“Rauner opens door to higher income tax rate”
Monday, Jul 21, 2014 - Posted by Rich Miller
* Way to go, Rick Pearson…
Republican governor candidate Bruce Rauner today opened the door to a potential income-tax hike, saying the 3.75 percent personal rate he would inherit if he wins this fall would be subject to negotiations with a General Assembly that’s expected to remain in Democratic hands.
Rauner, elaborating on the tax plan he unveiled last week, said voters shouldn’t get hung up on short-term budget issues and tax rates. Instead, he said, the overall goal is to make structural changes in state government that would lead to a rollback of the income tax to 3 percent by the end of his first term in office.
In releasing his proposal, Rauner called for a four-year phase out of the 2011 state income tax increase approved by Democrats and signed into law by his general election challenger, Democratic Gov. Pat Quinn. That increase, which bumped the personal rate from 3 percent to 5 percent, is scheduled to roll back to 3.75 percent on Jan. 1, before the next governor is inaugurated.
“Well, I think we’ll work out the specific rate with the General Assembly like we’re going to work out the entire budget with the General Assembly. My personal goal, (the) 3.75 (personal rate) I think is good, but we need to work out the overall plan and how we transition,” Rauner said during a campaign event at a River North restaurant.
“What we need to do is make major structural change over time so we become a growth state again. That’s the critical thing. And here’s what my commitment is. We need to roll the (personal) income tax rate back from 5 percent back to 3 percent where it started within a four-year period and I think 3.75 is a good place to step to next but we’ll work out those details with the General Assembly,” he said. [Emphasis added]
It’s just not possible to immediately get a brand new service tax up and running. No way could businesses comply right away. So you can’t use money from the service tax to plug the second half of this fiscal year’s budget. He’s gotta raise that rate from 3.75 percent. And he all but admitted he’d have to start at five. And that means a post-inaugural vote. And a bipartisan vote at that.
That’ll be fun to watch.
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* From a Tom Cross press release. Pay special attention to the last two paragraphs…
Over the last five months, State Senator and candidate for Illinois State Treasurer Mike Frerichs has delivered stinging criticism directed at the office of the Treasurer’s investment portfolio, specifically Illinois’ investment in other states and overseas. Frerichs has countered with his own plan of investing exclusively in Illinois investments, although he has not outlined how that plan would work or how it would meet the statutes restricting investments by the office of the Treasurer.
Yesterday on WGN Radio’s “Sunday Spin with Rick Pearson”, Republican candidate for Illinois State Treasurer Tom Cross outlined the perils of Frerichs’ “insiders only” investment strategy, pointing out that it would likely result in lower returns for Illinois taxpayers as there will be limited competition and a closed market for over $13 billion of investment. In addition, Cross added that with Illinois’ past record of corruption and graft, particularly within the role of state investments, limiting Illinois’ $13 billion exclusively to investments within the state greatly increases the potential for fraud and corruption.
“We need to be working for taxpayers to receive the greatest return for their hard-earned tax dollars while minimizing risk,” said Cross. “Like every other person who has a 401k, we are going to look across the US and even globally to secure a good return and a safe return for every tax dollar we invest.”
Frerichs’ criticism of overseas investments also is at odds with his past voting record. As a Senator, Frerichs has supported overseas investments , but now as a candidate for Treasurer, Frerichs is leveling harsh criticism at the Treasurer’s global investment strategy.
One country that would be singled out under Frerichs’ plan is Israel. The office of Treasurer currently has $25 million invested in foreign bonds, all with the country of Israel.
More than 80 states and municipalities in the United States currently invest in Israel bonds. Last month the state of Ohio invested over $47 million in Israel bonds. Today, an Israel Bond with a 10 year maturity pays nearly 1.4% above the U.S. Treasury rate for the same length. Since the introduction of the bonds in 1951, Israel has never missed or defaulted on a payment.
The North Shore is a crucial battleground area. Mark Kirk did well there and won statewide. Bill Brady fared poorly and lost. The area’s 10th Congressional District always features candidates attempting to outdo each other on pro-Israeli policies.
We’ll see how Frerichs reacts to this, but right now I’d say it’s a smart political move by Cross.
However, I personally would rather see more of the state’s money invested right here, even if it brings a slightly lower immediate return.
