Rauner talks taxes… kinda
Monday, Dec 8, 2014 - Posted by Rich Miller
* Bruce Rauner denied today that his post-election warnings about the sorry fiscal state of Illinois’ budget are designed to lay the groundwork for a tax hike…
“I’m not saying that at all. I think it’s important for voters to understand exactly what’s going on,” Rauner said. “Our politicians have been making short-term borrowing to fill budget gaps. We are going to have honest budgets going forward.”
* But when asked if the 3.75 percent tax rate as of January 1st might be increased, Rauner didn’t say “No”…
“As I’ve said, we want to roll the income tax hike all the way back down to where it was in 2010. We’ll work that over time and right now the law is 3.75 and that’s what we’re going to manage with.”
When asked if that meant he was committed to 3.75 tax, Rauner hedged, saying “nothing will be off the table.”
“Well, 3.75 is the law. But I will also say this: everything will be assessed as an opportunity to getting our economy growing again. Everything will be assessed as a way to get back into a healthy, fiscal position. Nothing will be off the table,” Rauner said. “But 3.75 is the law. I’m going to implement the law, we have to plan for that. And the critical thing is over time we get the income tax burden reasonable and the real challenge and the real answer for revenue in the future is to become a growth state again. We got into this mess by only thinking short term. Let’s talk about short term but let’s also talk about long-term competitiveness.”
* But as Steve Schnorf said the other day about a Voices for Illinois Children budgetary study which predicted cuts of up to 33 percent if the tax hike partially expires on schedule…
This analysis, while almost certainly mathematically correct given whom it was done by, simply ignores the fact that the GA isn’t going to pass a budget that contains 25-33% cuts in all those programs. So, on to plans B,C, etc.
Exactly.
* More from Rauner…
“We don’t have the time to mess around, we are in deep, deep trouble financially,” Rauner told a meeting of the Illinois Farm Bureau at a downtown Chicago hotel. “The next 24 months are going to be rough. And I apologize. I ain’t going to be Mr. Popularity for a little while. That’s OK. Four years from now I think though, everybody will appreciate what we did.”
Also…
He did offer at least one hint Monday on how he’d govern, saying it’s possible some government agencies may be consolidated while numerous boards and commissions could be abolished. That’s a common move when a new Illinois governor takes over.
Consolidation rarely saves much, if any, money.
- Ghost - Monday, Dec 8, 14 @ 2:50 pm:
I appreciate taking Rauner to take for bad promises…. But in the end it seems like we are playing a game of chicken with the states future. Instead of pushing him to back off of a needed tax increase; phased or permanent, perhaps we should support him for doing the right thing. We don’t need this mess made worse by daring the gov to not raise taxes. We need to support a necessary solution and that he is man enough to consider doing the right thing in spite of the past. Open to change is better the stubbornly marching off a cliff.
- Out Here In The Middle - Monday, Dec 8, 14 @ 2:52 pm:
“Consolidaton rarely saves much, if any, money.”
Just curious . . . is the 1996 consolidation of 7 agencies into DHS completed yet? (/snark)
- Oswego Willy - Monday, Dec 8, 14 @ 2:55 pm:
Campaigns are hard, governing is difficult.
When Rauner decides to talk like a governor who is looking at things realistically, instead of a candidate who, until recently, didn’t know how bad things…really are…when Rauner wants to talk like a governor, I’ll listem.
It’s as though Rauner believes rhetoric is sound policy. Yikes.
- MikeMacD - Monday, Dec 8, 14 @ 2:56 pm:
Oh, gosh.
He actually talks like that?
- Andy S. - Monday, Dec 8, 14 @ 2:58 pm:
My fear is he will end up doing the same thing every governor prior to Quinn did - not making the required pension contributions. The rating agencies will not like it, but it is easier politically than raising taxes. This is yet another reason why I hope and pray the pension ruling is not expedited by the ISC. If Rauner fails to make the required contributions in FY 2015 and/or FY 2016, maybe then the judges will finally open their eyes and see that underfunding impairs the pensions long term.
- walker - Monday, Dec 8, 14 @ 3:04 pm:
These statements generally sustain my tentative optimism. Only one clear problem above.
The idea that the kinds of reductions in corporate State Income Tax rate he has discussed, will have much impact on “long-term competitiveness” is foolishness. Many more important things to work on first.
We will know he is serious and smart, when he walks away from any ideological blindness on taxes.
- VanillaMan - Monday, Dec 8, 14 @ 3:08 pm:
Our new governor wants the ability to lower expectations right away, retain his options when dealing with the Democrats in control over the GA, and avoid making any promises or pledges.
Sure. No surprise there. Mr. Rauner wanted to be elected governor. Now he wants to be a good governor, but has no experience in government. He didn’t make the mess he is inheriting, and like every newly elected governor, is trying to fathom the depths of the disasters that he will become responsible and accountable to fix.
Understandably, he has no clue. He expects his groups of experts to sort out the details and he hopes they can figure out how he can keep his promises and fix the situations he has bought into with his election.
Mr. Rauner didn’t expect the Illinois GOP to be so moribund. He sank millions into it this year and expected to find himself with a few new faces in the GA in debt to him. That didn’t happen. Worse, he discovered that he won the election without coattails. He is all by himself in his dingy, surrounded by Democrats swimming in circles around him, without land in sight. Mr. Rauner won nothing last month, except his own office. That means he has the power to veto the legislation sent to him, or attempt to promote legislation that has little chance of passing.
Please continue to reduce expectations, Mr. Rauner. Better yet, reduce your own. Now. The next four years will mean that you need to work with Mr. Cullerton and Madigan and hope nobody notices how you will need to sell out your promises to shake up Springfield. Focus on doing well. Rebuild the Mansion. Get the state government stable in some way. Pass a couple of bits that could make Illinois attractive to current businesses.
