Another one-chamber budget?
Thursday, Jul 26, 2007 - Posted by Rich Miller
* The Senate Democrats are talking about passing a budget of their own this week…
Meanwhile, a key budget negotiator for the Senate Democrats said his caucus is crafting its own full-year budget that they hope to pass by the end of the week and send to the House. Even some Democrats said the proposed spending plan is unrealistic, though, since it is balanced using revenue from a massive expansion of gambling that is stalled in the House. […]
“Something will be done before the end of the week,” pledged Sen. Donne Trotter, D-Chicago, a key budget negotiator for the Democrats. “It will be a balanced budget based on revenue streams that have already been passed or will be passed.”
That includes more than $2 billion from a massive expansion of gambling in Illinois. The Senate approved the expansion — which adds new casinos and allows existing casinos to expand — but the House has not taken up the bill. Madigan has said he doesn’t think the House will pass an expansion bill that includes new casinos.
Trotter said the Senate Democrats’ plan will increase school spending by $900 million, fully fund pensions and pay raises and provide additional money for Medicaid payments.
“We do not anticipate needing Republican votes (to pass it),” Trotter said.
* But the Sun-Times has the real story on its chances, as well as the prospects for the governor’s health insurance plan, which aren’t exactly great…
But Sen. Martin Sandoval (D-Chicago) indicated he likely would not support the Jones-crafted spending plan as configured if it was “not a compromise budget that we can send to the governor.”
Sen. Louis Viverito (D-Burbank), an ally of Madigan whom Jones kicked out of leadership meetings, said he would be another no vote on a Jones budget.
“The budget he’s proposing is unrealistic. It’s a fairy tale,” said Viverito, who was angrily confronted on the Senate floor by Jones after Viverito made his views known during the private Democratic meeting.
The votes also appear well short of what is needed in the Senate for Blagojevich’s less-expensive, health-care plan. Legislative sources said the $1.2 billion plan has only about 25 votes in the Senate. Thirty are needed to pass it to the House.
Capitol Fax reported on that 25 figure yesterday, but the governor’s people insist they’re getting closer to passage. We’ll see.
* And speaking of that health insurance plan…
Meanwhile, a stripped-down version of the governor’s health care expansion plan won approval in a Senate committee. It would cost about $1.2 billion, down from its original $3 billion.
The plan would levy a 3 percent tax on businesses that spend less than 4 percent of their payroll on health insurance.
Opponents said it would hurt small-business owners whose margins may be too small to pay for the program.
State Sen. Bill Brady, R-Bloomington, scolded supporters for not offering enough details about how the plan would work.
“You can’t even tell me how many businesses you’re going to tax?” he asked.
Oy.
- Arrogant Bunch - Thursday, Jul 26, 07 @ 9:20 am:
Illinois State Legislature, Illinois Constitution who needs them. Governor Blagojevich certainly doesn’t. He likes things to be vague.
Making deals with Governor Blagojevich is like making deal with the devil.
- maybe? - Thursday, Jul 26, 07 @ 9:24 am:
““You can’t even tell me how many businesses you’re going to tax?” he asked.”
I love when lawmakers play this game – you see it all the time in Congress. They find someone they know doesn’t know the answer, and then ask them the on-the-spot questions.
That way, you can make it look like nobody knows the answer!
- Ghost - Thursday, Jul 26, 07 @ 9:28 am:
Maybe this senate budget is a smoke screen. Madigan has the real budget completed (or almost there) and veto proof support. BUT to save a little face, and to try and donwplay the coup effect for madigan, the Senate tosses out a budget which they know won’t make it. Then when madigans budget comes about they declare it is a compromise on the Senate proposal, or however they spin their throw away. They never intend it to go through, but they want somehting out there before the madgian plan passes.
- Bill - Thursday, Jul 26, 07 @ 9:40 am:
Here we go again with the sky is falling approach by business lobbyists and their mouthpiece Brady.
If their margins are too small to provide 3% toward their employees health care than they can’t afford to be in business. Close up and get a better job if you can or move out of state (Hit the road as Rod would say).
They said that they would all be broke by now because of the minimum wage increase. That didn’t happen. It won’t happen as a result of this minute tax either.
