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Question of the day

Thursday, May 14, 2009 - Posted by Rich Miller

* I’ve been telling subscribers about this list of possible revenue sources for the capital bill all week…

* Ending the diversion of money from the Road Fund to the general fund.
* An increase in vehicle registration and licensing fees.
* A tax increase on wine and spirits. (Beer would be excluded from the increase.)
* A tax increase on candy.
* Applying sales tax to some sweetened tea and coffee beverages, as well as health and beauty products.
* Internet sales of lottery tickets and having a private firm manage the lottery with a focus on appealing to new players.

That “tax increase on candy” is actually just applying the sales tax to candy. It’s currently exempted along with other food. Ending diversions from the Road Fund would mean either cutting programs or coming up with money elsewhere in the budget. Not mentioned above is legalizing video poker, which is starting to move through the House.

Nothing is currently set in stone, however. This is just a menu at the moment, but the four legislative leaders have at least set the menu.

* The Question: Which of these capital plan revenue generators is acceptable to you? Explain.

       

29 Comments
  1. - North of I-80 - Thursday, May 14, 09 @ 11:38 am:

    Candy, alcohol & lottery get my vote IF IF we increase taxes during a recession/near-depression.
    Rather than tax [punish] healthy, productive avenues, let’s keep the punishment to the things that hurt us and cost the state $$$$ in crashes & health care.

    My vote is for cutting spending 1st [like all of the rest of us have to do]. As long as we are paying able-bodied school drop-outs to receive welfare, free public food, free housing and sell crack all day long from the street corners, we can cut spending.

    It is the job of elected government officials to spend our tax dollars wisely… building up during good times and digging into those surpluses during bad times. They blew it repeatedly and come back to us for more money after they mismanaged what we gave them already.
    Remember The Ant and the Grasshopper?


  2. - enrico depressario - Thursday, May 14, 09 @ 11:43 am:

    None of them. A state that’s bust has no business rolling out another goodie grab-bag (think Build Illinois, Illinois First) and in the middle of the recession the state has no business raising any taxes whatsoever. Let’s see that Doomsday budget. Doomsday sound more like relief to most of us who do not feed at the public trough.


  3. - Captain Flume - Thursday, May 14, 09 @ 11:44 am:

    Candy, soda, and snack foods would all be okay with me. Actually, an increase to 2% overall on groceries would not be unreasonable. A wine, spirits, AND beer tax increase would okay with me too, with a stiffer tax on those beverages whose brands are owned by foreign companies.

    Wasn’t there a big brouha about privitization of the Lottery over the past few years? I still that idea is a bad one.

    Vehicle fees are already pretty steep, I think. If there is an increase, I would hope it is no more than a couple percent, and not for capital revenue in any event.


  4. - 47th Ward - Thursday, May 14, 09 @ 11:47 am:

    Not only would I support any of those revenue proposals, I support all of them. The least attractive is the Road Fund, since that will put more pressure on the GRF. But since this is to fund capital, which will lead to job creation and have a generally stimulative effect on Illinois’ economy, it will soften the impact somewhat on raising the income tax to fund the operating budget.

    It goes without saying that we need to cut wasteful and ineffective programs, and can no longer spend beyond our means. The bill has come due for Illinois. Raising taxes in the middle of a recession is not a good idea. But the fact is, we ignored the revenue problems when the economic climate was much better and we’re in a very bad situation because of it.

    Plus, I suspect to fund the type of major capital bill we’d need, we’ll need all of those revenue streams plus maybe an increase in the gasoline tax too.

    I’m not a fan of taxes any more than anyone else, but this is the reality. I fully support any and all ways to reduce waste, fraud and inefficiency and I’ll be voting for those candidates willing to make the tough decisions on spending.


  5. - Ghost - Thursday, May 14, 09 @ 11:49 am:

    * Ending the diversion of money from the Road Fund to the general fund.

