Capitol Fax.com - Your Illinois News Radar » Tribune catches up on tax/bond story - Plus, an Illinois TABOR?
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Tribune catches up on tax/bond story - Plus, an Illinois TABOR?

Tuesday, Dec 28, 2010

* I told subscribers about this general idea a week or so ago. But I don’t think that the one-year plan being reported today in the Trib is actually what’s going on

As the state’s stack of unpaid bills grows, Gov. Pat Quinn is floating the idea of borrowing roughly $15 billion to alleviate the pressure, though taxpayers would be saddled with loan payments for years.

The governor has approached several lawmakers with a plan he’s dubbed a “debt bond.” While the name is somewhat redundant, the thinking is the state can pay back what it owes and plug its big budget hole — if only for a year.

A one-year “solution” would be a genuinely stupid move if true. So I really don’t think it is true.

The state has to solve two problems here. The first is the structural deficit, which is about half of the $13-15 billion in red ink. For that, you need recurring revenues. A one-off loan won’t do anything about those recurring problems. The second task is the pile of past due bills, which is roughly about another half. That’s the part which can be taken care of with a bond. If you just borrowed $15 billion and didn’t raise revenues above and beyond the debt payments to wipe out the structural deficit (or use cuts in tandem to eliminate it), you’d be right back to square one in a year. Like I said, it would be stupid. And that’s why I don’t think this is a one-off plan. They may borrow $15 billion (last week, it was more like $9 billion, but things do change), but they also need to get rid of this structural deficit to prevent more past-due bills from piling up again.

Paying for any plan will require a tax hike…

The most conventional source of money to repay the loan — an income tax increase — is also the most controversial. House Speaker Michael Madigan has been polling his Democrats on a variety of tax-hike options to gauge which might have a chance of passing. The scenarios include theoretical tax increases that would be billed as temporary or permanent and range from 1 to 2 percentage points.

As subscribers know, Madigan recently moved in the direction of one of those tax hike plans. But, as I always warn, things do change, and nothing is final yet…

Publicly, Quinn is sticking by his proposed 1-percentage-point income tax increase, which he has dubbed a “surcharge for education.” Privately, the governor has discussed with lawmakers dividing the money generated from a tax increase between schools and the state’s general revenue fund. […]

For his part, Quinn said he continues to work on creating a “comprehensive revenue package.” Quinn supports raising taxes on cigarettes by up to $1 a pack and has indicated to some legislators that he could be coming around the idea of raising the gasoline tax — a move he previously has opposed.

* Meanwhile, my syndicated newspaper column looks at some of the changes ahead

Organized labor is engaged in a furious multifront legislative war in Illinois, and more skirmishes may be on the horizon.

Trade and industrial unions are hoping to mitigate major damage from proposed workers compensation reforms. Teacher unions are trying to fend off what they consider to be some egregious education reforms. And public employee unions are warily eyeing a potential new battle against a well-known foe that their counterparts in other states have had to face in the recent past. Looking at the battlefield right now, you’d probably never know that Illinois Democrats held onto power in last month’s elections.

The House appears to be taking the more radically conservative approach, but the Democratic Senate president is determined to pass some form of workers compensation reform before the current General Assembly wraps up business in early January. The same unions that pumped hundreds of thousands of dollars into Senate campaigns are now fighting the very people they helped re-elect just a few short weeks ago.

The teacher unions are preparing scorched earth tactics for the House’s education reform bill, which they say will all but take away their right to strike, severely limit their collective bargaining powers and impose new state standards for firing or laying off teachers.

The union focus lately has turned toward a proposed constitutional amendment in the House for a so-called “Taxpayers Bill of Rights,” or TABOR, as it’s more commonly known around the nation. The proposal was quietly introduced during the veto session by Rep. Keith Farnham (D-Elgin), who also is backing the education reforms.