How many times are they going to cry wolf?
Take a little less profit and help provide for the people who do the real work and make your business venture possible.
We have the sixth richest state in the nation. Let’s try to provide a little security for our hard working citizens.
- Squideshi - Thursday, Jul 26, 07 @ 9:42 am:
A one chamber budget, huh? Maybe we only need one chamber! Here’s for a unicameral legislature. Abolish the Senate!
“Opponents said it would hurt small-business owners whose margins may be too small to pay for the program.”
You know what would really be a boon to small businesses? Single-payer universal healthcare!
- zatoichi - Thursday, Jul 26, 07 @ 9:43 am:
Is there an actual copy of this new health plan available or is it a concept idea to be filled in later?
- Bluefish - Thursday, Jul 26, 07 @ 9:44 am:
Since this is the direction Jones wants to go, what is his fallback if he cannot get enough of his own members to back the budget? Seems to me he comes out of this process looking pretty vulnerable if he fails.
- Downstate - Thursday, Jul 26, 07 @ 10:01 am:
Bill,
I’m just curious, have you run a small business before? I have started four different businesses in the past 15 years.
I have one company, a machining firm, that has brought 3% to the bottom line in the last ten years exactly twice!
How many businesses are you involved in? What % of their top line gross do they bring to their bottom line? I’ve used the car dealers as a perfect example. An average car dealer sells $20 million in product. And 75% of them lost money last year. Now under this proposal, if a car dealer doesn’t pay over $800k (4% of top line revenue) in health care dollars, they are responsible for another $600,000 in state taxes.
Since you have such great insight into the business community, I would appreciate knowing what you’d recommend for the car dealer in the above scenario. I look forward to your response.
- maybe? - Thursday, Jul 26, 07 @ 10:07 am:
Downstate - you are woefully wrong.
it is 4% of payroll, not 4% of revenue.
Car dealers don’t have $20 million in payroll.
- Southern Right - Thursday, Jul 26, 07 @ 10:18 am:
maybe? It’s yet another tax on business. I just don’t know all these people well enough to have their hands that deep in my pockets. Maybe they can just live on what they already get or on 3 percent less. Bill howabout the state reducing their spending by 3 percent.
- madman - Thursday, Jul 26, 07 @ 10:27 am:
maybe? - Please note that your friend Bill is the one who started the exhange about “margins” and 3%. Downstate’s response to that diatribe is perfectly on target.
Quote for the day….(and a message for the four leaders?)
“Never wrestle with a pig. When you do you discover two things. First…you get dirty. Second…the pig likes it.”
George Bernard Shaw
- Bill - Thursday, Jul 26, 07 @ 10:47 am:
It is not a gross receipts tax. The 3% of payroll is much less than most businesses with a conscience spend on employee health care. This tax will only effect those that try to get off cheap to feather their own nests at the expense of their employees. Don’t be so greedy. By the way, I never met a poor new car dealer. The way the game is rigged between the dealers and manufacturers they could sell every car at a “loss” and still make a more than adequate profit. Even after they pay for their employees’health insurance.
It is time for business people in this state to live up to their social responsibilty.
- Bill - Thursday, Jul 26, 07 @ 10:50 am:
Downstate,
Your argument has absolutely nothing to do with the proposed health insurance tax. You better call Greg Baise for some new arguments.
- Logical - Thursday, Jul 26, 07 @ 10:53 am:
Regarding Bill’s comment about minimum wage and Brady. One of the arguments was that the cost could be absorbed by all of these rich business owners, but the reality is that is was passed on to the consumer. My Mcdonalds lunch meal has increased about 9% since this was originally passed and signed. It is time that everyone realized that business does NOT pay taxes. As a small business owner for over twenty years, I must generate “X” to survive. If my taxes or any other cost input increases, then I must charge more for the product to absorb the increase. It is true that it is a generally delayed cost increase, but it eventually is raised. Large businesses are no different other than they might lay off some citizens to reduce costs.
- Rich Miller - Thursday, Jul 26, 07 @ 10:53 am:
Downstate, it’s a payroll tax, not a grt. Bill is right. Give it up.
