:30 am
Cassandra,
Thank you for pointing that out. you beat me to the punch.
Instead of raising taxes, let’s just get rid of income tax loopholes, like the one that lets retirees — even the wealthiest — avoid paying state taxes even as they demand more government assistance programs.
Comment by Michelle Flaherty Wednesday, May 21, 08 @ 12:31 pm
1) Reduce pension obligations, a la the new CTA contract. It’s a chasm that continues to grow. Taxes on pensions has zero chance of getting a whiff in the GA.
2) Mandatory minimum 3% across-the-board cut of all state departments. More with less, as the saying goes, and forcing said departments to make difficult, but necessary choices. We all know there are programs offered that are of little value, outside of a political sound byte.
3) Ethics bill passed…right now. Not directly related to the FY09 operating and capital budgets, but may rebuild some modicum of trust amongst legislators, resulting in the passage of a budget.
4) An increase in user-based fees, like higher fees for registering a SUV as compared to a passenger automobile. This provides Illinoisans a choice, rather than a mandate, of paying more.
5) Table a capital plan until the four items above are complete. A huge expansion of gambling and leasing of the state lottery are failed retreads and long shots in a best-case scenario.
Comment by The Doc Wednesday, May 21, 08 @ 12:49 pm
Let’s do a rough calculation of how much we could expect to extract from the elderly if the state income tax applied to them.
According to the 2007 US Census estimates, there are about 1.55 million people over the age of 65 in IL. In 2000, the median household income of age 65-74 was $31,368 and for age 75 and up $22,259. Households are comprised of singles, couples, and other aggregations headed by a householder or rentholder of that age group, so let’s derive per capita by assuming an overall household income of 65+ of $35,000 (inflating to 2008) and dividing by 1.5 (to account for more than 1 person in the average elderly household). That leaves an average per capita income of 65+ of $23,333.
If we multiply 1.55 million by $23,333 by 3 percent, we get an annual revenue of $1.085 billion, or about 2% extra money in the state’s coffers. Enough to make a small dent, but definitely not an earth shattering amount.
Being a rough calculation, we are not accounting for those who retire early or for those who could shelter their income to pay a lesser amount. Or for those 65+ “on the fence” who might choose to leave IL at the prospect of being taxed more.
Comment by Six Degrees of Separation Wednesday, May 21, 08 @ 1:29 pm
I am also not accounting for the fact that “all” the 65+ income might not be from currently non-taxable pensions or SS. There are several factors here that might push the additional tax collection potential up or down, and most of them look to be “down” on the face of them.
Comment by Six Degrees of Separation Wednesday, May 21, 08 @ 2:06 pm
The issue is not really whether the elderly should pay income taxes or not. It’s likely a moot issue as there would be a huge outcry and legislators would quickly back off; even a legislator-for-life might be nervous about alienating the growing senior vote.
My point is…who should pay? One should always look at the motives of those suggesting that
taxes be increased because generally they are talking about somebody else’s taxes. Somebody else, in Illinois, is usually the working-age
middle class. We pay for the tax breaks of others.
Comment by Cassandra Wednesday, May 21, 08 @ 2:40 pm
Classic.
First-
The issue is not really whether the elderly should pay income taxes or not.
Then -
My point is…who should pay?
Comment by Six Degrees of Separation Wednesday, May 21, 08 @ 2:55 pm
An added billion a year, every year is more than selling off the 10th casino every year.
But Cassandra’s right. Seniors lending their support to tax increases should be ignored since they’re not effected.
As for them leaving, there’s a good chance any retiree leaving Illinois would end up with a higher tax burden. We’re among the few states that don’t tax retirees and if we did, our state income tax rate is among the lowest.
But go ahead and back the moving van up to the retirement community. At least the health care burden wil shift to another state.
Comment by Michelle Flaherty Wednesday, May 21, 08 @ 3:03 pm
FWIW,
I am not against the concept of taxing retirees, especially those making a comfortable income. I hope to be in that category, and would not miss the 3% if it were going to worthy services and public investments. However, it is annoying to hear invectives against the retired crowd and their “assumed” position. IIRC, they didn’t ask for free transit rides, among other things.
Comment by Six Degrees of Separation Wednesday, May 21, 08 @ 3:09 pm
As citizens of Illinois, we are not taxed to the hilt by state and local taxes. Compared to other states, we are taxed fairly moderately. And, as a state,our credit is not ruined. It is better than I would have hoped given the past few years.
Cassandra, I’ve said it on here, and I will say it again. My taxes, and the taxes of people in situations comarable to or better off than me, should be increased.
