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Ryan: Tax hike now would be “criminal”
Tuesday, Dec 8, 2009 - Posted by Rich Miller * Republican gubernatorial candidate Jim Ryan used some extreme rhetoric when talking about tax hikes to the Tribune editorial board yesterday…
You’d think if a tax hike was “criminal,” you’d have a plan to keep the awful event from ever happening. Ryan added that cutting revenues to local governments “will put them on a diet and also save us money.” They’re already starving, so that’ll be one heckuva diet. As we’ve already discussed, two years ago Ryan was supporting a big tax increase, but times change, and people decide to run for office. Also, he’s no longer listed as a board member of the Center for Tax and Budget Accountability, which still supports a tax hike despite the recession. * Ryan’s remarks were made during the Tribune’s infamous closed-door editorial board candidate debates. In the past, they’ve posted audio of the debates, but I didn’t see anything online for the GOP gubernatorial hopefuls. Here’s a bit more…
I’m not sure what “each agency” means. But could that mean the State Board of Education would control the teachers’ pension fund? Yeah, that’ll work. More…
* Greg Hinz takes a look at some of Sen. Bill Brady’s budget proposals. One point…
The last time gas taxes were cut, it didn’t result in a spike in receipts as some had promised. * Back to Jim Ryan for a moment. The candidate told ABC7 recently that he believes “most people in Springfield are good people. Most people in politics are good people.” But, he added, that the Democrats have failed and claimed “Honestly, I don’t think representative government works in Illinois. It doesn’t. Because I don’t know who they’re representing. They’re not representing me. They’re not representing you. Who, exactly, are they representing?” Take a look…
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- Carl Nyberg - Tuesday, Dec 8, 09 @ 10:37 am:
Ryan seems to have the same fantasy as Andzrejewski that cutting waste and corruption in local government will happen automatically as a result of cutting local government revenue.
And I had posted on my Facebook page that Jim Ryan was the only candidate not embarrassing himself on the campaign trail.
- Anon - Tuesday, Dec 8, 09 @ 10:40 am:
Lame. I used to respect this man, but, since reentering politics in the race for governor, he is proving to be one of the people who will do or say anything to get elected. With regards to the state budget, some of that blame could be placed on Illinois democrats, but where was Jim Ryan when George W. Bush was running the country into the ground? Doesnt he think that republicans on the national level have created many of thee fiscal problems that we are dealing with today?
On that note, I would say that Jim Ryan was, once again, asleep at the switch.
- Justice - Tuesday, Dec 8, 09 @ 10:43 am:
Actually this clip would make a great ad.
- Joe from Joliet - Tuesday, Dec 8, 09 @ 10:47 am:
“…cut aid to municipalities - at least reduce iy if not eliminate it…”
Good luck with that in Chicago and Waukegan and Park Forest and Moline and Peoria and Decatur and Urbana and Carbondale etc, etc, etc. Has the IL Municipal scheduled a press conference yet?
- Segatari - Tuesday, Dec 8, 09 @ 10:48 am:
Just a note, I’ve paid my license renewals today - they are up to $106 each…more than $20 from last year.
- John Bambenek - Tuesday, Dec 8, 09 @ 10:49 am:
The specifics of Andrzejewski’s pension proposal is that the “employing agency” should pay the pension match and be required to do so with each paycheck.
Main reason, you can’t sue the ILGA to require an appropriation. You can sue a state agency though and require payment.
The chief problem with pensions is the chronic underfunding. The way to fix that is make it enforceable. Moving everyone to defined contribution sounds nice, but assuming you could do it for people in the system now, the entire balance on pension debt would be due immediately. (Vanguard, Fidelity, et al aren’t going to take a pile of IOUs to fund a 401k).
On top of that, you have, in effect, a state subsidy to employee costs now, when you subsidize something, you tend to get more than is efficient.
It also leads to the pension abuses. The driver to the 6% salary caps on pension benefits in last 4 years was that schools would give huge last year pay increases to spur early retirement and end up having the pensions foot the increased cost… Cutting costs by making someone else pay the bill is always bad economic behavior.
There’s a first year shift in budgeting to 0 out pension contributions and move those funds to agency appropriations, after that it works.
That’s high level, can go more in detail when I’m not on a Blackberry.