    I would support that, the diversions should have not occured in the first place. Although this is not a revenue generator, is actually makes a hole in GRF.

    * An increase in vehicle registration and licensing fees.

    I am ok with this as well, but I would actually look to some other tax sources first.

    * A tax increase on wine and spirits. (Beer would be excluded from the increase.)

    I think these type of vice/sin taxes are a bad idea generally. Inplace of increasing the existing tax, I would prefer to look at some new tax sources i will discuss below.

    * A tax increase on candy.

    I support this, but it does not go far enough. let return the sales tax to food as well. No one noticed when it was removed, lets put it back. Addtionaly, I would add sales tax to services.

    * Applying sales tax to some sweetened tea and coffee beverages, as well as health and beauty products.

    I think this is a good idea, I would icnrease the items covered by the sales tax before increasing fees and taxes that already exisist.

    * Internet sales of lottery tickets and having a private firm manage the lottery with a focus on appealing to new players.

    The internet sales is an excellent idea, as are the subscriptions. I would support privitization only if the company was allowed to base its earning off of revenue gernated above and beyound what the state can do on its own. The State has seen a steady 3-5% increase on lottorey from its own activites, and should continue to recieve at least this level of money going foward. If a private company can get that ioncrease over 5%, and its earning are limited to making lottorey produce more then the state oculd, I support it. Otherwise its just a scheme by which we are giving away billions and billions of future earnings for quick cash up front. The very scams of short term cash that have lefts us where we are.


  6. - Steve - Thursday, May 14, 09 @ 11:50 am:

    Raising taxes in a recession only prolongs the downturn.Places like Chicago will take a lot longer to recover.


  7. - chimack - Thursday, May 14, 09 @ 11:50 am:

    No increases in taxes unless there is a comprehensive ethics law passed and real budget cuts. And then, dear voters, we agree to vote out all incumbents. Put a binding referendum for recalls and term limits on the ballot. And the next time the CON CON is on the ballot don’t let the powers that be get away with screwing up the vote. Finally, legalize/decriminalize and regulate drugs (like alcohol). There would be new tax revenue and less expense for cops, prisons, and prosecutors.


  8. - Rich Miller - Thursday, May 14, 09 @ 11:52 am:

    chimack, we’re talking capital bill here, not the budget. Stick to the topic, please.


  9. - Third Generation Chicago Native - Thursday, May 14, 09 @ 11:58 am:

    I would support the candy tax increase, and on certain health and beauty (i.e. lotions, but not over the counter)

    I buy unsweetened tea and have the regular sales tax (non-food) applied to it. Maybe because it is bottled single serve, by a soda bottler? I have also bought flavored water that is taxed higher, so I would not support an additional increase on these.

    Illinois already has a tax on soda, sweetened tea, coffee

    Would the costs involved with marketing (appealing to new players) cut into the profits on the lottery?

    Would the cost of internet sales cut into the cost of the lottery?

    It depends on how much the above would cut into the profits on the lottery if I would support them.


  10. - Six Degrees of Separation - Thursday, May 14, 09 @ 11:59 am:

    * Ending the diversion of money from the Road Fund to the general fund.

    OK - it’s about time to end these diversions that never should have happened.

    * An increase in vehicle registration and licensing fees.

    Ouch - this is gonna hurt our multi-car family, do it but be gentle. And don’t tell me to use transit, walk or bike - neither is practical where we live.

    * A tax increase on wine and spirits. (Beer would be excluded from the increase.)

    OK, Boone’s Farm and Mad Dog will still be cheap after taxes.

    * A tax increase on candy.

    OK with me - it’s not that good for you anyway.

    * Applying sales tax to some sweetened tea and coffee beverages, as well as health and beauty products.

    They should all be taxed at the normal sales tax rate.

    * Internet sales of lottery tickets and having a private firm manage the lottery with a focus on appealing to new players.

    OK - time for the lottery and Metra to join the 21st century.


