* A new study by the Anderson Economic Group ranks Illinois 20th nationally in its business tax burden, “defined as the share of pretax operating margin that a firm has to pay out in combined state and local taxes,” according to Greg Hinz…
By that standard, businesses in Illinois paid 9.6 percent of their pretax profit in state and local taxes in calendar 2011, more than the average of 8 percent paid by the 10 lowest tax states but less than the average 14 percent by the 10 highest states.
The actual range among the states was from 5.1 percent in Delaware to 25.2 percent in Alaska, where the number is skewed by that state’s dependence on taxes levied on natural resources like petroleum, which tend to be high.
Perhaps more significant, Illinois ranks relatively well among other Midwestern states, even after jacking up its income tax at the beginning of 2011. Iowa is lower at 8.5 percent, and Missouri just below at 9.2 percent. But higher are Minnesota (10 percent), Indiana (10.6 percent), Ohio (11.1 percent), Gov. Scott Walker’s Wisconsin (11.3 percent) and Michigan (13.3 percent).
Down in Texas, whose Gov. Rick Perry recently came up here ona rather bellicose corporate raiding mission, the total tax burden is a little lower than ours. But at 9.2 percent — compared with 9.6 percent in Illinois — the difference is what a good Texan might call a lil’ itty-bitty.
Wanna bet that the Tribune editorial board, Bruce Rauner, Ty Fahner, the Illinois Policy Institute and the other folks screaming about how Illinois is about to die a self-inflicted tax death completely ignore this study?
* But that’s not to say we don’t have some very real problems here. For example…
For every hundred dollars in payroll, Texas employers pay 39 cents for workers’ compensation insurance; their Illinois counterparts pay $1.10.
Few big companies actually pay the full tax rate, but workers’ comp is another story. It has to be addressed… again.
Illinois House Speaker Michael Madigan said Thursday a controversial pension solution that would require suburban school districts to eventually pick up the tab for their teachers’ retirement costs is inevitable.
“This is going to happen,” the powerful Chicago Democrat said. “There will be a new plan.”
Brent Clark of the Illinois Association of School Administrators said a district’s ability to absorb pension costs may hinge on its property tax wealth. The more reliant on state aid a district is, the less likely it can accomodate the cost shift.
“The more property wealth they are sitting on, the more likely they are to be able to manage this,” he said.
Clark also suggested that school districts be given latitude in following some state mandates. A district could determine “which ones are actually appropriate for the district or not.” That could free up money that could then be directed to pension costs, he said.
* The Question: Could you support any sort of cost-shift plan? Take the poll and then explain your answer in comments, please.
* Last week, I took Oscar the Puppy downtown and three people yelled out his name. Not one of them said “hi” to me. A couple of days later, Oscar and I went to the pet store and a blog reader gushed over the little guy and barely talked to me at all.
I’m sensing a developing pattern here.
So, by popular demand, here’s the real star of the blog getting a much-appreciated belly rub…
Posing…
* Oscar has been enrolled in puppy training class. Actually, it should be called puppy owner training class because we’re the ones getting the real lessons.
Friday, May 10, 2013 - Posted by Advertising Department
[The following is a paid advertisement.]
The satellite television industry serves a crucial role in connecting Illinois to the rest of the world with content that informs, entertains and educates – in many instances it’s the exclusive broadcast service provider available to Illinois homes. In addition, the satellite TV industry is an important economic driver creating hundreds of jobs in our state.
Facts About Satellite TV in Illinois:
• Serves 1.3 million households in Illinois (almost a third of homes that subscribe choose satellite)
• Employs over 790 people, plus more than 1,000 technicians at 481 local retailers
• Rural Illinois depends on satellite TV since cable does not often provide service to their area
• Satellite TV offers a wider range of foreign language programming in comparison to cable
Lawmakers continue to be prodded by the cable TV industry to place a NEW 5% monthly tax on satellite TV service. Previous versions of this discriminatory tax proposal have been defeated in Springfield—and similar bills are regularly defeated in other states including three times in neighboring Indiana, Iowa and Minnesota. This revenue generator needs to be clearly labeled what it is: An unfair tax increase on the 1.3 million Illinois families and businesses who subscribe to satellite TV.
* From a recent Illinois State Rifle Association “special alert”…
The second subcategory of gun control’s true believers can be described generally as victims of violence. This subcategory encompasses a wide range of persons to include families of murder victims as well as first hand survivors of violence. Whereas the vast majority of victims of violence do their best to recover and get on with their lives, there is a minority who allow their grief to turn into seething bitterness. Rather than make a positive contribution to prevent future violence, they embark on divisive, hate-filled campaigns against lawful firearm owners.
These victims of violence are ideal advocates for the abolishment of private firearm ownership. On the surface, they are vulnerable and weepy-eyed. But, below the surface, they are boiling over with hatred for people who own guns. That deep hatred fuels their drive to do whatever it takes to punish lawful gun owners.
These victims of violence are all about payback, and the payback they seek won’t be meted out to the criminals by whom they were victimized. No, the objects of their ire are the tens of millions of hunters, sportsmen and target shooters who responsibly exercise their right to keep and bear arms. These victims of violence claim that their campaign for domestic disarmament has the best interests of the public at heart. Chances are, these people couldn’t care less if others suffer the same fate as theirs. In fact, additional acts of violence only serve to justify their calls for the abolishment of private firearm ownership.
These people love the limelight. That is why they reside in the top positions in the Illinois gun control movement. That is why they take every opportunity to get in front of the cameras, tell their stories, and then mercilessly bash law-abiding firearm owners.
The most effective way to deal with these people is to meet them head-on. When they have a public meeting, the audience needs to be flooded with firearm owners. When they have a media event, the media needs to see more gun guys than anti-gunners. We need to confront them at every turn and vigorously defend the constitutionally protected right to keep and bear arms.
Like pacifists, debating these people is pointless. They have dedicated their lives to destroying the 2nd Amendment. They cannot be reasoned with. They cannot be educated.
* The Illinois Republican Party raised no money during the first quarter of the year. If you want to see one reason why that happened, read this Sun-Times report…
A livid Ron Gidwitz called out the conservative faction of the party’s central committee on Thursday, telling the Sun-Times its ousting of Illinois Republican Party Chairman and lack of preparation to deal with the fallout has put a poor face on the party, “destroying” the embattled GOP’s chances in next year’s election.
“The state central committee — a faction of the state central committee — is destroying any chance that the Republican party has in 2014,” an angered Gidwitz told the Chicago Sun-Times on Thursday. “I mean, how stupid is this! The lack of thoughtful, leadership … The state central committee is responsible for the leadership of our party. To push out the party chairman with no plan for a replacement — it is absurd. And with no thought to the consequences of their behavior.”
Gidwitz is typically one of the leading Republican cheerleaders in the state and is a major player in national and statewide politics, hosting a variety of fund-raisers, including for presidential nominees.
“They’re making the central committee irrelevant. The uncalled for attacks on Pat Brady and the lack of preparation once they started attacking Pat Brady, with no expectation, no strategy to replace him with a capable, respected individual,” Gidwitz said. “They are fundamentally creating an irrelevancy for the state party.”
Gidwitz blew up after the Sun-Times contacted him with a working list of possible replacements to Brady.
Gidwitz has been a leading member of what the Republicans euphemistically refer to as “the donor community,” which essentially means wealthy Republicans who traditionally give big bucks.
* The pension reform stalemate isn’t about personalities. It’s about policy and it’s also about the traditional conflict between the House and the Senate. Senators don’t like to be pushed around by the House. They never have. So Madigan is right here…
Q: How much of the pension debate is about finding common ground, and how much is about a battle of two big personalities?
A: “You can take that battle about personalities and throw it in the ash can, okay. This is all about correcting a serious fiscal problem for the state of Illinois. We’ve discussed changes in the pension laws for close to four years. We made a serious effort a year ago. It failed, but we’re back again. I think the bill passed by the House is a good solid bill, well thought out. It has a broad base of support, and it ought to be passed by the Senate. And I think they will pass it.”
* Senate passes Cullerton pension bill: In an interview with the Associated Press, the governor said the Madigan bill deserves to be called for a vote in Senate. That’s more than Mr. Quinn has said about the Cullerton bill in the House.
* Illinois Senate OKs union-backed pension deal: But Ron Holmes, a spokesman for Cullerton, said it didn’t appear Madigan’s proposal had enough votes to pass the Senate. He noted four Republicans voted with Democrats on the union-supported bill Thursday, and that a bill similar to Madigan’s failed to get the 30 votes needed for approval when it was before the chamber earlier this year. “If there’s some sort of shift that says we can get to 30 votes (on Madigan’s bill), the Senate president will take that into account,” Holmes said.
* A showdown in Springfield?: Bivins said he had been leaning in favor of the Cullerton bill, but he pulled his support after finding out about the opposition of the association representing retired teachers. “I discovered that this one group was never at the table,” the senator said. “They had concerns with the bill’s constitutionality. That was one of my concerns. It was a major mistake not to have them at the table.”
* Sun-Times Editorial: What’s ‘morally’ wrong? Fake pension fix: The Senate bill is the worst kind of reform: It looks like progress and it could be passed off as such by campaigning politicians. But the bill saves relatively little and allows Illinois to continue the outrageous pass-the-buck behavior that got us in trouble in the first place.
Lawmakers are human beings, and like most human beings they don’t make any major changes until it’s clear that something absolutely has to be done.
Pension reform is a good case in point.
It’s been obvious since just after World War II that Illinois’ pension systems were dangerously underfunded. But nothing was done until the problem was discussed at the state constitutional convention in 1969. The delegates came up with a plan that they believed would scare the Illinois General Assembly into finally providing adequate funding for the pension systems.
The idea was simple. Legislators were forever barred from cutting pension benefits. Constitutional delegates figured that legislators wouldn’t be so irresponsible as to short the pension systems and raise benefits to the point where it threatened the very existence of the government. The delegates were wrong.
Pension payments continued to be skipped and skimped while benefits continued to rise. In the 1980s, legislators compounded the interest on annual pension increases, making the problem far worse.
In the 1990s, Gov. Jim Edgar put in place a 50-year solution. But like those crazy mortgages in the last decade, the big balloon payments were put off until far into the future.
Even with Edgar’s “ramp,” pension payments still were skipped, and when the stock market crashed after the mortgage industry collapsed, billions of dollars contributed by taxpayers simply vanished.
The unfunded liability now tops $100 billion. Annual payments are so high and are rising so fast that they are literally eating up the rest of the state budget. Almost every dime of 2011’s huge state income tax increase now goes to the pension systems.
Two years ago, House Republican Leader Tom Cross along with Ty Fahner at the Civic Committee pushed a pension reform plan that actually increased annual payments by a billion dollars and knocked just $3 billion to $5 billion off the state’s unfunded liability.
Despite strong editorial support, unions flat-out rejected Cross’ plan and a bipartisan consensus developed against it. The bill went nowhere.
This past Monday, the unions unveiled a compromise plan with Senate President John Cullerton that knocks $10 billion off the unfunded liability and actually saves taxpayers $45 billion over the next 30 years.
But instead of being praised for their difficult compromise, the unions have been hammered for an insufficient effort.
If the unions had proposed their current plan two years ago, it would’ve immediately passed and they would’ve been praised for saving the state. Nothing proposed by that point even came close to the savings that the unions have now agreed to.
The problem for the unions is that House Speaker Michael Madigan passed a pension reform plan before they unveiled their own proposal. Madigan’s plan saves far more money than the union proposal and knocks billions more off the unfunded liability.
The delay in reaching an agreement with the Senate meant the unions could not go to sympathetic House Democrats and plead their case before the House voted.
So now we are once again stuck with two competing pension bills. The gridlock has not been broken. The irony here is after 65 years of pension woes, a one-week delay in coming up with an agreement may have made a huge difference in how the state ultimately decides to deal with the issue.
Timing is everything. And that’s really too bad. The solution to the pension problem ought to include the voices of those who are being asked to give up something that has been guaranteed by our Constitution.
