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Facing up to reality

Monday, Oct 26, 2009

* The State Journal-Register’s Sunday editorial makes a very important - and valid - point about the upcoming election

As the 2010 campaign moves forward, voters should keep one thing in mind: Those candidates who promise you no pain, those who say things can be solved by just making nips and tucks and magically creating private sector jobs — they have just lied to you.

The Tribune isn’t moved

The response of too many Democratic officials at state and local governments in Illinois? Gee, what taxes can we raise to drive away more employers and workers — because you can’t possibly ask us to change how, and how much, we spend.

* My syndicated newspaper column talks about the polling that we discussed last week, with one very important addition which I’ve highlighted below

For the first time since he took office, a new Rasmussen Reports poll of Illinoisans shows that more than half of all voters disapprove of Gov. Pat Quinn’s performance in office.

The poll of 500 likely Illinois voters taken Oct. 14 found that 53 percent disapproved of Quinn’s performance while 45 percent approved. That’s a six-point switch from August when Rasmussen had Quinn’s approval at 47 percent and his disapproval at 49 percent. Back in June, Quinn’s approval was measured at 57 percent, while his disapproval was 41. In April, Rasmussen had Quinn’s approval rating at 61 percent and his disapproval at just 37 percent. There’s an obvious trend.

Quinn’s disapproval rating has been climbing across all demographics this year, including among Democrats. Just 26 percent of Democrats disapproved of Quinn’s performance in June, but 38 percent of Democrats disapproved this month. Independent voters have been a lot more unforgiving. In April, 36 percent of independents disapproved of the governor’s job performance, but Rasmussen’s latest October survey has 59 percent of independents turning thumbs down.

The governor most assuredly was viewed extra positively by voters in the wake of former Gov. Rod Blagojevich’s ouster and the fresh start given Illinois politics. Quinn since unsuccessfully pushed for an unpopular tax increase, has been unable to make good on promises to enact strong campaign finance reforms and also couldn’t balance the budget. The constant crises most definitely are taking their toll, as they are with many other governors around the country.

The poll was taken near the start of the current TV advertising blitz being conducted by Quinn and his Democratic primary opponent Dan Hynes. Rasmussen rated Hynes’ favorables at 46 percent, with 28 percent saying they rated him unfavorably and 26 percent unsure. Quinn’s favorables were 50 percent, with 41 percent saying they had an unfavorable view of him and 8 percent not sure.

The Rasmussen poll also shows Illinois Democrats have a significant advantage in the “generic” gubernatorial ballot, with 43 percent saying they’ll vote for a nonspecific Democrat and 37 percent saying they’ll cast their vote for a Republican candidate for governor. Rasmussen has the national generic congressional ballot at just the opposite, with 42 percent Republican and 37 percent Democratic, but those Illinois numbers may be less strong for Democrats than you might expect in a state that has produced such gigantic Democratic majorities in the past decade.

The Republicans also have a big lead among senior citizens 65 and older, with 40 percent saying they’ll take a Republican ballot and just 33 percent saying they’ll cast their vote for a Democratic gubernatorial candidate. The Democrats have consistently won the senior vote by 10 points over the past two election cycles, so this is a very worrying result for that party and worth a closer look. The poll, by the way, has a margin of error of plus/minus 4.5 percent, but that’s higher for individual demographics.

Meanwhile, a recent Paul Simon Institute poll found that 65.5 percent opposed an increase in the state income tax from 3 percent to 4.5 percent - a proposal pushed by Quinn throughout the year. Less than a third supported the idea. Quinn’s income tax hike plan has been a focal point of Comptroller Hynes’ TV ad campaign, and the Republicans have been salivating at the chance to run against it next year.

Hynes has pushed an alternative plan to raise income taxes only on the wealthy. That proposal wasn’t polled by the Paul Simon Institute this year, but they did poll it last year.

Asked how they felt about “a proposal to add brackets to the state income tax structure so that higher-income residents pay higher taxes,” 66 percent said they favored it. Just 29 percent opposed it, and 5 percent didn’t know.

That’s the only tax hike Illinoisans supported last year, so it’s little wonder why Hynes would favor it this year.

Hynes appears to have the far better political positioning on the tax issue than Quinn and doesn’t have the baggage of incumbency, which is becoming increasingly toxic throughout the nation. But none of it means quite yet that he’ll win the primary. Democratic voters won’t speak until Feb. 2.

I really wish the Institute had polled that question this year.

* Related…

* Municipalities need pension relief: That said, we support a measure currently being negotiated in Springfield that would allow municipalities to delay funding a part of their pension obligations this year with the caveat that the cut in the obligation is no more than a one- or possibly two-year emergency measure while a more permanent solution to the funding challenge is developed.

* Budget cuts raise concern for inmate drug program

* Legislature seeks CTA solutions

* Hearings on transit agency budgets set

* Bring back Southland Caucus in Springfield

* Quinn appoints 3 to state Latino Family Commission

* Quinn names retired Bull B.J. Armstrong honorary youth adviser

* Hynes picking up 2 more union endorsements

- Posted by Rich Miller        

  1. - wordslinger - Monday, Oct 26, 09 @ 10:08 am:

    A sober and thoughtful editorial by the SJR. It’s true that the financial system collapse has exacerbated things, but we didn’t get into this mess overnight. It’s going to take time and some pain to get out of it.

    My, the Trib is full of itself these days. Adopting “Don’t Tread on Me,” is perhaps a little over-the-top, don’t you think? Let’s encourage the Victim Complex rampant throughout the country.

    A little history lesson: the battle cry during the revolution was “Taxation without Representation is Tyrnanny.” The problem is, we’re getting the government we vote for. We want low taxes and more services.

    How do you get that? On the federal level for the last nine years, we’ve borrowed and printed money. On the state level, we’ve conducted a shell game of underfunding future obligations and stiffing vendors.

    Just like Bernie Madoff’s willfully clueless investors, voters were content until it all came tumbling down.

  2. - cover - Monday, Oct 26, 09 @ 10:19 am:

    Of course a majority of voters support raising taxes on high-income people, it’s the classic “don’t tax you, don’t tax me, tax that fellow behind the tree” mentality.

    It seems that the majority of people just don’t understand that (1) the graduated income tax has no chance of actually being enacted, and (2) those high-income people also tend to be the ones who employ those of more modest means. If Illinois were to “soak the rich”, the rich may pick up the ball (that they paid for) and move to Florida or Texas. Then who gets to pay for all these state government services?

    I may be dating myself a bit here, but at least some of you may remember a song called “I’d Love to Change the World” by Ten Years After. This song contains the following lyrics, which fit right in with that poll result: “Tax the rich / feed the poor / till there are no / rich no more.” But then what do you do to feed the poor when everyone is poor?

  3. - One of the 35 - Monday, Oct 26, 09 @ 10:21 am:

    Wordslinger said it as well as it can be said. Unless we are willing to accept the fact that a huge tax increase coupled with dramatic cuts and program and service reductions are necessary, we will never get our house in order.

  4. - Rich Miller - Monday, Oct 26, 09 @ 10:25 am:

    cover, the US has had a graduated income tax for almost a century and last time I checked there are plenty of rich people here. Through the 1950s, we had a top rate that exceeded 90 percent.

  5. - The Doc - Monday, Oct 26, 09 @ 10:28 am:

    Cover, I thought the trickle-down economics theory had been thoroughly debunked. Moreover, the suggestion that the rich will be “soaked” is a wonderful talking point, but not steeped in reality. Yes, the rich will pay more, but to imply that it will result in an exodus of the wealthy to another state is a trite talking point.

  6. - Angry Republican - Monday, Oct 26, 09 @ 10:38 am:

    Ditto One of 35. The only problem with a “tax the rich” is that the people receiving all of the benefits (and likely paying little or no taxes) will always vote to raise taxes on “the rich”. As a sane person, I would support raising taxes on upper income people like myself, but only if benefits are cut for the people in the middle. Shared sacrifice and all that; only way to get things in order and will probably take another 20 years.

  7. - Secret Square - Monday, Oct 26, 09 @ 10:42 am:

    Do any of you know ANYONE of considerable wealth who packed up and moved to another state (or even another country) purely for tax reasons?

    I could see someone who does NOT currently live or do business in Illinois deciding, purely on the basis of taxes, not to move here. That might be a pretty easy decision.

    However, I dunno that someone who DOES already live here would pack up and move — leaving behind their friends, neighbors, regular customers, familiar surrondings, etc. — purely for tax reasons, UNLESS there were also other factors in play (weather, family connections, a job or investment offer elsewhere they couldn’t refuse, etc.)