The measure would limit state spending to the previous year’s levels plus the average percentage increase (or decrease) of per capita personal income over the previous five years. Any spending above that would require a declaration of a fiscal emergency by the governor and a three-fifths vote in both chambers of the General Assembly. Any “extra” money would be placed in a rainy day fund or given back to taxpayers.

While House Speaker Michael Madigan’s position is not officially known, the unions have convinced themselves that Madigan will push it next month when the lame duck session resumes. Colorado’s TABOR required voter approval before spending or taxes could rise and was twice watered down in referendum voting. Attempts at passing similar proposals have failed in other states. Illinois may be the only state where a TABOR has Democratic backing.

The assault on public employee unions and government spending is not confined to Illinois, of course. Several other states are considering legislation to undermine the unions. Wisconsin’s new Republican governor-elect wants to get rid of collective bargaining rights for public workers. And New York’s Democratic governor-elect, Andrew Cuomo, has demanded a wage freeze from state employee unions and hinted at major layoffs if he doesn’t get what he wants. Cuomo also wants pension reform, teacher wage cuts and a 2 percent local property tax cap.

The Illinois Senate has been far less receptive to the House’s education reforms and likely will not love the Taxpayers Bill of Rights if it arrives. But the unions point to the big majorities for pension givebacks this year in both chambers and the Senate’s push for business-backed workers compensation and Medicaid reforms, so they aren’t taking any chances.

Unlike New York, where Cuomo courted trade unions during the campaign and tended to ignore the public employee/teachers unions, Gov. Pat Quinn heavily courted all sectors of organized labor and received gigantic contributions from pretty much everybody. Quinn, the unions believe, could be the ultimate “stopper.”

But if these and potentially other reforms are used by legislative Democrats to pry loose Republican votes for a tax hike, Quinn may have no choice but to climb on board and bite the hands which fed him so well this year.

So far, the House Republicans appear to be a bit more receptive to Democratic outreach than they were even a few weeks ago. The odds are still stacked against it, but if the Democrats keep moving rightward, the Republicans might (emphasis on “might”) possibly release a few votes for a tax hike.

* Related…

* Chicago schools confront an uncertain future

* New 2011 laws affect politics, speeders, pet shops

* SURS change will affect only new hires

* Next phase of Wacker construction set to start

- Posted by Rich Miller        

No Comments

Be the first to comment.

Sorry, comments for this post are now closed.


* Madigan's daily press briefing: He'd meet with Rauner and he's peeved at Durkin
* We're staying open!
* Hardiman on Madigan: "He’s like the Godfather down there"
* Rauner asked why Madigan could work with other governors and not him
* Emanuel goes off on Rauner... again
* *** UPDATED x4 - Rauner denies Cullerton claim - Cullerton: Special session is a "stunt" - Manar wants Rauner to call daily leaders meetings - Durkin said he opted out on his own *** Cullerton claims Rauner "pulled the plug" on meeting
* NRDC warns of "giant jumping fish" at Oak St. Beach
* Question of the day
* Rauner takes questions for first time in several days
* Illinois' "get along" shirt
* Pritzker slams Rauner over federal health care overhaul
* Emanuel doubles down
* New school funding reform plan appears DOA
* Let's be careful out there
* A little context, please
* After hot dispute, Rauner to sign gun crimes bill today
* Proft on Rauner's "massive" tax hikes: "He's done and so are Republicans for another generation"
* The Republican special session roundup
* Rauner administration loses legal power play to AG Madigan
* *** UPDATED x1 - The plot thickens *** As if things couldn't get any weirder
* *** LIVE *** Special session coverage
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's stories

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............
<


Loading


* Rauner signs gun bill; still no progress on bud.....
* Rauner names new director of Illinois child wel.....
* State Week: Special Session Begins - NPR Illino.....
* Rauner names new director of Illinois child wel.....
* Rauner Names New Director of Illinois Child Wel.....
* Rauner names new director of Illinois child wel.....
* Rauner names new director of Illinois child wel.....
* A budget by June 30, or Illinois faces unpreced.....
* Rauner names new director of Illinois child wel.....