Comment by steve schnorf Wednesday, May 21, 08 @ 3:10 pm
And an extra $1 billion could pay off the bonds on a $31 billion capital bill in, oh, 45 years or so. It would be a start, if nothing else. I don’t think this is a political 3rd rail in general, but I also believe the only way a tax on pension/SS will pass is if it is limited to household incomes of $80k+/year or more. Otherwise we will hear horror stories of grandma and grandpa being forced out of their home in January. And then the collections will be well below the $1 bil/year range. Hey, if it’s fair, it’s fair.
However, we all know the gov’s position on this one for the last 6 years.
Comment by Six Degrees of Separation Wednesday, May 21, 08 @ 3:19 pm
I am wondering whether there is another state of Illinois Steve Schnorf lives in. We get income taxed, sales taxed, real estate taxed, license taxed, permit taxed, toll taxed, sin taxed, gas taxed to death both locally and via the state.
The federal government is sending out tax rebates to get the economy going but all I hear from the state, counties and cities is we need to raise taxes, we need more money, we need a raise, ect.
I am not sure what “to the hilt” means but when people can’t afford their homes, can’t afford to drive to work, have to go on food stamps, can’t afford healthcare, can’t afford childcare, can’t take a vacation, have to get a second job, I would say the sword is thrust pretty deep.
Not everyone receives an untaxed state pension paid by Illinois taxpayers but if you want to pay more their are plenty of charities that could use the money.
Comment by Garp Wednesday, May 21, 08 @ 3:52 pm
I hope Hastert keeps working with these democrats. If he does to them what he has done to the republican party, there will be no more politicians. What a hack.
Comment by Heartless Libertarian Wednesday, May 21, 08 @ 6:22 pm
Want a capital program? Tell the Gov and the Legislature to stop raiding the road fund to shore up the general budget. Has everyone forgotten that the transportation system is hurting because it hasn’t been able to access all the money it receives? This may not solve school funding or other capital projects, but it will provide some additional jobs in Illinois.
Comment by with liberty for all.... Wednesday, May 21, 08 @ 7:43 pm
I also dont trust IDOT regardless of Govoner.
Believ it or not I would actually prefer earmarks in certan cases
Comment by westernillinois cynic Wednesday, May 21, 08 @ 8:12 pm
It is only pension income that is not taxed. Earned income from working and investment income are taxed. I don’t think taxing pensions would bring the windfall that was mentioned.
We need a higher State income tax and a lot less local gov’t units squeezing us for more property taxes.
Comment by LTSW Wednesday, May 21, 08 @ 8:53 pm
Garp, the pension Schnorf is drawing (and AA hopes to live long enough to draw) may be untaxed, but it sure as heck wasn’t “paid by illinois taxpayers.” The State has done such a lousy job of funding the pension systems that the average teacher or university employee retiring this year actually contributed more toward his or her pension than the State did. The majority of the pension will be paid from investment returns. Don’t forget teachers and university employees don’t get Social Security from public employment, either. For State employees, the picture is similar.
If I make it to get that check, after I buy Bill a few drinks, AA would be happy to be taxed on it as long as I had some confidence that the $$ would not be p***** away. Current confidence level: zero, excluding Mr. Speaker.
With liberty also has a valid point. Road Fund transfers out have gone through the roof over the past five years. Stop that nonsense before begging for a tax increase for roads.
Comment by Arthur Andersen Wednesday, May 21, 08 @ 9:32 pm
GARP, if you’ve seen or bothered to look at the data, you would understand about the moderate level of our taxes relative to other states. I agree it’s wrong that pensions aren’t taxed, at least above a certain level.
Comment by steve schnorf Wednesday, May 21, 08 @ 11:38 pm
all i can say is that instead of complaining about everything the legislature is trying to get done on a positive note, why dont you all take some action and get in there and hammer out some facts. the capital plan will generate a ton of jobs for the duration of the plan. not just in construction, but other area’s as well. since this gaming bill is involved, that would secure over 40,000 jobs alone that are tied to horseracing in the state. let’s face it you “same old same old” people. we live in a new era. every other state that offers horseracing has slots now. they have moved into the new millenium. why has not illinois? let’s see here, 700,000 jobs in capital plan, over 40,000 in horseracing. that is pert near 750,000 jobs. that alone would boost the economy nicely. get off your butts, wake the hell up, and get this thing done before you adjourn. dont be afraid to work hard for the future of illinois.
love, boogie
Comment by boogie Thursday, May 22, 08 @ 8:05 am