Tax hike react
Thursday, Mar 19, 2009 - Posted by Rich Miller
* Individual taxpayers aren’t the only ones upset with Gov. Quinn’s tax hike plan. Business is furious…
“If this plan were passed, Illinois would have the 5th highest corporate income tax rate in the nation, though we would be close to tied for second. Illinois at 9.7% would be surpassed only by Iowa at 12%, Minnesota at 9.8%, Pennsylvania at 9.99%, and DC at 9.975%. (All three of these states have graduated taxes, but the rates shown are the highest rate for that state.)
“This, in combination with lost incentives, would be one more reason for employers to look elsewhere to avoid Illinois’ long‐standing anti‐business climate.”
* Speaker Madigan was noncommittal…
“I would say that before we move forward on any tax increases, Illinoisans want to know how we’re going to clean up Illinois government,” said influential Illinois House Speaker Michael Madigan, a Chicago Democrat, in an interview with a downstate public television station.
* Senate President Cullerton was more direct…
“With an $11.5 billion deficit, it’s very likely there will have to be a tax increase,” said Senate President John Cullerton, a Chicago Democrat.
* The other Democratic statewide officials were, predictably, less than enthusiastic…
“If taxes are needed to raise more revenue, I’m deeply worried about hurting the middle class, who are struggling,” said [Attorney General Lisa Madigan], the daughter of the House speaker. “And so all steps should be taken to make sure that their taxes aren’t increased.”
Treasurer Alexi Giannoulias, who is exploring a bid for the U.S. Senate next year, said that if the public is asked to “make more sacrifices” in paying higher taxes, “property-tax relief is essential.” An aide to Comptroller Dan Hynes, who also is looking at moving up the political ladder, called the budget plan “a starting point.”
Secretary of State Jesse White, who is looking at running for a fourth term, noted Quinn’s call for higher fees on motorists and said, “Within my [driver’s licensing] facilities, I have a disclaimer to remind the people that I didn’t do it.”
* The Sun-Times makes a forceful case…
This page has already expressed support for Quinn’s deeply unpopular income tax increase.
No one wants it, but Illinois needs it desperately. For years, state revenue has not matched expenses — and not simply because of reckless spending.
* Zorn smacks down Rod Blagojevich’s recent criticisms…
But for many years, Blagojevich had been running up a tab at Café Illinois without having the money to pay for it—using budget gimmicks and deferred payments to disguise that the state was spending and creating financial obligations lots faster than money was coming in.
“He was maxing us out on our credit cards,” said Laurence Msall, president of the Civic Federation, a tax-policy watchdog organization. “He never fixed the structural problems that are compounding this current economic crisis.”
In a WGN-AM 720 interview Wednesday, Roosevelt University political scientist Paul Green compared Blagojevich to an arsonist who sets a house ablaze then complains from the safety of the sidewalk that the firefighters are wasting water.
* And Kristen McQueary blasts the GOP…
Opposing tax and fee increases is the cornerstone of their 2010 campaign strategy.
This stock quote House Republicans sent to the media on behalf of state Rep. Renee Kosel (R-New Lenox) captures exactly what I mean:
“While it is true that Illinois is facing one of the largest budget deficits, turning to taxpayers to get us out of this mess is not the answer. I was hoping that Governor Quinn would have the courage to abort the tax and spend policy of the Blagojevich administration. We need some accountability for the state programs already in existence. We need to re-evaluate, to go back to the table and ask ourselves which state programs are worth funding and which could be eliminated,” Kosel said.
If all we need to do is “go back to the table,” why haven’t legislators done that at some point during the last year as the budget crisis mounted? Instead, they wait for the governor to offer solutions to the state’s problems, and then they excoriate him?