  11. - Capitol View - Thursday, May 14, 09 @ 12:06 pm:

    To Ghost, 3rd Generation, Six Degrees and others:

    The Illinois Lottery is already is the hands of a private company, administering the program for the state. I am always amused when people call for turning it over to a private company, even splitting the additional revenues with that company, for doing a better job.

    State government claims to demand accountability. Why are we not demanding better sales revenues from the current provider, and putting that contract out to bid based on higher performance standards?


  12. - dan l - Thursday, May 14, 09 @ 12:10 pm:

    * Ending the diversion of money from the Road Fund to the general fund.

    -Acceptable: I’m sure there’s money that can be cut from the Road fund.

    * An increase in vehicle registration and licensing fees.

    -Unacceptable. Motorists already pay through the nose for registration and licensing, as well as other government induced fees on gas taxes, city stickers, insurance, yada yada. Find another cow to milk.

    * A tax increase on wine and spirits. (Beer would be excluded from the increase.)

    -Unacceptable. Again, find another cow to milk.

    * A tax increase on candy.
    -Acceptable. But who buys candy anymore?

    * Applying sales tax to some sweetened tea and coffee beverages, as well as health and beauty products.

    -Unacceptable. Again, why are we trying to make consumers have to pay more when they go grocery shopping?

    * Internet sales of lottery tickets and having a private firm manage the lottery with a focus on appealing to new players.

    -Acceptable. I’d think there would have to be a ton of oversight on any private firm that runs the lottery though.


  13. - Anonymous - Thursday, May 14, 09 @ 12:23 pm:

    Rich,

    I hate to disagree with you, but the capital package is part of the budget, passing a capital program takes potential revenue away from the total budget. I support a capital plan, but it has to be considered with the total fiscal obligations of the State. Politicians in Illinois have for too long confused the issue by buying votes for targeted spending and ignoring the real fiscal responsibilities. Hence $11 billion deficit.


  14. - Rich Miller - Thursday, May 14, 09 @ 12:27 pm:

    Check out the comment I was responding to, Anonymous. It was all over the map.


  15. - Pot calling kettle - Thursday, May 14, 09 @ 12:33 pm:

    Preferred:
    1) Ending Road Fund diversion == step 1 in putting the fiscal house in order. This needs to be done anyway.
    2) Increase in vehicle registration and licensing fees == I’m not fond of this, but there is a relationship to use. Better would be to raise the fees for all but the first vehicle in a household. That would be less regressive.

    Acceptable:
    1) A tax increase on wine and spirits. == There’s got to be a limit to how many times we can go here for money, but fine.
    2) Video Poker == a new source that is a nice little chunk of change. This is as good a spot for it as any.

    No go:
    1) A tax increase on candy & Applying sales tax to some sweetened tea and coffee beverages, as well as health and beauty products. == I am opposed to diversions and if we are increasing sales tax on something, it should be more broadly applied. Sales taxes should be spread out to services first, then “junk” food. Sales tax on food is regressive and not the best idea in this recession.
    2) Internet sales of lottery tickets and having a private firm manage the lottery with a focus on appealing to new players. == IF we can increase lottery sales, the additional funds should go where all the other lottery funds go. (GRF or schools, however you choose to see it, but not to a capital plan.)


  16. - One of the 35 - Thursday, May 14, 09 @ 12:35 pm:

    Rich: I think all items listed are valid funding sources for a needed capital bill. What is the reason that beer is not included? Why not include it?


  17. - Rich Miller - Thursday, May 14, 09 @ 12:39 pm:

    ===Why not include it? ===

    “Joe Sixpack.”


  18. - OneMan - Thursday, May 14, 09 @ 12:48 pm:

    ==Internet sales of lottery tickets and having a private firm manage the lottery with a focus on appealing to new players.==

    Would they be allowed to do some targeting that is currently not allowed?