- Segatari - Tuesday, Dec 8, 09 @ 10:49 am:
Hit “say it” too soon…the point is they are raising taxes and fees on SOMETHING to get some revenue…even if it’s not an income tax.
- Obamarama - Tuesday, Dec 8, 09 @ 11:02 am:
===Ryan added that cutting revenues to local governments “will put them on a diet and also save us money.”===
What a bonehead comment to make. Maybe Jimmy should walk down the street and sit in his hometown city council meeting and test that sound bite. I agree with Joe from Joliet; if that doesn’t go over well in Elmhurst, how do you think it is going to go over in Peoria, East St. Louis, etc.
I am starting to believe that Ryan simply doesn’t have a clue about the nuts and bolts of the budget deficit and is merely regurgitating the talking points his “friends” who convinced him to run are feeding him.
- steve schnorf - Tuesday, Dec 8, 09 @ 11:05 am:
There are people I know and like, one of whom I will vote for in the primary (I think), running in the R primary for Governor. It troubles me very much to have to say this. I don’t know which is more scary regarding a potential Governor. Are they so ill-informed that they don’t know what they are saying is untrue, or do they know it is untrue and are saying it anyway?
You can’t make something true by wishing it very hard or by saying it loud and often, and wishing and saying this state budget can be balanced thru cuts and natural revenue growth just isn’t true.
The Emperor has no clothes, and we all, and he, needs to accept it.
- wordslinger - Tuesday, Dec 8, 09 @ 11:14 am:
It’s not very conservative to stiff vendors for months on end. I’d like to hear the conservative position on solving that very nasty problem.
- Yellow Dog Democrat - Tuesday, Dec 8, 09 @ 11:16 am:
The Republican argument goes something like this:
You can’t raise taxes when revenues are down, because raising taxes in a slumping economy would be “criminal.”
You can’t raise taxes when revenues are at a surplus, because government already has enough money.
I’d just like to get some clarity from the GOP: when IS a good time to raise taxes?
- Greg B. - Tuesday, Dec 8, 09 @ 11:20 am:
Schnorf makes an excellent point regarding not being able to balance the budget with cuts and natural revenue growth. Of course we also know from the last twelve years that higher taxes go for new spending, not for solving old problems. It’s quite a pickle and calls for some sort of paradigm shift — perhaps.
On cutting the gas tax. Was the last one permanent or not permanent. The expected-utility hypothesis would suggest that if the tax cut were not permanent then you wouldn’t see the benefits because people spend and save prospectively. Short term relief would probably mean people drive more or something… You wouldn’t get the wealth creating affects.
These tax plans by the GOP are they phased in over time? Same with the cuts. Speaking of which, health care reform is mostly Medicaid expansion.
The vast, vast majority of uninsured will be moving into Medicaid. And that was prior to this week’s news that the Democrat compromise will be even greater expansion of Medicaid. How are cash strapped states going to handle that?
- anon - Tuesday, Dec 8, 09 @ 11:21 am:
He said to raise taxes DURING THIS RECESSION is criminal. You left these three key words out of your editorial remarks. Not only is it criminal to raise taxes during a recession it makes absolutely no sense. Obama is doing it and that is why small business will continue to suffer and job creation will not happen. Business needs certainty to operate and create jobs - not more TARP funds and certainly not more taxes and burden.
- Will County Woman - Tuesday, Dec 8, 09 @ 11:26 am:
“to raise taxes during this recession is criminal.”—Jim Ryan
extreme rhetoric? eh, perhaps. but I don’t think it would bother voters. at the very least back ryan or any other republican should back up such talk with mentioning why it is imprudent to raise taxes in a recession.
- dupage dan - Tuesday, Dec 8, 09 @ 11:32 am:
YDD,
Never.
Greg B
The issue of expanding Medicaid and making the states pay for it is the dirty little “secret” of this wonderful health care program. What a bust that will be. A complete and total fraud being forced on us. There are so many ways the health care insurance system can be modified to help but these aren’t even being talked about. It’s all about punishing the insurance industry for being evil capitalists. Well, who invests in those businesses? Some big investors are the beleaguered penion funds.
The dems would like us to believe there is one answer - gov’t run health care. If it were only that simple. Illinois will be crushed flat by increased Medicaid costs.