- Bill - Thursday, Jul 26, 07 @ 11:05 am:
“It is time that everyone realized that business does NOT pay taxes.”
I agree or at least they don’t pay enough taxes.
“I must generate “X” to survive.”
I don’t think the bill taxes the X. It is a small tax for businesses that don’t contribute a minimal amount for employee health insurance. Studies show that as the number of uninsured decreases so will everybody’s cost. The savings to the state will be tremendous.
If all employers would do the right thing and provide some health insurance there would be no need for the tax.
If you won’t pony up for the insurance I guess you will have to pay the 3% and maybe settle for a BMW instead of a Mercedes.
- Downstate - Thursday, Jul 26, 07 @ 11:11 am:
Bill,
I’ll ask the question again - have you ever run or owned a business?
- Logical - Thursday, Jul 26, 07 @ 11:19 am:
It is time to get real. YOU pay business taxes! I have been reading this site for about a year and I occasionally read the comment sections (especially regarding taxes) and cannot believe the number of commenters that think taxing business is “getting” the man. It is not, it is getting the consumer. BTW if I did or wanted to drive a Mercedes (actually I do drive a 1973 240D model), increasing my taxes would not have any affect (please read previous post), but it might affect your ability to drive one as I will need to increase your cost of doing business with me.
- Bill - Thursday, Jul 26, 07 @ 11:47 am:
Logical,
Competition, my friend. There will always be someone trying to do or sell whatever it is you do better and cheaper. If there isn’t then you’ve got my money to help your employees. They are welcome to it.
- Waiting for a train - Thursday, Jul 26, 07 @ 11:57 am:
The Senate and House budget process will not be complete until we get to the night before the final deadline, when the Latino and Black Caucuses suddenly will pop out and say they need a little more something-or-other in exchange for their votes to pass it. Blago will be sweet-talking them the whole time to steer these “extras” so Blago gets more of what he wants. You can set your watch by it.
- Southern Right - Thursday, Jul 26, 07 @ 12:12 pm:
If a business owner chooses to hire someone and not offer benefits, they may very well lose that employee when their competitor with benes steals them. That’s the business owners choice, not anyone elses, even our Governor of the MIDDLE CLASS.
- VanillaMan - Thursday, Jul 26, 07 @ 2:17 pm:
The number of Democrats that have been businesspeople is a smaller number than the number of Republicans in Cook County.
Democrats won’t be happy unless no one makes a profit, operates all businesses at losses, and provides nothing but free products and services. They want every worker to be paid a living wage and be unionized. They want every wage taxed at the highest possible, so that their cycle of economic stupidity continues. They don’t want to have too many children, so they don’t grow the next generation of taxpayers for their socialist fantasies.
In short - don’t expect a nut like Bill to understand basically anything that requires addition or subtration. Numbers are just talking points to him, while it is reality to normal people.
Not only do we have a single chamber budget that relies on imaginary funding sources, we have a single party single chamber budget that relies on imaginary funding sources.
Face it, lets replace these nitwits with your average Girl Scout Troop. They do a better job understanding economics 101, and are a lot more honest with the purpose of the cookies they sell.
- Yellow Dog Democrat - Thursday, Jul 26, 07 @ 2:29 pm:
If your business is only generating a 3% profit, you should sell it, put your money in treasury bills, and play golf.
- Bill - Thursday, Jul 26, 07 @ 2:43 pm:
nut????????
- Ghost - Thursday, Jul 26, 07 @ 2:45 pm:
if a business does not have enought money to pay 3% of its PAYROLL, then it has larger problems to its sutained future then this tax.
small buisness profit is an oxymoron anyway. Take my cousin who owns a few harley davidson dealerships. The dealership pays for his expensive vehicles, his trips, buy him sales incentives (72i plasama screen tv) pays him a very generous 6 figure salary, plus bonuses. BUT it has little to no profit. All of the above are expenses of the buisness. At the end of the day he gets in his compnay owned viper, goes home to his compnay owned house, and the business struggles to remain profitable. But the business has more then enough to cover 3% on its payroll to provide health insurance.