  19. - Chicago-Dem - Thursday, May 14, 09 @ 12:59 pm:

    Erico is correct…we’re in a recession, for those who don’t know people are being laid-off and a lot of people are attempting to save money everywhere they can…and you want to TAX them…PLEASE get off this mind set!


  20. - Legaleagle - Thursday, May 14, 09 @ 1:20 pm:

    None. No capital bill during a recession when the state is broke. No new spending. Put it off another year.


  21. - SUPERDAD - Thursday, May 14, 09 @ 1:43 pm:

    Candy isn’t taxed?? Since when? Go buy a Snickers and see if it gets taxed.
    And what other food is exempt? That’ll be my new diet plan!


  22. - Rich Miller - Thursday, May 14, 09 @ 1:54 pm:

    ===And what other food is exempt?===

    That comment is a perfect example of what I’ve been saying for months.

    Politically, it does no good to exempt certain items or classes of people from taxation. Most voters just don’t know that they get the exemptions.

    Food has been exempted from the state sales tax since the Thompson administration.


  23. - Rich Miller - Thursday, May 14, 09 @ 2:01 pm:

    …And so has medicine.

    I wonder if “superdad” knows that.


  24. - Ghost - Thursday, May 14, 09 @ 2:16 pm:

    Capitol View said:
    === The Illinois Lottery is already is the hands of a private company, administering the program for the state. ===

    No it is not. It is part of the Dept of revenue and operated by public employees.


  25. - Pelon - Thursday, May 14, 09 @ 2:29 pm:

    There is a statewide sales tax of at least 1% on food and medicine (including prescriptions). This tax is distributed to the local governments, but it is still collected by the IL Department of Revenue.


  26. - chimack - Thursday, May 14, 09 @ 5:33 pm:

    Checking back in at the end of the day. Sorry to go outside the box of alternatives you presented.

    In a more perfect Illinois legislature, elected officials would understand that the public is very unhappy and would attend to passing a reform bill that would make a difference. (I know that the current legislators don’t want to do this because it is not in their self interest.)

    Then we need new legislator who will not be in the pockets of lobbyists/businesses/contractors et.al. These cozy relationships are connected to the budget process because they can drive the costs up. Thus my call for a dump the incumbents campaign.

    (I’ll concede my CON CON comment was far afield)

    And if we need to find new revenue sources why must we only consider the alternatives presented to us by the “brain trust” that has created the problems the State of Illinois faces. Lets be bold and tackle new revenue at the same time as we cut expenses. And that is something the decriminalization/legalization of drugs would do.


  27. - wordslinger - Thursday, May 14, 09 @ 7:40 pm:

    Candy’s not taxed? I didn’t know that. I’m all for taxing it and any sweet or salty snacks before anything else. Low hanging fruit, so to speak. There’s probably a good chunk of change there.

    Who knows? It might be bigger than video poker, which from what I’m fascinated every day to learn on this blog, is an enormous, tax-free, statewide, illegal enterprise that local, state and federal law enforcement are quite content to ignore.

    If you’re in on it, it has to be awfully good. In Springfield, they’re talking about spending cuts, pension cuts and income tax increases. But everybody knows about video poker and the state doesn’ get a dime!

    In Cicero, they call that official corruption and organized crime. What do they call it in Centralia?


  28. - Pot calling kettle - Thursday, May 14, 09 @ 8:28 pm:

    To those of you saying “no, not in a recession,” a few points:

    1) The recession has hit construction especially hard, so a solid capital bill will put people back to work

    2) most of the sources listed will not hit the laid-off worker (stopping the road fund diversion is not new revenue and most of the others are optional purchases)

    3) continuing to put these projects of has a greater cost in the long run since the roads will still need to be repaired, etc. In fact, no is a good time to start since labor and materials costs will be stagnant, we can get a good rate on the bonds.


  29. - Six Degrees of Separation - Thursday, May 14, 09 @ 9:24 pm:

    What do they call it in Centralia?

    Roland Burris.


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