  8. - VanillaMan - Monday, Oct 26, 09 @ 10:54 am:

    This isn’t a game. The General Assembly has not taken any leadership for Illinois as our fiscal crisis went from a four alarm fire in 2002 to a five alarm fire in 2005. For the past four years the General Assembly and Executive branch have fingerpointed as the problems they ignored expanded to consume every state funded organization and shove them into an ever deepening crisis.

    Illinois was a fiscal tomb before this recession. We would be facing disaster even if the economy didn’t go south. Since 2002, Illinois has been on a steady decline with no one willing to try anything to turn it around.

    So taxes are not the answer. They will not fix what created this mess. The men and women in office have made it quite clear that they are unwilling to change how this government operates in order to make it affordable for it’s citizens. Any new taxes will go to a group of people immuned to reality and content to play political games while the state burns down. They point to a fiscal crisis they created, didn’t address, didn’t solve, and blackmail Illinoisans at a time of record unemployment and recession.

    This government is worthless. We have to vote enough of them out in order for it to gain any credibility. Illinoisans do not believe that the people now in office will handle this crisis in a fair manner. They are unwilling to pay more in taxes. What the poll you refer to says is that Illinoisans do not want to pay more. While they recognize the disaster surrounding us, they are still unwilling to give more to the people who caused the disaster.

    Those who wish to claim that the masses are stupid believe the masses are stupid to begin with. They are not. They are clear on this. No new taxes to the people running this government. Until they see sacrifices being made by the people demanding they pay more taxes, voters in Illinois will continue to say no. Until they see change in Illinois government - no new taxes. Illinois political leaders caused this. No more taxes to the people who caused this. Either they go, or they start cleaning up the messes they caused. Stop berating the majority! Just because you believe in left-wing fairy tales of government goodness, doesn’t mean they believe in right-wing fairy tales of government evil when they demand that our government do something to show that the GA is no longer in the self-induced coma that has lasted since 2005.

  9. - wordslinger - Monday, Oct 26, 09 @ 11:07 am:

    –Illinoisans do not believe that the people now in office will handle this crisis in a fair manner.–

    Illinoisans are the ones who put them there with their votes time and again. The “masses” have been quite content to receive more government than they’re willing to pay for, just as many have been willing to run up incredible amounts of credit card debt for daily expenses. It just can’t last forever.

    No victims here. You get the government you deserve.

  10. - Old History Professor - Monday, Oct 26, 09 @ 11:15 am:

    Great post Rich. Since the late 1990’s the state budget has been a mess and not one political party is to blame. Under both GOP and Democratic control of government the situation has gotten worse and I agree with the sentiments that cleaning house in the State legislature is one way to start, but that just isn’t going to happen. It is one thing to spout off rhetoric about tax increases and government abuses and it is another thing to actually have a plan that does something about it. Say what you will about Quinn, but at least he is out there with a plan that doesn’t pass the buck or celebrate George Bush economics. There will have to be a combination of drastic cuts and tax increases. Our credit card is drying up and the state bond rating can’t keep taking hits. Do any of the GOP candidates actually have a plan that spells out in plain english what exactly they are going to cut??? Education, Prisons, Public Safety…Where is the plan??? There is none. Just rhetoric.

  11. - Bill - Monday, Oct 26, 09 @ 11:26 am:

    Quinn’s “plan” is to raise income taxes and redistribute the a lot of the revenue to those who have a lot of dependents. He also lets business of the hook with a minuscule increase forcing working class citizens to pick up the slack. His giant income tax increase will yield only about $3 billion. So far, he appears unable or unwilling to institute anywhere near the draconian cuts necessary to come up with the other $10 billion needed for a somewhat balanced budget. He also lets business of the hook with a minuscule increase forcing working class citizens to pick up the slack.
    We are in a service economy and we have a manufacturing based tax system. It is time to tax luxury services, adopt a graduated income tax amendment, and make the necessary cuts to balance the budget. This is what the people indicate in the recent polls that they want and that is what they will get with Dan Hynes as governor.

  12. - cover - Monday, Oct 26, 09 @ 11:29 am:

    To clarify, I’m not saying all the high-earners will leave, but some probably will. It’s about 1000 miles from Illinois to the nearest state without an income tax. Secret Square @ 10:42 am, you correctly point out a number of other factors that come into play when someone considers moving away - and those apply to anyone, not just rich people.

    Rich, it certainly is much more difficult for someone to leave the US entirely to avoid federal income tax. But I think it’s fair to assume that when the tax rates were stratospheric (1950’s through 1981), there was very little incentive for anyone in the highest tax brackets to work harder. The Laffer Curve (anyone? anyone?) is a valid principle, though it’s fair to argue what total income tax rate tips the scale.

    I have seen numerous comments elsewhere, including one on SJ-R today, about how the 1950’s were a great time economically despite the high US income tax. Keep in mind that the US was the only major industrial power that didn’t suffer damage to its infrastructure during WWII, so for a number of years, we were the only place to go. By the 1970’s, that was no longer the case, and our industrial base has been eroding ever since.

    Unfortunately, none of the candidates for Governor has convinced me that they have a real plan for post-industrial job growth in Illinois, regardless of the state’s budget situation. While money isn’t the only factor in education quality, outright cuts to education funding almost certainly will hurt future economic growth.

  13. - Old History Professor - Monday, Oct 26, 09 @ 12:37 pm:

    Just to clarify, I have nothing against Hynes. But his plan basically is “elect me governor” then we will sit around and wait while things get worse and then have a statewide referendum on my plan to increase your taxes. You can’t solve this problem by passing the buck and taxing luxury items like “haircuts” and “gym memberships.”

  14. - Rich Miller - Monday, Oct 26, 09 @ 12:41 pm:

    Actually, the “plan” is to pass something on next year’s ballot.

    Also, haircuts aren’t on the list. They’ll never be on the list. Barbers have killed more service tax proposals than any group in human history.

  15. - Bill - Monday, Oct 26, 09 @ 12:49 pm:

    They can tax haircuts at 100% as far as I’m concerned.

  16. - Gregor - Monday, Oct 26, 09 @ 12:54 pm:

    I agree with the prof; Hynes is running the oldest play in the book, something for nothing, and we had six years of that just now. This will be the main dividing point of the campaign and Quinn needs to play the bad cop and stick to his broader-based increase plan, take the heat for it and off the legislators, so they will pass it. If it costs him the election, by his own code and standards he should wear that and wear it proudly. Because he would have done something no other governor in recent memory could, what no other governor had the fortitude to do. Since he got the job by freak chance, this is an honorable, meaningful way to go out, fixing the hole that dropped him in the Big Chair and who knows, maybe people will figure it out after all these years and reward Pat for rolling the hard six and doing what was needed, when it was needed most. Pat, providence has brought you to this point to be that instrument of healing and repair. Go for it and damn the Hynes torpedoes.

  17. - Quinn T. Sential - Monday, Oct 26, 09 @ 1:44 pm:

    [cover, the US has had a graduated income tax for almost a century and last time I checked there are plenty of rich people here. Through the 1950s, we had a top rate that exceeded 90 percent.]

    Rich, what you also neglected to mention here however is that throughout this same period what devolved for the benefit of corporations and wealthy individuals was the increased role and value of the tax attorney.

    Corporate decisions from as far back as I can remember now; (which is getting less and less far, but that’s another story) have been driven not be what is the best business strategy/policy, but what is the best tax policy.

    The same thing happened on the personal side, where the wealthy lobbied for; and many cases received favorable tax treatment in order to diminish their supposed liability through legal exemptions and other approved gimickry that was more grey than black and white.

    Look at the line-up of people that are now re-patriating their money from Switzerland in order to av oid the huge penalties and th potential jail time, now that the bankers there have been forced to pull back the curtain and identify those secret lock-box holders. Those boxes did not fill up over night, but have been filled over decades of time which periodocially resulted in having to get a larger box to put it in.

    The poor were just that; too poor to perceive that they needed either a lobbyist, or a tax accountant/lawyer, they just completed the EZ form and mailed in a check if they didn’t withold enough in advance.

    Perhaps you need to get a Bermuda address for the Capfax, and test the waters. If you can get that boat of yours out of the lake and get it over to the river before the frost is on the pumpkin, then you can spend several months taking it down there to check on your investments there; and the best part is, you can write off the trip and its expenses.

    TAX ADVICE DISCLAIMER: Any federal tax advice contained in this communication (including attachments) was not intended or written to be used, and it cannot be used, by you for the purpose of (1) avoiding any penalty that may be imposed by the Internal Revenue Service or (2) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

  18. - Rich Miller - Monday, Oct 26, 09 @ 2:10 pm:

    ===If you can get that boat of yours out of the lake and get it over to the river ===

    It’s a pontoon boat. Not fit for oceans.

  19. - Studious - Monday, Oct 26, 09 @ 3:07 pm:

    The bottomline is still that Quinn has a plan, and Hynes just has a lot of hot air. Politicians are always going to cry foul when their opponents propose tax increases, but the alternative to Quinn’s plan is literally nothing. Once again Hynes goes on the attack without any foundation.

  20. - anon - Monday, Oct 26, 09 @ 3:13 pm:

    I was at a party over the weekend in the South Suburbs, and most of the people at the party didn’t even know who Dan Hynes is! I see Quinn winning easily–20 points.

  21. - Rich Miller - Monday, Oct 26, 09 @ 3:16 pm:

    anon, the plural of anecdote is not data. Try to keep that in mind.

  22. - wordslinger - Monday, Oct 26, 09 @ 3:18 pm:

    –But I think it’s fair to assume that when the tax rates were stratospheric (1950’s through 1981), there was very little incentive for anyone in the highest tax brackets to work harder.–

    That is just wildly crazy. No, it’s not fair to assume that.

    Did you notice some catastrophic declines in American productivity, income or standard of living during that time?

    In what could only be described as the greatest age of American affluence, did you notice a lethargic rabble refusing to work harder because of taxes?

    The fact is, no one paid those “stratospheric” tax rates. One word: Exemptions.

    The tax code is where you pick the winners and losers. High income earners sheltered their money. Is this a revelation to anyone?

    Can you understand why Rosty was King of Washington?

    Even after Tax Reform in 1986, the “simplified” tax code was volume after printed volume.

    Apply a little history and a little common sense to your assumptions.

  23. - Rich Miller - Monday, Oct 26, 09 @ 3:19 pm:

    We’re getting a lot of Econ 101 folks here lately. Troubling. That class has destroyed more minds than any other.

  24. - GoldCoastConservative - Monday, Oct 26, 09 @ 3:23 pm:

    New York State is discovering that a strategy of saoking its wealthiest, and hence most mobile residents, does not work. As of early October, the State had only collected 50% of the $1B surcharge on millionaires was expected to generate. Several long time New Yorkers, including Buffalo Sabres owner Tom Golisano, have recently moved moved their residences to states like Florida to avoid the newest tax. Even New York’s governor, whom no one would accuse of being a conservative, has opined on the failure of the state’s millionare’s tax: “”You heard the mantra, ‘Tax the rich, tax the rich…We’ve done that. We’ve probably lost jobs and driven people out of the state.”"

  25. - Secret Square - Monday, Oct 26, 09 @ 3:30 pm:

    “That class has destroyed more minds than any other.”

    Perhaps too many Econ 101 graduates forgot their English Lit classes… particularly Alexander Pope’s “Essay on Criticism,” which contains the famous adage “A little learning is a dangerous thing,/Drink deep, or taste not the Pierian spring.”

  26. - Rich Miller - Monday, Oct 26, 09 @ 3:32 pm:

    GoldCoastConservative, NY’s new rate over $500K is almost 9 percent - far higher than proposed here. NY City also has an income tax of 3.6 percent. Combine those two and you’ll see where the problem is. Not every graduated state tax will produce the same result.

  27. - steve schnorf - Monday, Oct 26, 09 @ 3:40 pm:

    Actually, I could probably live with taxing haircuts

  28. - wordslinger - Monday, Oct 26, 09 @ 3:42 pm:

    GCC, no tax proposal contemplated is even in the ballpark with NYC and New York state. They’re unique.

    In addition, a lot of those high-income taxes that were lost occurred not from people moving, but from jobs that were lost was when Wall Street crashed last September.

    A bunch of twenty-something Manhattan traders and MBAs who didn’t want to be a part of the bridge-and-tunnel crowd from Jersey are out of work.

    As long as I can remember, it happens about every 10 or 15 years. Same as the The City in London.

  29. - Small Town Liberal - Monday, Oct 26, 09 @ 4:04 pm:

    cover - For so many years I’ve tried to find someone else who based their fiscal ideology on Ten Years After lyrics, thank you.

  30. - Rich Miller - Monday, Oct 26, 09 @ 4:13 pm:

    ==Actually, I could probably live with taxing haircuts===

    What Schnorf did not mention is that he hasn’t had a haircut in 5 years. And it really shows. lol

  31. - Bill - Monday, Oct 26, 09 @ 4:44 pm:

    Look who is talking! By the way, I noticed that they are still using your high school yearbook picture on top of your column.

  32. - VanillaMan - Monday, Oct 26, 09 @ 4:58 pm:

    The “masses” have been quite content to receive more government than they’re willing to pay for, just as many have been willing to run up incredible amounts of credit card debt for daily expenses. It just can’t last forever.