If the payroll is a great yardstick for this tax. A struggling business will have low payroll (inbcluding the woners salar) so the extra cost will be very small. A buisness that hides its profits in the woners salary, but declines to provide benefits, will face a larger payment.
- Downstate - Thursday, Jul 26, 07 @ 2:54 pm:
YDD,
Please read Vannilla Man’s post just above yours. You apparently don’t know the difference between the business profit margin and interest one might earn on an investment in a CD or stock pick.
If I own a business that sells widgets, and I have total revenue of $2,000,000. I then subtract the cost of the widgets (say $1,250,000) to arrive at my gross profit margin - $750,000 (or 37.5%). I must then subtract my operating costs (Labor, rent, taxes, fees, utilities, etc.) to arrive at my net income. Let’s say I have $650,000 of operating costs. I would then have a net income of $100,000 on $2,000,000 in sales. This would mean I’m bringing 5% ($100k/$2million) to my bottom line.
This 5% net income margin has no comparison to the return on a CD. Rather the business investment is made based upon what one would pay to buy a business that generates $100,000 in net income each year, not what margin it brings to the bottom line.
Your’s is an apples to oranges comparison. I would suggest you stick to investing in CD’s and the stock market. It also allows you to continue to bash businesses without having to have any actual knowledge or experience.
- zatoichi - Thursday, Jul 26, 07 @ 3:31 pm:
Two items for the new health insurance option being voted on:
1. Does the new plan account for employees covered under a spouse’s plan from another employer? 33% of our employees choose to go with their spouse’s plan who work for much larger organizations and can offer cheaper rates. Do these people come off our total salary to figure the 3% target?
2. Most of our employees have chosen single coverage and we are still well above the 3% target. In our plan all dependent coverage is paid 100% by the employee. In the original Illinois Covered package, dependent coverage (read family) was not mandated. Who will cover dependents under this new plan? I do not see where the volume of dollars needed to pay for this plan are going to come from if family/dependent coverage is included. It will have to be a very bare bones plan to be affordable with tight dollars.
- Downstate - Thursday, Jul 26, 07 @ 4:04 pm:
Ghost,
I would be stunned if your cousin is living in a “company owned house”. The IRS should be crawling all over him any day now. If he’s taking business deductions for personal expenses he’s also liable for tax fraud.
- Arthur Andersen - Thursday, Jul 26, 07 @ 4:08 pm:
It’s quite apparent that most of the commenters here have never ran a small business or faced the challenge of meeting a payroll. 3% of payroll is not chump change to many small businesses. It’s very easy to say “they can afford 3%” or “shut it down and play golf” when you aren’t staring at a workforce that you count on every day.
- Lovie's Leather - Thursday, Jul 26, 07 @ 4:08 pm:
More payroll taxes is just an incentive to have less payroll, whether it be less workers or less pay for workers. Why is that good for these “hard working people?” The government says we are going to make it harder for your employer to pay you more money, and the socialists celebrate it. Just goes to show you that they would rather see the end of the private sector instead of more money for workers.
- Bill - Thursday, Jul 26, 07 @ 4:27 pm:
Downstate,
You forget all the perks and salaries that owners/managers suck out of the companies under the guise of the cost of doing business. Cars, expense accounts, 6 or 7 figure salaries, etc. make your numbers less than meaningless.
AA,
If you really valued that workforce that you stare at everyday you would be providing them some help with their health insurance and therefore would be expemt from the tax.
- Rich Miller - Thursday, Jul 26, 07 @ 5:02 pm:
“LL,” calling a commenter here a “fascist” gets your post held for moderation automatically. Calling them a fascist repeatedly can get you banned. My advice: Stop.
- Huh? - Thursday, Jul 26, 07 @ 8:25 pm:
Bill - you never answered the question about running a small business. Please answer the question.
- Lovies Leather - Thursday, Jul 26, 07 @ 10:02 pm:
Well Rich, you can obviously see why I stopped commenting here frequently. It was a snide remark to see how Bill could respond to that. I did not call Bill a fascist. I said it must be hard to be a socialist and a corporate fascist. Since you seem to be a message fascist, I will never comment here again and will never read again, either.