* FBI: Search for visiting Chinese scholar is agency priority
* Trump slashes grant for group combatting white extremism
* A look at recent settlements in fatal police encounters
* Rauner names new director of Illinois child welfare agency
* The Latest: Brendan Dassey lawyers petition for his release
* Illinois governor signs repeat gun offender plan into law
* A look at high-profile police-related killings of blacks
* Governor threatens to reject 911 funding bill over fee hikes
* Snyder urges Michigan House to OK incentives for Foxconn
* Cullerton calls budget special session a 'political stunt'

* People like the building, not the gridlock
* Rauner threatens to reject 911 funding bill over fee increases
* Former Edgar appointee tapped as new DCFS director
* Rauner signs repeat gun offender plan into law
* Illinois House leaders meet, but no action on a budget
* House leaders meet, but no action on a budget
* SJ-R Podcast: Talking with Bernard Schoenburg about the special session
* Schuyler County hog farm opponents seek state ag meeting; threaten lawsuit
* SJ-R Live: Tax hikes vs. spending cuts; two experts disagree
* Retired SIU doctor cited for alleged unethical conduct

* Was Rauner's televised speech a success? Sort of.
* How this company defies the law of large numbers
* Toronto's simple marching orders for PrivateBank's Richman: Grow
* Move over, Champagne. There are some new (old) bubbles in town.
* Why a stabilizing banking sector is good news


* Drug charges stack up for pair who sold pancake mix to undercover cops
* At age 150, celebrate that long and peaceful U.S. – Canadian border
* Paving project to close lanes of Western Avenue on North Side
* I stand on the shoulders of great black men and women
* A budget by June 30, or Illinois faces unprecedented ‘junk’ status
* Illinois stands to lose $40 billion in Medicaid cuts: hospital group
* Services held for Alexis Stubbs, a girl who dreamed of fame
* A call to revive America’s political center
* Former Elk Grove Library employee charged with sexually abusing child
* Stan Bowman: Blackhawks deals “not based just on one playoff round”


* 'Chicken lady' farms in Rogers Park, despite neighbors' gripes
* $208K grant aims to help Northwest Indiana residents get HIV test, treatment
* Asian carp discovered close to Lake Michigan as Trump pushes budget cuts
* Welcome to Fear City, Illinois: Lessons from the New York financial meltdown
* Man convicted in 'unprovoked' fatal stabbing of co-worker in Waukegan draws 40-year sentence
* Rauner signs gun crime bill, favored by Emanuel, that cracks down on repeat offenders
* Man held in slaying over phony money claim during heroin deal, prosecutors say
* 2 in good condition after Thunderbirds jet goes off runway before Ohio air show
* No little plans: More than $20 billion of megaprojects in Chicago's pipeline
* Blackhawks trade Niklas Hjalmarsson and Artemi Panarin in separate deals, bring back Brandon Saad


» State Week: Special Session Begins
» Prosecutors Seek To Uphold 'Making A Murderer' Confession
» Budget Impasse Makes Future Of Sojourn Shelter Unclear
» Bulls Trade Butler To Timberwolves, Go All In On Rebuild
» Illinois Experiments With High Schools Of The Future
» Senate Democrats Urge Republicans To Compromise On Budget Deal
» Cook County Democrats Hear From Gubernatorial Candidates
» $25,000 Reward Offered For Rare Clock Stolen In Chicago
» Obama Presidential Center Could Include Playground, Sledding
» There's At Least One Thing On Which Illinois Democrats And Republicans Agree ...