    Voters voted into office a new party in power in 2002. They have given them a chance. Their chance has now ended. Voters do not believe that the folks in power will handle taxes in a fair manner.

    The past is past.

  33. - wordslinger - Monday, Oct 26, 09 @ 5:47 pm:

    –Voters voted into office a new party in power in 2002.–

    No, after you get past the hard-core partisans, the remaining voters went for the guy not named Ryan.

    Party had nothing to do with it. And party will have nothing to do with solving a $12 billion deficit in a $30 billion budget. If it were that easy, it would already be done.

  34. - VanillaMan - Tuesday, Oct 27, 09 @ 9:01 am:

    If it were that easy, it would already be done.

    Promising something for nothing is easy, as the Democrats have repeatedly promised over the past ten years. They made it difficult for themselves. The voters gave them the power to implement their painless, but delightful, promises. They failed. This is why voters are unwilling to be led by them today. The Democrats have failed.

    The entire power of the Illinois state government, the Cook County government, and the City of Chicago, has been in the hands of the Democrats. It is time they paid for their poor performances.

    What you are seeing now is the silent rebellion of Illinois tax payers. Next year it could be a bigger rebellion at the polls. I’m no fortune teller, but I don’t believe the Democrats will be rewarded for destroying the state economy.

  35. - Angry Chicagoan - Tuesday, Oct 27, 09 @ 9:20 am:

    Wordslinger, the fact is that people DID pay those taxes. Charles Wilson, the CEO of General Motors in the 1950s who infamously said that what’s good for GM is good for America, paid federal taxes of approximately $430,000 on total income of $586,000, as Malcolm Gladwell pointed out a few years ago in the New Yorker. At a time that the top marginal tax rate was 91 percent, Wilson was thus paying about 73 percent of his income in tax, so even the considerable exemptions he was claiming did not even bring his tax down to JFK/LBJ levels let alone today’s levels.

    So let us not buy into this myth that tax rates are meaningless because people will claim exemptions no matter what. The rich paid huge taxes during one of our greatest periods of economic growth and deficit reduction, and they didn’t disappear off to Monaco or Switzerland either.

  36. - Secret Square - Tuesday, Oct 27, 09 @ 9:40 am:

    AC, there was one very famous and wealthy American who did “disappear off to Monaco” in the 1950s — Grace Kelly, who not only made big bux in Hollywood but also came from a wealthy Philly family — but of course, there were other factors besides taxes involved :-)

  37. - Angry Chicagoan - Tuesday, Oct 27, 09 @ 9:42 am:

    The failure of the New York millionaires’ tax does produce a cautionary tale for state policymakers, but not so much for the feds. Aside from the fact that most New Yorkers seem to have a foot and a leg in Florida anyway, which I’d think would particularly constrain New York tax policy, it’s easy up to a point to escape a high state tax by moving across high state lines. That it hadn’t become an issue in New York until now is probably down to the huge property taxes that New Jersey and Connecticut residents pay.

    But here in Illinois we’re in a different situation — we’re basically the Monaco of the Midwest as it is. (Pity we don’t have the weather though.) Our income tax is lower than any of our neighbors, our overall tax burden puts us well behind states like Oklahoma, and the only exorbitant thing about our tax situation is the 10 percent we pay on goods for sales tax, a direct result of our continued refusal to tax basic services at all.

    We’ve borrowed ourselves into the poorhouse by trying to provide decent services on a Mississippi revenue base. There’s no alternative now to a substantial tax increase and probably user fee increases as well. But even there we’re in dangerous territory. The CTA next year will become the most expensive transit system in the country, with the highest farebox recovery ratio, the lowest percentage operating deficit, and the lowest percentage subsidy, just to take one example. Chicago has the lowest ratio of lane-miles of expressway of any metro in the country. We’re one of the few cities in the country where the suburban highways are already almost all tolled. We already have a very small number of state employees for a state of our size, with some services not provided and others contracted out compared to other states.

    In short, we can’t kill off this problem with outsourcing, or downsizing or any of the other typical reform measures. Real competitive bidding for capital projects? Great, but that’s completely outside the purview of the $12 billion operating deficit — that’s capital spending.

    So what combination of taxes and spreading user fees do we want? Realistically, that’s our choice.

  38. - wordslinger - Tuesday, Oct 27, 09 @ 11:06 am:

    VMan, you’re truly clueless on economics.

Sorry, comments for this post are now closed.

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