Discuss.
…Adding… There seems to be some confusion or deliberate spin in comments. Frerichs wants a blanket policy. He didn’t “single out” Israel. That’s just Cross’ rhetoric. It works, though, as comments clearly show.
*** UPDATE *** From the Frerichs campaign…
- Yesterday the Tom Cross campaign launched an untrue and unfounded attack on Sen. Frerichs and his support for continued Illinois investment in Israel Bonds.
See the statement below from state Sens. Daniel Biss and Ira Silverstein and state Reps. Lou Lang and Sara Feigenholz on behalf of Treasurer Candidate Mike Frerichs, in response to a release yesterday from the Cross campaign that erroneously suggested Mike wants to end state investments in Israel. Here is the full audio clip from the radio interview, where it’s clear Mike said nothing like that. The relevant section starts at about 7:30:
In fact, Mike supported I-Bonds as chief co-sponsor of this bill with his Jewish colleagues last year: http://ilga.gov/legislation/billstatus.asp?DocNum=1571&GAID=12&GA=98&DocTypeID=HB&LegID=72631&SessionID=85
“Mike Frerichs is among the most outspoken and vocal advocates for the State of Israel in the Illinois General Assembly. He was a strong supporter of the bill that would allow for significant new investment in Israel Bonds, and supports the policy that keeps Illinois pension funds from investing in businesses that adhere to the economic boycott of Israel. As State Treasurer, he will work to strengthen the economic ties of the State of Illinois to Israel. This policy will create jobs here and advance the interests of our chief ally in the Mideast.
At a time when the State of Israel is in armed conflict, fighting for its survival and its security, it is unfortunate that Tom Cross has decided to use Israel as a political pawn in the race for State Treasurer. Not only is he wrong about Mike Frerichs, but Mr. Cross has degraded the political process by resorting to twisting of facts for his own personal political gain.”
…Adding More… The breakdown of Treasurer Rutherford’s investment portfolio is here.
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* Stu Rothenberg has moved the 10th CD from Toss-up/Tilt Democrat to Pure Toss-Up…
IL 10 (Schneider, D). Brad Schneider squeaked out a win over Republican incumbent Bob Dold by just over a percentage point (fewer than 3,500 votes) in 2012. Now, Dold has a re-match, figuring that in an off-year, and without President Obama on the ballot, he has a better chance to win. Dold ran a strong race before and he appears to have a small advantage right now. Democrats have reason to worry about that Democratic Governor Pat Quinn will meltdown outside of Chicago and affect the party’s chances in House races. This contest should be very close once again and we’re moving it from Toss-Up/Tilt Democrat to Pure Toss-Up
It’s tough to beat an incumbent, as evidenced by Schneider barely eking out a win against a Republican freshman in a huge Democratic year. This will obviously not be a huge Democratic year. And Quinn is under-performing most of the rest of the ticket pretty much everywhere else. He could turn out to be a significant drag.
Your thoughts on this race?
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Lisa Madigan’s end game
Monday, Jul 21, 2014 - Posted by Rich Miller
* The attorney general’s office has been spending an enormous amount of time and money defending the state in this deluge of cases. So, the Illinois State Police’s new rules appear to have been essentially designed to get these cases out of the courts and back to the review board…
There are about 200 concealed carry denials before Illinois courts, brought by people who say they shouldn’t have been deemed dangerous or a threat to public safety by Illinois’ Concealed Carry Licensing Review Board.
Until recently, applicants didn’t actually know why they were rejected.
In response to the swarm of lawsuits, the State Police just issued new rules. From here on out, the review board must tell applicants why they were denied; those applicants also have a ten-day window to write a written objection.
Rather than continue fight it out in court, Illinois’ Attorney General is going to ask that all of the ongoing lawsuits be tossed back to the licensing board.
“The reasoning for that is based on the concerns that the applicants have raised, one of those being an opportunity to respond to the board’s reasoning for objecting, or questioning, an applicant for concealed carry license,” says the Attorney General’s spokeswoman, Natalie Bauer.
As I’ve pointed out before, these new rules are hardly adequate. Ten days to respond? Ludicrous.
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Mo’ money
Monday, Jul 21, 2014 - Posted by Rich Miller
* From the Tribune’s indispensable Twitter app…
Illinois Freedom PAC is backed mainly by the DGA and labor unions.
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*** UPDATE 1 *** The Rauner folks just found some new audio of Quinn debating Democratic primary opponent Dan Hynes in January of 2010, months after Quinn testified on that Senate bill. Here’s what Quinn said about the Senate’s revenue bill that included the new service tax…
Transcript…
Quinn: “Rev. Sen. Meeks, who’s my friend and who’s supporting me, feels the same way I do and he got a bill passed through the Illinois Senate that I support and I testified for it in the Illinois House… We don’t forget people in need. If they need education, then we invest in it. And I think the only way to do it is to do it the right way, the way Sen. Meeks has proposed… I called up Mike Madigan that night, one minute after Rev. Meeks got that bill passed, and I said ‘Mike, how about tomorrow let’s go vote for that’ and he said ‘No.’ But I went and testified for it for two hours with David Miller.”
I’m tempted to withdraw the question. Your thoughts?
*** UPDATE 2 *** I’ve given it some thought and I’m withdrawing the question. Quinn obviously worked to pass this bill, which included a service tax, then months later touted his support for the bill.
[ *** End Of Updates *** ]
* From the AP…
Republican gubernatorial candidate Bruce Rauner said Thursday he wants to lower Illinois’ income tax rate, freeze property taxes and impose a new sales tax on some services, a plan he said would help improve the economy and grow jobs but that Gov. Pat Quinn dismissed as “a dumb idea.” […]
“This is a dumb idea and I don’t believe people in Illinois are going to buy it whatsoever,” the Chicago Democrat said […]
[Rauner’s] campaign also raised an eyebrow at Quinn’s criticism, saying the governor testified in favor of a 2009 budget proposal that included a tax on services, including dry cleaning. But Quinn spokeswoman Brooke Anderson said that testimony was part of budget negotiations. The governor only favored part of the proposal, and not the tax on services, she said.
The Rauner campaign is doing its level best to connect Quinn to Rauner’s service sales tax proposal. But Quinn’s campaign has pushed back hard against this notion that Quinn testified on behalf of the service tax, and they point to his budget address this year, during which he forcefully opposed a service tax. Quinn likely did so because Rauner long ago signaled that he was open to the tax.
* Gov. Quinn was asked specifically about the service tax during that 2009 testimony. This audio was sent to me on background…
Transcript…
Question: “Governor, there’s…we’ve had conversations talking about Illinois’ competitiveness and I know you’re concerned about that issue. But, raising taxes…income tax, and sales tax the way this bill does, what is that going to do to our competitiveness?
Quinn: “Well, I think our biggest problem when you talk about taxation and business job creation is the property tax system. We have to address that. The Illinois property tax system is antiquated, it was written in the 19th century, it’s hundreds of pages long. This is an opportunity to address property taxes and reforming them, and reducing them. I think that we have to deal with that if we want to have a good job climate and that to me is one of the features of this bill that is a very good one. It is a strong effort to get the state of Illinois pay at least half the cost of education and to reduce the property tax burden on families and businesses.”
* Brooke Anderson’s complete response, slightly edited for style…
The Governor clearly stated his position on service tax this year in his budget address.
Re 2009, the bill HB 174 was based on a long-standing proposal known as SB 750. Among key components, the bill did the following, all of which the Governor has long supported:
-raised the income tax from 3-5%
-provided signficcant new property tax relief
-provided an increase in the personal exemption
-increased the earned income tax credit
At the time, this was the last day of session and it was a comprehensive package designed to address the State’s fiscal challenges, avert the cliff and impending bond downgrades, and to reduce reliance on property taxes for funding eduction, one of the Governor’s top priorities– it was also the vehicle for revenue and a work in progress like so many things in Springfield. This is pretty obvious when you watch the clips.
The sales tax to services piece was a minor component and advocated by Senate Democrats - not the Governor- the above-listed were the key parts and sought by the Governor
When asked if he supports the bill in Q&A, the Governor says it is worthy of debate and stresses the need to reduce property taxes and balance the budget. He urges consideration and further dialogue.
The clip rauner’s camp sent is consistent with all this - the Governor makes no reference to sales taxes on services and clearly speaks to the need to reduce property taxes. Also I can’t even confirm it’s from the same committee hearing where the Governor testified because there are no details available, date, etc. - just sketchy freeze frame & audio.
Here’s more video:
* The Question: Is this a fair hit by Quinn on Rauner’s “dumb” plan, or is it a fair retort by Rauner that Quinn supported a similar “dumb” plan, or is it both or is it neither? Withdrawn.
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Save the date!
Monday, Jul 21, 2014 - Posted by Rich Miller
* I actually teared up a little when the folks from Lutheran Social Services of Illinois approached me about giving me their “Amicus Certus” award, but I was reluctant to the point of wanting to find a way to say “No.” Sure, we’ve helped raised them a few bucks, but is that really worth an award?
On the other hand, the awards dinner is another way to help raise some more money for one of the best social service organizations in the entire state, if not the nation. If they thought it would work, who am I to turn them down? Plus, Orion Samuelson got the award a while ago and I’ve been a huge fan of his ever since I was a kid riding on a tractor and listening to every word of his farm report. That man has the best voice in all of radio. So, buy your tickets now…
Amicus Certus means “True Friend.” Some award background…
A true friend is one soul in two bodies. That was Aristotle’s idea of amicus certus.
For Lutheran Social Services of Illinois (LSSI), Amicus Certus (“true friend”) is the name of the award given at our annual fall celebration, presented to a person who has made significant contributions to the human community.
Some LSSI background…
Founded in 1867, Lutheran Social Services of Illinois (LSSI) is a statewide, not-for-profit social service agency of the Evangelical Lutheran Church in America. LSSI is committed to caring for people in need, regardless of religion, age or national origin, helping them to make important changes that lead to better lives and stronger communities. Each year, tens of thousands of people receive assistance from LSSI through a broad array of children’s services, older adult care, senior housing, behavioral health and development disabilities services, and services for prisoners and their families.
* As you may recall, we donated all profits from both of my 50th birthday parties (Springfield and Chicago) to LSSI, then donated a large number of toys at my Christmas-time City Club speech last year, plus raised some cash. We’ll be doing the toy collection thing again this year as well.
Like I said, that really isn’t all that much. But I’m still honored that they think this highly of me. So buy some tickets and sponsor some tables.
/fullcourtpress
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Go, go White Sox!
Monday, Jul 21, 2014 - Posted by Rich Miller
* I think I told you this already, but years ago I turned down one of Pat Quinn’s White Sox tickets. Some of his lieutenant governor staffers were going to a game and they offered one of his tix to me.
Call me a snob, but I hate the upper deck and that’s where Quinn’s season tickets are. Dan Proft and I went to a game years ago and we sat in the upper deck and I vowed I wouldn’t ever do that again.
* Anyway, Steve Bogira at the Reader was surprised that Quinn would sit there…
I leaned down to him. “Governor—what are you doing in the upper deck?”
He turned and said, “I’ve got season tickets here. Had ‘em ten, 11 years.”
“But why in the upper deck?”
He shrugged. “You can see the game.”
Quinn doesn’t ordinarily look down on Chicagoans, but he does at Sox games.
I know what he means: the height offers a nice perspective. But this benefit is mostly canceled out by the yawning span between you and the field. Even Adam Dunn looks small. And the sound delay is disconcerting—the crack of the bat you hear in the second inning was the double in the first.
Bogira writes later in the story that Quinn was going over fundraising schedules. I asked Quinn about that when the story came out and he said he wasn’t doing fundraising stuff. He told me what he was actually doing, but it was a couple of months ago and I’ve since forgotten. I think it was bill lists.
* Anyway, that brings us to this Kurt Erickson column…
Quinn’s campaign manager Lou Bertuca sent out a fundraising appeal in which a lucky donor could win an afternoon at a Chicago White Sox game sitting in the stands with Illinois’ chief executive.
“This isn’t just a handshake and a photo op – this is a real opportunity to hang out with the governor of Illinois,” Bertuca wrote.
The letter noted that anyone who chips in $5 or more is automatically entered in the contest.
Because reporters don’t give money to politicians, I was about to close out the email.
Then I read the small print. It said, “No purchase, payment or contribution necessary to enter or win. Contributing will not improve chances of winning.”
Excellent, right? I clicked the link to enter and got this message: “Page not found.”
Oops.
Then again, I clicked the same link last week and it worked for me.
* And that brings us to the new Quinn campaign video…
Simon’s back on his game.
* And that brings us to this from Rep. Jeanne Ives…
Representative Ives is organizing a Health and Fitness Boot Camp for children in her district, ages 8-12.
Last year, the event was a great success! This year Ives has expanded the program to promote fitness throughout the summer.
I’m really excited about this event,” Ives told reporters last year. “It’s something I started doing just as a mom. Having been in the military, I knew my kids loved fitness and they loved to do it in a fun and exciting way. So we came out to Cantigny to build this bigger event about kid’s nutrition and kid’s health and fitness, which we hope to grow every year.”
This year, recruits will be able to pick up a fitness pass book at their local library, community center or Ives’ District Office. Recruits will use the pass book to track their fitness level over the summer by completing four fitness activities each week, which parents will sign off on in the passbook. Each completed week will be a raffle entry for prizes from local businesses. Parents are also encouraged to administer an initial fitness test at the beginning of the summer (optional). On August 15, those who have taken the initial assessment will re-test and if a recruit shows a 20% improvement in their fitness level they will be entered into a “Grand Raffle.”
Children can join the contest and fun at any time over the summer or just show up to participate in the Boot Camp on August 15.
At Ives’ Fitness and Health Boot Camp, recruits will participate in a variety of health and fitness events, including:
Complete an Obstacle Course by FTX Crossfit
Scale a Climbing Wall
Participate in a Fitness Test
Earn personalized, commemorative dog tags
Receive BMI testing and learn safe stretching from Advanced Healthcare Associates
Take part in basic First Aid Instruction from Cadence Health and Edward Hospital
Participate in activities from FORWARD of DuPage County
Receive samples of healthy snacks
First Aide provided by Superior Ambulance
Raffle Sponsors include:
Eagle Martial Arts
MOVES Dance Studio
Sports Authority
Sox tickets from Dan Proft, WLS-AM
I hope those Proft tickets are better than the ones we had back in the day.
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Simon responds to JBT story
Monday, Jul 21, 2014 - Posted by Rich Miller
* Remember the story last Wednesday about Comptroller Judy Baar Topinka talking to Gov. Pat Quinn about her hopes that her son would land a job at SIU? Topinka’s office insists she didn’t ask Quinn to help her son get the job. Quinn’s campaign says the governor didn’t understand what she was talking about.
Well, it took a while, but Sheila Simon’s comptroller campaign has finally responded…
“Only someone who has been a politician in Springfield for 30 years would show up at a bill signing to benefit the victims of tornado damage and ask for a job for a family member. The Office of Comptroller cannot be entrusted to a person who treats taxpayer-funded jobs like bargaining chips,” campaign chief Dave Mellet said.
* Simon also ran an ad on Facebook late last week…
Apparently, the Quinn/Simon breakup is now official.
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Caption contest!
Monday, Jul 21, 2014 - Posted by Rich Miller
* My old buddy Lance Trover is a major Parrothead, so he proudly texted this photo of himself and Jimmy Buffett last night after running into the living legend at Shaw’s Crab House…
Lance is a spokesman for Bruce Rauner’s campaign. I asked him if he told Buffett who he worked for…
Haha. Left that part out.
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Breaking an NRI paradigm
Monday, Jul 21, 2014 - Posted by Rich Miller
* The Sun-Times makes a pretty strong case that a prevailing media paradigm is false…
Republicans repeatedly have called Gov. Pat Quinn’s Neighborhood Recovery Initiative anti-violence grant program from 2010 a “political slush fund” and a taxpayer-funded, get-out-the-vote effort.
But if the anti-violence program’s design truly was about investing public dollars to gin up enough votes for Quinn to win his election that year, a new, first-of-its-kind analysis by the Chicago Sun-Times found the alleged strategy may not have delivered as planned.
Yes, Quinn narrowly won in 2010. But the areas in Chicago and suburban Cook County that got anti-violence money under the program only helped pad the governor’s winning margin over Republican Bill Brady.
* The evidence…
In Chicago, the Quinn-Simon ticket registered a 2 percentage-point increase in city neighborhoods that got NRI funding compared with the 2006 Blagojevich-Quinn ticket.
By comparison, in city neighborhoods that didn’t receive Neighborhood Recovery Initiative funding, the Quinn-Simon ticket registered a 1.9 percentage point uptick over what Blagojevich and Quinn got in those same areas in 2006.
Go read the whole thing, including the charts. Kudos to the Sun-Times for digging so deeply into the numbers.
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Polling the “Rauner tax”
Monday, Jul 21, 2014 - Posted by Rich Miller
* My weekly syndicated newspaper column…
“This morning,” 1,063 respondents were told the evening of July 17th during a Capitol Fax/We Ask America poll, “Republican candidate for governor Bruce Rauner released an economic plan for Illinois.
“That plan calls for a freeze on property taxes and rolling back the 2010 tax increase. It also implements a new tax on services, such as advertising, legal services, and mini-storage centers. We’d like to know whether this type of plan would make you more likely, or less likely to vote for him.”
Rauner had most certainly tested his service tax proposal backwards and forwards before presenting it to the public last week, so I figured it had to poll fairly well. It did.
The poll found that 53 percent said they’d be more likely to vote for Rauner, while just 32 percent said they’d be less likely to vote for him and 15 percent said it made no difference.
As we’ve discussed before, Rauner has struggled a bit with women, but they actually liked the idea more than men. 56 percent said the idea made them more likely to vote for Rauner, while just 28 percent said they were less likely. The male split was 47 percent more, 39 percent less.
The highest regional support for the plan came from the suburban collar counties, where Rauner did the best in the primary. 66 percent of collar county voters said the proposal made them more likely to vote for Rauner, while 25 percent said less. The split among Downstaters was 53-27, it was 49-38 among suburban Cook County voters and he was upside down in Chicago, where he always polls poorly, 32-50.
Just 17 percent of Republicans said they’d be less likely to vote for Rauner while 66 percent said they’d be more likely. Among independents, 56 percent were more likely and 29 percent were less likely to vote for him. And among Democrats, 33 percent were more likely while 53 percent less likely.
Why does this look so popular? Well, people hate that income tax hike and they hate their property taxes. On its face, this could look like a “magic bullet” to folks.
There are no magic bullets, of course. If there were, they would’ve already been used.
Rauner specified a mere $577 million in new annual revenues via his service tax, which is nowhere near the $8 billion he wants to give up from the income tax hike.
Rauner says he’d phase out that tax hike over four years, and he’s said he could accomplish this with economic growth. According to the state’s Commission on Government Forecasting and Accountability, income tax revenue growth averaged just 6.8 percent between Fiscal Year 1998 and Fiscal Year 2013. Rauner wants to grow those revenues by almost 67 percent over just four years.
“Rauner’s plan would add more than a half-billion dollars to state coffers, but wouldn’t come close to replacing the $8 billion from the taxes he would roll back,” polling respondents were told. “Do you think the state can afford the Rauner plan?”
Illinoisans were split, with 41 percent of the respondents saying the state can afford it and 43 percent saying it can’t.
“They want the benefits of overall lower taxes, but doubt the viability,” said pollster Gregg Durham. The poll had a margin of error of +/-3 percent. 28 percent were mobile phone users.
And that second set of numbers might’ve been far worse had more specifics been used.
“Too bad [Rauner’s plan] is entirely phony and false and paid for by massive cuts to education,” texted Gov. Pat Quinn’s campaign spokesperson Brooke Anderson last week. “Wonder how that polls.”
Anderson rightly pointed out that the state budget includes around $16 billion in “non-mandated” expenditures – the rest is pretty much required and/or locked-in spending.
Without massive, unprecedented growth, Rauner would have to cut that $16 billion in spending in half - and education also makes up half of that $16 billion. “Talk about decimating public education - you’re pretty much eliminating it,” Anderson said, giving us a likely preview of the upcoming TV attack ads.
Not to mention the massive fiscal cliff created by this year’s state budget, which adds billions in deferred costs to next year’s budget. The only way to avoid that is to raise the rate back up to 5 percent after January 1st, when it’s scheduled to go down to 3.75 percent.
Rauner’s campaign refused to talk about specific phase-out percentages and timelines last week. But the cold hard reality is, that tax hike isn’t going away very soon, no matter what he says.
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