* People like the building, not the gridlock
* Rauner threatens to reject 911 funding bill over fee increases
* Former Edgar appointee tapped as new DCFS director
* Rauner signs repeat gun offender plan into law
* Illinois House leaders meet, but no action on a budget
* Point: Education of state's children harmed with property tax freeze
* Counterpoint: Illinois should cut property taxes now
* Eugene Robinson: With health care bill, the GOP is mounting a historic heist
* Our View: Thumbs Up to promoting civility in politics
* House leaders meet, but no action on a budget


* PODCAST: SportsTalk 06-23-17
* Alton’s Germania Brew Haus brings coffee, craft beer to Downtown Alton
* Grafton’s Buena Vista enters industrial age with one-of-a-kind functional art
* Fosterburg Water District appointments draw ire, two board members replaced
* Rauner names new director of Illinois child welfare agency
* No new flooding from rain this week, but some effects of April flood still linger
* Five at 5: Video gaming turns 5 and four other stories you should see
* Highland Splash swims away from Freeburg Waves to go 4-0
* Man committed home repair fraud against eldery couple, police say
* Beiser highlights warning signs during Alzheimer’s Awareness Month


* Plenty of questions remain about Bulls' sudden change of direction
* Ingleside man sentenced in marijuana conspiracy case
* 2 accused of trying to sell pancake mix to Elgin cops in drug deal
* Picnic with police next week at Lincolnshire library
* Prospect Heights Block Party is Saturday

* Hultgren backs Trump; suburban Democrats d...
* Climate Lobby travels to Washington - Chic...
* President Trump urged to appoint a special...
* Randy Hultgren: US should remain on UN cou...
* Rep. Randy Hultgren constituents decry sec...
* Payments in the future will be sent like t...
* Illinois GOP representatives plan fundrais...
* Northern Illinois Congressman Co-Sponsors ...
* The importance of funding science research...
* Hultgren pushes for job training, educatio...

* Guest lineups for the Sunday news shows - ......
* Guest lineups for the Sunday news shows - ......
* Guest lineups for the Sunday news shows - ......
* Watch Ali Velshi Call Republican Cory Gard......

* New bill would expand SBA cyber training -......
* White House sends Durbin, Duckworth a name......

* “The Driver’s Side” – News From The Motorist’s Perspective
* Chicago Zombie March, Logan Square Arts Festival, and more things to do in Chicago this weekend
* Raise Your Pride Flag!
* EXTRA: Everybody’s spewing a load of bull in the land of Springpatch
* Steppenwolf releases ‘official statement’ on Hedy Weiss review uproar
* Di Leo: Springfield – The City That Banned Capitalism
* Next week saxophonist Dave Rempis plays solo and leads a full-band performance of a South African jazz classic
* Don't Rain On Our Parade -- Or Park Near The Route
* Fathers Day Sunday.
* Hitting Left with the Klonsky Brothers episode #21.


* Illinois Awarded Funds to Offer Advanced Training on Detecting Impaired Driving
* Illinois EPA Announces Upcoming Household Hazardous Waste Collection Events
* IEMA Highlights Emergency Preparedness for People with Access and Functional Needs in May - Ready Illinois website offers preparedness tips for people, caregivers
* First Lady Launches Illinois Family Connects
* Governor and Lt. Governor Unveil 2016 Journal of Local Government Shared Service Best Practices

  
* CEO: India should hold off new tariffs to keep OnePlus 5 pricing stable
* Only two months in and there’s a Sony Xperia XA1 deal on Amazon
* HTC U11 Edge Sense updates will let you zoom in and pick up
* Google bringing YouTube TV to 10 new markets
* Galaxy Note 8 pegged for late September launch
* YouTube hits 1.5 billion viewers per month, introduces new share and dynamic adapt features
* [TA Deal] Buy five Powertabs for less than $20!

* Even-keeled Buehrle regular guy amid success
* Baseball is a family tradition for Matthews
* Pelfrey faces A's to open homestand
* White Sox prospects on the move in Minors
* Breakthrough Series has Chicago flavor
* Pelfrey faces A's to open homestand
* Buehrle was one of a kind in time with Sox


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress




Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller