Wheeler on the rebates
Friday, May 2, 2014 - Posted by Rich Miller
* Charlie Wheeler has the best criticism I’ve yet seen on the proposal by House Speaker Michael Madigan and Gov. Pat Quinn to mail out $500 “property tax rebate” checks before the November election…
Quinn touted the idea as “the most significant property tax relief in state history,” at best a dubious claim for a couple of reasons. Chief among them is the fact that the annual $500 check would not be linked at all to actual property tax payments, nor would the giveaway benefit everyone. Indeed, homeowners whose tax bills exceed $10,000 actually would lose money under the governor’s plan, because they’d no longer have the current income tax credit equal to 5 percent of property taxes paid. Renters would get nothing, even though they also pay property taxes as part of their monthly payments.
The governor likened his plan to former Gov. Jim Edgar’s 1997 effort to raise income tax rates to provide more money for local schools and to cut local property taxes, also a stretch if not downright mendacious. The key difference: A major feature of the Edgar tax swap proposal called for a dollar-for-dollar reduction in local school levies for some $900 million in additional state aid, which analysts at the time estimated would amount to almost a 30 percent cut in school operating taxes. Quinn’s plan ignores local property tax levies altogether.
In addition to property tax relief, the Edgar proposal also would have increased state aid to poorer school districts by some $600 million; the only way the governor’s $500 checks would help struggling schools would be if the folks who got them splurged at PTA fundraisers.
Still, maintaining income tax rates at current levels, as Quinn wants, is critical to the financial well-being of the state’s schools, which would lose more than $600 million in general funds otherwise, according to budget documents. With the rates in place, the budget recommends a $291 million general funds increase.
Using the $700 million in net new cost for those rebate checks could boost that school spending increase to a billion dollars.
- Idea - Friday, May 2, 14 @ 11:14 am:
With all these pot holes, they would be wiser to spend the money on infrastructure…roads, bridges, rail.
- Rich Miller - Friday, May 2, 14 @ 11:17 am:
Idea, it’s a good point. A $750 million annual revenue stream could fund about a $7.5 billion capital project.
- Mason born - Friday, May 2, 14 @ 11:20 am:
Rich,
But that wouldn’t give voters a 500 dollar check right before the election courtesy of PQ.
- Sir Reel - Friday, May 2, 14 @ 11:21 am:
A flat $500 per household benefits folks with modest homes/property taxes - Quinn’s base. Governor Pander strikes again.
My assessment just increased 50%. $500 won’t even cover the property tax increase I’m facing. Woopee.
- Mike M - Friday, May 2, 14 @ 11:23 am:
“Renters would get nothing, even though they also pay property taxes as part of their monthly payments.”
Renters do not pay property taxes as part of their monthly payments.
Renters pay market value for rent. If that market value covers all the landlord’s property expenses, including property taxes, then we have a win.
But this is not always the case.
- Memory - Friday, May 2, 14 @ 11:28 am:
Ask Legislators how much thanks they got a dozen years(?) ago when they sent people $300 checks…little to none.
- Ahoy! - Friday, May 2, 14 @ 11:39 am:
If we’re worried about $600 million, why don’t they just roll back the tax hike to 4%? That extra .25% should cover the education cuts.
- fed up - Friday, May 2, 14 @ 11:44 am:
“Idea, it’s a good point. A $750 million annual revenue stream could fund about a $7.5 billion capital project”
Much better use of the funds then a political stunt to prop up Quinn.
- Toure's Latte - Friday, May 2, 14 @ 11:45 am:
I missed the presser touting the $600m education spending increase when the rate went from 3 to 5%.
- wordslinger - Friday, May 2, 14 @ 11:52 am:
Yeah, it’s a gimmick.
- RNUG - Friday, May 2, 14 @ 11:59 am:
As a State retiree, that $500 check in November doesn’t begin to make up for the annual loss I’ll see starting in January.
The only winners from this proposal are the non-government retirees with so little taxable income they can’t claim the property tax exemption.
- Federalist - Friday, May 2, 14 @ 11:59 am:
I keep saying it. Stop expanding programs and pay existing bills.
That is what any responsible person would do. And this proposal is what gives Illinois government a bad name with those who have any common sense whatsoever.
Wonder if the credit agencies, which like to only pick on pensions as the sole cause of Illinois fiscal issues, would like to give an advisory not to proceed with this preposterous proposal?
- Arizona Bob - Friday, May 2, 14 @ 12:24 pm:
This is absolute nonsense. Keep the property tax rebate and kill the income tax extension.
This is just “Bread and Circuses(is the state fair going to be expanded as well?LOL). It didn’t save the Roman Empire, and it sure as heck won’t the Illinois Dem empire.
OF course, Romans were samrter and better educated than most Illinois voters….