- Greg B. - Tuesday, Dec 8, 09 @ 11:32 am:
YDD, The standard for raising taxes above where they currently are is something like WWII. The Hun at the door and a total mobilization… A major disaster that wreaked havoc on infrastructure might be a local excuse. But generally keeping revenue down to less than 20% of GNP is currently acceptable. Obviously you’d like to get federal spending — because big central governments tend to take freedom away from citizens — under 10% of GNP. No one is arguing that govt., should go away , it’s just that you want it where it can be controlled and it is serving you rather than you serving it.
Does that help?
And the necessary follow up would be, When are liberal democrats against hiking taxes on someone? Seems every year regardless of circumstances it’s tax and spend… spend, borrow and tax… What’s the figure for liberals 80%, 90% of GNP?
- zatoichi - Tuesday, Dec 8, 09 @ 11:33 am:
Do any of the people wanting to run for office have a broader picture than what immediately faces them. Cut aid to municipalities? Great solution because the municipalities would never raise local taxes and the ones who cannot, well too bad for them. Put state retirement in the hands of agencies who have no investment experience. There’s a comforting thought. Since these people seem to think there is no tie between state and local government, just pushing the revenue problem off on the locals must be key to solving the state’s problem. Never thought of that one. Avoiding the issue always solves it.
- Rich Miller - Tuesday, Dec 8, 09 @ 11:35 am:
===You left these three key words out of your editorial remarks.===
Those “key words” are included. And the headline is clear that he means “now,” not “always.” Take a breath and stop looking for every possible slight. You’ll always find one if that’s your attitude.
- CircularFiringSquad - Tuesday, Dec 8, 09 @ 11:38 am:
It seems jimRYAN is losing it…he wants to force cities and counties to cut cops and firemen? I guess he figures if the cops could not prove Cruz was guilty ( like he and BrickheadJoe did) then we don’t need them.
Looks like jimRYAN will need to drop before the ball does on New Year’s Eve.
- Obamas' Puppy - Tuesday, Dec 8, 09 @ 11:44 am:
“Representative government does not work in Illinois” ok - are you running on a lets make Illinois a dictotorship platform? Go back to the hole you crawled out of.
- Greg B. - Tuesday, Dec 8, 09 @ 11:48 am:
Zatoichi,
My sense is that you are correct on municipalities. A lot of that $$$ goes to first responders… If we want to cut it, we’re going to have to do some other reforms…
I don’t know if Adam A. wants to put agencies in charge of investments — heck their is whole industry in the private sector that could help them and maybe do a better job. Instead, make the agencies make the payment. In other words, it would become part of agency line items instead of a stand alone appropriation. I imagine there would be trade offs… And the GA would surely miss the flexibility they currently have…
- Bluefish - Tuesday, Dec 8, 09 @ 11:51 am:
So Ryan is proposing what will amount to either the largest municipal property tax hike in Illinois history or push a lot of non-home rule towns into bankruptcy and he thinks this will win him votes? He must not think that GOP primary voters are smart enough to see through this one.
- Rich Miller - Tuesday, Dec 8, 09 @ 11:53 am:
OP, take a breath, please.
- cermak_rd - Tuesday, Dec 8, 09 @ 11:53 am:
I just heard a McKenna ad on WPCT. Isn’t that an odd place for him to advertise? I can’t comment on the substance of the ad ’cause I was too busy laughing (hard) at it. Honest, it sounds like he got Floyd from Andy Griffith to do the voiceover on it.
- Pot calling kettle - Tuesday, Dec 8, 09 @ 12:01 pm:
The standard question to anyone who says they can fix the budget without raising taxes should be “What are you going to cut to save $10 billion dollars?” (or 7 or 11, or whatever the number is now)
Since the candidates are always talking about the budget deficit, every reporter writing about this should include a sentence that says what the current Illinois budget is. That numbers is necessary to educate the voters and to put the whole discussion of cuts and tax increases into context.
The discussion of a $10 billion deficit doesn’t really carry the full gravity of the situation until you know that the state’s budget is $25-27 billion. While it may sound possible to cut $5-6 billion, it sounds a lot less likely when you learn that it is 20-25% of the budget.
- Alice Waters - Tuesday, Dec 8, 09 @ 12:03 pm:
Ryan is pandering. He must be listening to the consultants who pushed him in the race…
- Moving to Oklahoma - Tuesday, Dec 8, 09 @ 12:06 pm:
Maybe I am just depressed because of the weather, but what difference does any of this make.
Its remarks to the Tribune editorial board by a bunch of candidates that are not going to win anything other than maybe a pie eating contest at the local fair. Its gonna be Gov. Pat Quinn in 2010, and we will continue to borrow and the state will continue to self destruct.
- Greg - Tuesday, Dec 8, 09 @ 12:07 pm:
Why would anyone suggest cutting the gas and estate taxes in the name of growth? Those are just about the first and second least bad taxes. Someone needs to re-read his Mankiw.
- Dnstateanon - Tuesday, Dec 8, 09 @ 12:10 pm:
Neither Adam nor Ryan apparently have been awake for the last few years to understand how Local and University Budgets work. Adam if you take away State funding for Pensions someone has to pay those payments it will be the Students will they be able to afford those much higher tuition costs or will they have to drop out? Those benefits are required by the State Constitution you can’t change them sorry this really shows you’re just not ready for the job.
- ZC - Tuesday, Dec 8, 09 @ 12:14 pm:
I am a quite liberal Democrat living on Chicago’s North Side, with an above-average interest in state politics (though with below-average knowledge of IL politics, compared to a lot of CapFax commentators). Generally I vote straight Democrat. But I am proud to say that in 2006, I was disgusted enough with Rod that I crossed over and voted for Judy.
This is all by way of commenting, for any GOPers interested, that based on stories like this so far, and my accumulating research, there is only one Republican running for Gov whom I would currently consider crossing over for again. That Republican is Kirk Dillard. And it’s precisely because of sentences like the following: “But state Sen. Kirk Dillard, R-Hinsdale, would not entirely rule out a tax increase, saying ‘all options ought to be out there’ to solve a deficit pegged at $13 billion by Democratic state officials.”
- Brennan - Tuesday, Dec 8, 09 @ 12:18 pm:
==I’d just like to get some clarity from the GOP: when IS a good time to raise taxes?==
Never.
Too bad the President is using the federal purse to force tax increases on the entire country.
You asked for it 52.8 percenters. You own it now.
- ZC - Tuesday, Dec 8, 09 @ 12:22 pm:
And as a follow-up to YDD: What we’re seeing, both locally and nationally, is that for all their talk about deficits and our children’s future, the GOP activists still hate higher taxes more than they hate higher deficits.
If it’s a choice between higher taxes and more deficits / more debt, they’ll go for the higher deficits / debt every time. That’s the way it was for 8 years under Bush, and it will be the same if they ever get back into power.
- Dnstateanon - Tuesday, Dec 8, 09 @ 12:23 pm:
Greg-Because the Gas tax is double taxation because there is also a sales tax on gas. Illinois while in the center of the state should be a big Transportation state but isn’t because of its higher then other states gas taxes and its Truck permit fee of $2000 which caused trucking companies to leave. So in this case dropping the tax would have a bigger impact on tax receipts to the state.
This is a farm state and has a lot of small businesses both Down and Up State every time someone dies that owns a small business or farm it has to be sold to pay estate taxes. This is bad for state revenue because of effect on Business planning and for Family farms which are usually picked up by corporations. It’s unfair that you pay taxes all your life then have the estate tax take almost all your property destroying your small family business or Farm.
- MrJM - Tuesday, Dec 8, 09 @ 12:27 pm:
Jim Ryan: “to raise taxes during this recession is criminal”
So if taxes are raised during this recession, will Jim Ryan blame Rolando Cruz and Alex Hernandez for the crime regardless of the evidence?
– MrJM
http://twitter.com/misterjayem
- Obamarama - Tuesday, Dec 8, 09 @ 12:30 pm:
Ouch, MrJM.
- N'ville - Tuesday, Dec 8, 09 @ 12:30 pm:
It looks like, whoever the nominees end up being, that the gubernatorial race will come down to choosing either a republican who claims that we over-spent our way into this budget mess and we’ll get out of it by downsizing government back to its basics, and a democrat who claims that the way out of this mess is to increase revenues to cover the over-spending, and go from there. If…and it’s a big if…one of the republicans can raise enough $$ to get that message across, they could be a winner.