* Democratic Sen. Michael Frerichs does a good job of summing up the no-won situation that Democrats find themselves in here…
“Give me a scenario this year where a Democrat in a tough district wouldn’t be sweating it out,” Frerichs said. “Would I be sweating making billions in budget cuts? Would I be sweating if we were voting again on a gross receipts tax? Would I be sweating if we were talking about expanded gambling at a time when gambling revenues are weak? To those concerned about Democrats in tough districts sweating it out I say, what sort of budget would be easy for us to pass this year? Every month you see declining revenues coming into the state, you realize that this isn’t going to be easy.”
* Republican Rep. Chapin Rose gets a bit hyperbolic, but his response was not atypical…
Rep. Chapin Rose, R-Mahomet, credited Quinn with coming up with a funding source for his spending plans.
“Unlike Rod Blagojevich, who just came up with ideas to spend more money but didn’t suggest ways to pay for it, at least we’ve got a funding source on the table,” Rose said, “but after looking at the (income) tax rates and all the tax increases proposed, the average Joe isn’t going to have anything left for his family to spend after this. The Democrats continue to fail to control spending.”
- Easy - Thursday, Mar 19, 09 @ 10:52 am:
I get the point that the Rod pinata is easy to hit, but c’mon. They guy didn’t do all this reckless spending by himself. MJM and Emil were right there with him skipping pension payments and boosting state spending. Just 8 months ago, Dems admittedly sent him an unbalanced budget and “trusted” him enough to balance it.
Was Rod nuts? heck yeah. But he wasn’t acting alone when it came to the budget, he had some enablers.
- Greg B. - Thursday, Mar 19, 09 @ 10:57 am:
I agree with Easy.
On the other hand, and this would be in response to McQueary, isn’t it the Governor’s job to propose a budget? Isn’t it the oppositions job to oppose it?
- wordslinger - Thursday, Mar 19, 09 @ 11:00 am:
–We need some accountability for the state programs already in existence. We need to re-evaluate, to go back to the table and ask ourselves which state programs are worth funding and which could be eliminated,” Kosel said.–
Ugh, I hope we’re not going to get too much of this obtuse, mealy-mouth stuff. The composition of the GRF is pretty simple, with just a few big spending blocks determined by formula.
If you’re in the GA and you want to cut, like Willie Sutton, you know where the money is. Don’t pretend it’s a mystery that has to be unraveled — make a proposal.
- Carl Nyberg - Thursday, Mar 19, 09 @ 11:02 am:
I’d have more respect for Alexi if he told the truth.
These problems have been building for some time. The mismatch between services we expect the state to provide and annual revenue has been concealed by one-time revenue sources, primarily selling state assets.
Gov. Quinn was thrust into a situation where there was an overwhelming deficit to cover.
Republicans and Democrats who claim the situation can be addressed without a tax increase are simply saying what they think voters want to hear so those politicians can further their careers.
Alexi should call out the hypocrites and opportunists. He doesn’t owe Clan Madigan any favors.
- Plutocrat03 - Thursday, Mar 19, 09 @ 11:11 am:
The State is playing a game that is very similar to the game playing out in Washington right now. Overstate the size of the problem in order for the public to agree on huge tax increases (on the rich of course)
Then they can sit back and continue to do business as usual.
Productive businesses and individuals can and will leave the state as a result of these tax increases. Who will create the jobs that citizens need to pay their bills?
- Ghost - Thursday, Mar 19, 09 @ 11:13 am:
Easy your are actually mistaken. Start with the Gov’s veto power, and then the Gov’s decision to expand or create new programs without funding. Emil Jones sided with Blago to protect vetos and create a lot of the mess. Add to this the Gov’s unchecked use of outside vendors an contractors, and you can lay a lot of the spending straght on the gov.
Madigan was one of the few brave enugh to block the Gov and try to put in limiations on his rulemaking and program expansion powers. There was only so much madigan could do since the senate and the State GOP were behind the Gov.
- wordslinger - Thursday, Mar 19, 09 @ 11:15 am:
–Productive businesses and individuals can and will leave the state as a result of these tax increases. Who will create the jobs that citizens need to pay their bills?–
Pluto, where do you think they’ll go? Where are the utopias, and can they be assured there are markets for their services and labor?
- dupage dan - Thursday, Mar 19, 09 @ 11:16 am:
Not only will the budget be balanced on the backs of “the rich” but also on the backs of state employees. As a state employee I believe that we should share the pain. It looks like services will be cut and budgets will be slashed. Quinn is also asking that state employees will have to pay more for health insurance and take some unpaid time off. All well and good. He also is asking for an increase in pension fund contributions but it appears the underfunded pension problem will not be addressed now. That problem will only get bigger as time goes on. We added more income to the pension several years ago and were promised that the pension fund would be dealth with. Nothing happened. We have no promises now except for the promise to do nothing. Push the pain into the future. Nothing new here.
- Dan S, a Voter, Taxpayer and Cubs Fan - Thursday, Mar 19, 09 @ 11:24 am:
This entire budget disaster is out of control. The powers that be need to go to work with a clean sheet of paper and start from scratch (zero budget). Justify what needs to be spent and then prove to us the taxpayers this is worth our investment. I’m tired of being cheated.
- Easy - Thursday, Mar 19, 09 @ 11:27 am:
Ghost–not really. The cost of rulemaking was under $100 million. Bad–but not apocalyptical. Outside contractors, etc–all that is small stuff.
The problem here is the pensions, and Madigan joined with Emil and Rod in the pension raid and instead of reinvesting the money in the pension system, Madigan-Rod-Emil spent it. That and Medicaid is causing the hardship. everything else is nickel and dimes.
This thought that Madigan was blocking Rod when it came to spending is a nice fairy tale, but not really accurate. And now we are all paying the price.
- Eighty - Thursday, Mar 19, 09 @ 11:30 am:
I’m pretty convinced Quinn is so deep in his populism that he’s willing to make himself a sacrificial lamb for the benefit of the state. Madigan lets it go through, and Quinn is made to take the fall. There is nothing conniving about this man; he really buys into all of this stuff.
Add in some romance and monsters and it’s like a Greek tragedy.
- Central_IL_farm_boy - Thursday, Mar 19, 09 @ 11:37 am:
Every elected official’s comments about Quinn’s proposed budget have been at best disingenuous. It’s always the other guy who is (insert phrase - blocking reform; taxing the little guy; slashing necessary services). As Ghost pointed out, the breakdown of GRF funds is no secret. Want to show the people of Illinois that you are the one to lead us out of the budget wilderness? Offer up a cut in your operations budget — don’t just wait for someone else to propose it! Anyone for a 10% across the board cut in the GA budget for FY2010? Would it make a meaningful difference in the overall budget? No. Would it have meaning as a leadership gesture? Yes. Will it happen? LOL!
- MOON - Thursday, Mar 19, 09 @ 11:45 am:
EASY
What are you thinking? It was Madigan who stood in the way of selling the Lottery and State Building. Just where would the State be now had Blago acted on these wishes. For sure Blago would have Wasted the proceeds from these sales and we would be in even worse shape than now.
- lake county democrat - Thursday, Mar 19, 09 @ 11:46 am:
I can live with a tax hike, but I don’t like that single’s taxes skyrocket and families of four get a tax CUT.
- Easy - Thursday, Mar 19, 09 @ 11:50 am:
Moon-
Reality check here for a minute. Speaker Mike Madigan voted to lease the Thompson Center.
I understand it is confusing when the Madigan’s play their good cop-bad cop game. Not sure which one is Andy Sipowicz.
In terms of the lottery, I’d stay tuned. More on that to likely come from Quinn and Dems.
- grand old partisan - Thursday, Mar 19, 09 @ 11:50 am:
Dan S - AMEN!!
Anyone with two brain cells knows that just because we spent X dollars on something last year doesn’t mean that we have to spend X + adjustment-for-inflation this year. Departments routinely come up with ways to spend (or, more appropriately, waste) what should be their budget surpluses, because if they don’t, they will be appropriately less for next year. This also happens in the corporate world – and corporate leaders know it. That’s why many of us have recently had our bosses insist on increased accountability of our expenses. Why shouldn’t government leaders do the same? They know that this goes on, but they allow it to. This is our money that they are knowingly wasting. Why do we let it happen?!?!
- dupage dan - Thursday, Mar 19, 09 @ 11:55 am:
Moon,
Easy may be a bit off on who was doing what but he is correct that a major issue is the pension fund. Not dealt with in this plan and pushed further down the road. Doesn’t matter if you put a 2 tier system in place for old/new staff. That won’t solve the current black hole the pension is in. The elephant in the room that can’t be ignored.
I agree that if RB had gotten his hands on the lottery we would be in deeper s**t than we are now. Quinn brought his talking/starting points to the forefront. Let’s see what the GA does with it.
- Amuzing Myself - Thursday, Mar 19, 09 @ 12:21 pm:
Couple of things. Easy and Pluto are right that these budgets aren’t made law without getting passed by both houses of the GA. Period. They can scream and holler all they want about how bad RRB was (and rightly so), but that doesn’t change the fact they were part of creating this mess.
McQueary’s attack on Republicans is pretty weak when you look at the reality of what influence Republicans in either chamber have really had in the last several budgets. Sure they can stand up and say cut this, slash there, but the reality is they’re still on the outside looking in - at least until it takes a supermajority in the House.
As much as Democrats and their supporters can’t stand to admit it, the GOP’s weakness these last few years makes it nearly impossible to really genuinely blame them for ANY of these problems. Any attack on the GOP along those lines is what I find disingenuous in this whole ordeal.
They’re not the majority party. It’s not their job to solve this mess. Power has its benefits, but absolute power comes with sole responsibility. This is all a philosophical debate about fundamental government administration. Just because Democrats and liberal journalists don’t agree with the “balance the budget with real cuts” side of the argument doesn’t mean it’s not an option. It’s just not an option when those in power don’t consider it an option.
Families across Illinois and across the country make painful cuts in their own budgets when dire times dictate. Those in power are clearly not willing to do the same. In fact, they’d rather make the little guy’s problems even bigger by driving their jobs out of the state, raising their taxes and continuing to dig the budget hole deeper for future GA’s and taxpayers to deal with.
The GOP is right to dig in their heals against these tax increases. The situation has built up to this through irresponsible governing by the Democrats’ juggernaut for years. Now it’s time to pay the piper, whether they like it or not.
- Legaleagle - Thursday, Mar 19, 09 @ 1:37 pm:
Where does this $11.5 billion deficit number come from? I don’t see it in the figures I’ve seen. It must include new spending. The federal stimulus package for Illinois is about $8 billion. So there is no need for any tax increase.
- CHicago Dem - Thursday, Mar 19, 09 @ 1:56 pm:
The one constant in all the years from Jim Edgar to today, in which the folks in charge dramatically under-funded the pensions at the same time they were sweetening benefits for their supporters, leading to the current mess/crisis: MIKE MADIGAN.
- VanillaMan - Thursday, Mar 19, 09 @ 4:28 pm:
“I would say that before we move forward on any tax increases, Illinoisans want to know how we’re going to clean up Illinois government,” said influential Illinois House Speaker Michael Madigan.
Mr. Madigan is correct. Illinoians will not support paying more for this crappy state government. The General Assembly and Rod Blagojevich has created a fiscal nightmare, complete with corruption, pay-to-play scandals, an anti-business climate, and extremely poor management.
Cook County government is horrific.
Chicago is a mess with corruption scandals making the news nightly.
And the Illinois Democrats, who are in control of these smoldering wrecks of governments, now expect Illinoians to pay even more?
Madigan is right. Not one more dime for the crap that passes for state government in this state. Quinn and the Democratic leadership will not find a golden key to unlock citizen’s wallets without repercussions without first demonstrating a public cleaning of government. Quinn and the Democratic leadership has to lead by example - and they are currently not.
They are only focused on finding more money to prop up this internationally embarrassing farce of a state government!
Fix this mess first!