- Ghost - Tuesday, Dec 8, 09 @ 12:33 pm:
=== that is why small business will continue to suffer and job creation will not happen.===
So you are assuming that if my business profits increase by 10,000 dollars from the removal of a tax I pay I will go out and create a new job if the extra position does not add revenue to my business?
The GOP argument is prenmised on trickle down economics, which Regan showed us fails miserably. Lets review a few very basic business concepts.
A buisness generally operates under principals of supply and demand. If there is a deman for a product or service, a buisness will supply it. if their is demand for a product or service, a business will increase staffing to meet the demand until you reach a saturation point where supply is greater then demand. When supply is greater then demand you reduce positions.
whether I pay 1 dollar or 2 dollars in tax, I will add jobs which generate revenue to meet the demand. I will not reduce my profits by failing to add jobs to meet demand, By contrast, if I can save 10k a year in taxes I am not going to add another job, I am going to pocket the profit.
Now lets look at demand. The State has been on the demand side of various services and products n a borad spectrum provided by those very buisness many claim to say need tax breaks. many of those buisness are recieveing no income, because they are not being paid for what they are supplying. Those businesses in turn have stopped purchasing from other businesses; and ther employees have stopped purchasing as well becuase they no longer have income. The 12 billion in debt represents billions of dollars in the economy refelecting demnds for good or services. Pull that billions from the economy and buisness will lose demnds for their products and services and go out of buissness.
uring a down economy most people, including business, hoarde money. A temporary tax increase dips into the collecive hoard in small amounnt an keeps th econsomy going by funding the pruchasing and sale of goods and services. Stop that purchasing and sales, and increase the lack of circulating money by providing a few more dollars profit to hoarde and the whole economy dies.
No business in a down economy with no one purchasing is going to add jobs for which there is no demand. the very sligh price reductions when taxes are removed, if the reduction is reflected in the price, do not expand purchasing. these small amounts end up being hoarded again.
We need circualte money to keep the economy going, trickle down economics stall econmies; and job creating by reducing taxes is a myth. Noone creates an uneeded job unless the tax incetive is so high, and the job so low paying, that the state is subsidizinga poverty job in place of skilled workers and good paying jobs.
- Johnny Q - Tuesday, Dec 8, 09 @ 12:40 pm:
Remember, people…Illinois is a low tax state. That’s the real reason we are in this mess.
We’ve been living off borrowed money for too long. It is time to start paying our fair share.
- Greg - Tuesday, Dec 8, 09 @ 12:43 pm:
Ghost, that’s painful. Taxes increase marginal costs, which determine a firm’s production schedule.
Reading economic lessons on this board (from both sides) inspires the same kind of reaction that y’all feel when told to “trim the fat” or whatever to fix the budget…they reveal a lot about the commenter.
- John Bambenek - Tuesday, Dec 8, 09 @ 12:55 pm:
I didn’t say the agencies would run the pensions, those same pensions systems would exist. The agencies would FUND the pensions directly out of their own appropriations.
- Greg B. - Tuesday, Dec 8, 09 @ 1:06 pm:
Agree with Greg. Would add I stop reading whenever I hear “trickledown.” Throughout the 80’s, 90’s and through part of this decade we’ve had tremendous growth and the basic policies of the Fed keeping an eye on inflation and lower taxes on investments worked. Don’t care what you call it.
And to dnstateanon 2 things: 1) I know how the gas tax works in this state; I’ve written extensively on it. My point wasn’t whether or not it is good for the economy or government. It was that you don’t get the benefits of feedback effects from lowering a tax unless that tax is viewed as permanent by consumers. So arguing that — if it is indeed the case — that the temporary gas tax relief in the 90’s didn’t lead to higher revenues doesn’t mean that a permanent tax reduction wouldn’t lead to greater revenue. Permanent vs. temporary are apples and organges IF the expected-utility hypothesis is correct.
2) No matter how you slice it, pension payments come from tax payers. Cost shifting is all ready occurring. Whether it’s paid by students paying tuition to state schools or the way it’s done now, at the end of the day it is the taxpayer who shoulder’s the burden.
- wizard - Tuesday, Dec 8, 09 @ 1:12 pm:
Ghost- when’s the last time you saw a “temporary” tax? Temporary taxes are extremely rare. Once the pols (either side of the aisle)get their hands on it, they won’t give it back. They think it is “their” money.
- grand old partisan - Tuesday, Dec 8, 09 @ 1:14 pm:
Johnny Q, that’s not necessarily true. If you are looking strictly at state income tax, then yes IL is on the low end. But every state has a mix of taxes and fees at varying levels of government with differing scopes of responsibility in each. Illinois has a combined state and local tax burden of about 9.3% of income - the national average is 9.7%.
- Rich Miller - Tuesday, Dec 8, 09 @ 1:21 pm:
===Temporary taxes are extremely rare.===
We’ve had two temporary income tax increases in Illinois history. One was allowed to expire, the other was made permanent after the winning GOP candidate for governor campaigned on making it permanent.
- Brennan - Tuesday, Dec 8, 09 @ 1:22 pm:
==and job creating by reducing taxes is a myth.==
The days of keeping your thermostat at 70F are over.
- Brennan - Tuesday, Dec 8, 09 @ 1:23 pm:
==Illinois has a combined state and local tax burden of about 9.3% of income - the national average is 9.7%.==
Where can I find this data? Thank you.
- Rich Miller - Tuesday, Dec 8, 09 @ 1:25 pm:
===Where can I find this data?===
There’s that mysterious new invention called the Google. It really helps if you use it before commenting. Go to google.com and type in: “illinois tax burden”
- Responsa - Tuesday, Dec 8, 09 @ 1:45 pm:
The comments here today generally reflect the basic philosophic differences in economic theory between “thinkers” on the left and right. Fine.
It’s easy for some to mock or laugh at a Republican candidate who says to voters “I’ll cut your taxes or at least not raise them right now”. Yes, that’s classic Republican/Libertarian fare. But then, where are the alternate ads from the Democrats which proudly say “we must, and therefore I WILL raise these specific taxes in Illinois by X much”? If raising taxes is the answer, and the only viable approach to Illinois’ current problems, then why is that not much more honestly reflected in the campaign promises and ads of the Democrats? Promising to raise taxes is not such a great vote getter, maybe, even if that’s what you plan to do later on? Where is the honesty?
Could it be that Todd Stroger’s sales tax experience and the public uproar over that is at the heart of this message disconnect? Were those howls of protest which greeted PQ’s toe in the water on increasing the state income tax too scary? Could it be that polls show average Joe voters in both political camps want to see some effort at corraling government waste and spending before they are willing to offer up any more green from their wallets and bank accounts?
- Ill_will - Tuesday, Dec 8, 09 @ 1:52 pm:
In a post above about David Vaught, he says he is asking for a 14% cut expecting a yield of 2 billion. Just having a little fun here:
So does 28% yield 4 billion? 42% yields 6 billion? At a 52% cut in State services we might balance the budget.
To the posters who say never raise taxes, which services are you prepared to live without?
- Yellow Dog Democrat - Tuesday, Dec 8, 09 @ 3:14 pm:
=== Throughout the 80’s, 90’s and through part of this decade we’ve had tremendous growth and the basic policies of the Fed keeping an eye on inflation and lower taxes on investments worked. Don’t care what you call it. ===
Actually Greg, throughout the 80’s and 90’s we had “tremendous growth” based on tremendous deficit spending.
I call robbing future generations so that we can avoid tough political choices today “Living on borrowed time.”
Our state and our nation have tremendous structural budget deficits. The state suffers from a historically outdated tax system built nearly 40 years ago and based on a 19th century agrarian society. The nation suffers from the Bush tax cuts and an unnecessary war which we couldn’t afford but for which we must all pay some price now.
- Charlie Wheeler - Tuesday, Dec 8, 09 @ 4:25 pm:
Point of information:
Historically, including as recently as the FY 2009 budget, the state’s contribution to the State Employees’ Retirement System has been a line item in individual department and agency appropriations, rather than a single lump sum.
Charlie Wheeler
- this old hack - Tuesday, Dec 8, 09 @ 5:20 pm:
Electing Jim Ryan, who clearly is clueless on fiscal policy, would be criminal.