The bar is set low. Start digging a trench.
- Norseman - Monday, Dec 8, 14 @ 3:19 pm:
Trying to gather Rauner’s real intentions from his speeches is a waste of time. I’ll just read about his actual actions in Mr. Miller’s classy Cap Fax.
- Tim Snopes - Monday, Dec 8, 14 @ 3:38 pm:
“I’m not a politician. I don’t like to talk about stuff. I’d rather get stuff done.”
Sounds good until you need a little help.
- Anyone Remember - Monday, Dec 8, 14 @ 3:42 pm:
No disrespect to the Governor-elect, but in terms of consolidations, didn’t Blagojevich / Filan get all the low hanging fruit? Hard pressed to think of any big ticket items left undone (unless one wants to merge IDOT with the Toll Highway Authority).
- Skeptic - Monday, Dec 8, 14 @ 3:55 pm:
“Blagojevich / Filan get all the low hanging fruit?” And one of Blago’s (DFPR) has already been partially undone. And one that hasn’t is CMS. You do the math.
- Nobody - Monday, Dec 8, 14 @ 3:56 pm:
Re-amortize the pension debt with an 80% funded goal.
Graduated Income tax.
Extend the sales tax to services exempting medical care and other such vital services.
Tax retirement benefits over a certain income level (i.e. amount over $75,000 for individuals.
Bond other unpaid bills.
And then fund essential services appropriately.
- Oswego Willy - Monday, Dec 8, 14 @ 4:06 pm:
Re-amortize the pension debt with an 80% funded goal. - Quinn made the payments, you advocate not by trying to re-amortize, and get everyone to agree to 80% given recent court rulings? Heavy lift…
Graduated Income tax. - “See ‘Illinois Constitution’…”
Extend the sales tax to services exempting medical care and other such vital services. - Need 30 HGOP votes and 15 SGOP votes minimum, ok?
Tax retirement benefits over a certain income level (i.e. amount over $75,000 for individuals. - This might be the “easiest”, that should say the most about this.
Bond other unpaid bills. - You seem the credit rating? Plus bonds get paid first. First. Better be able to get that debt extra low, because cuts will still hurt/sting.
And then fund essential services appropriately. - Of $35 Billion, about $16 Billion isn’t tied to a que order, so how will all that work?
If things are so easy, it already woukd be done…
I honestly appreciate the list, however.
- Nobody - Monday, Dec 8, 14 @ 4:26 pm:
Certainly wouldn’t be easy, but then again the easy way is what got us into this mess. Obviously, the constitutional issue would have to be addressed and the politicians would have to have real and honest conversation with each other and the public and be willing to make some unpopular votes. Each point on the list is meant as a beginning point to that honest conversation and most of it comes from Ralph Martire’s proposals over the years. I venture to say he has a much better grasp of these issues than I ever will…..even after 40 + years of watching Illinois politics. The older I get, the less I actually know. Hell, I get better income from spending money via cash rebates on my credit cards than I do from saving it in traditional savings accounts. I remember when I had to pay to borrow money for 30 days. Oh well, if nothing else, it will be interesting to watch.
- Wensicia - Monday, Dec 8, 14 @ 4:37 pm:
Until he’s willing to offer answers, a plan, to solve these problems, I wish Rauner would shut up.
- Ben - Monday, Dec 8, 14 @ 4:41 pm:
Nobody—borrow, tax,tax, tax, borrow and then fund “appropriately”????? Not much new there.
- anon - Monday, Dec 8, 14 @ 4:49 pm:
If Gov. Rauner asks for a boost in the income tax,then Republicans who support him will have some splainin’ to do. They signed on to a bill in 2011 to immediately repeal the whole 5% hike. If the GOP believed the state could make do with a 3% rate under a big spending Democratic governor, then why wouldn’t 3.75% suffice for Rauner?
- Wordslinger - Monday, Dec 8, 14 @ 5:13 pm:
VMAN, you’re the poster child of lower expectations. The lowest.
How do you stand it? I’d slit my wrists if I thought like you.
Here’s the way you do it, cousin. You bust your ass, every day, to leave it better than you found it. Thats the whole ballgame. That’s not a secret.Thats what you do.
You honor your parents . You advance your children and your generation. When you’re strong, you take care of those who are not. I picked that up at the First Lutheran Church, Jesus h Christ almighty, how hard is that?
You confuse me. You’re a union state employee who hates union state employees, and you’re a phony holy man who disrespects fhe Gospel.
- Soccertease - Monday, Dec 8, 14 @ 8:04 pm:
OW, An 80% pension funding level would be acceptable by bond raters, actuaries, accounting principles, etc. While 100% is ideal, 80% is a viable money-saver for Rauner to pursue. I never understood the knee-jerk reaction to go from 40% funded to 100%.
- Oswego Willy - Monday, Dec 8, 14 @ 8:16 pm:
- Soccertease -,
I hear ya, my tact is coming from Quinn fully funding, and with no clear Constitutional answer in sight, and the optics of going from 100% with no Constitutional plan, to 80% and still having no acceptable plan, and the unknown.
Others far smarter, and far wiser, keep reminding me about pension constitutionality. I worry to a “default” of not going backwards in funding until I can see the road ahead.
All good, I just have that bugaboo right now, possibly to a fault…
- RNUG - Monday, Dec 8, 14 @ 8:55 pm:
- Oswego Willy -
Technically, Quinn was making the “full” 1995 ramp mandated payments … which has been ramping up since 1995 to the payment level which was / is back-end loaded with large payments later and needed to get the funds to 90%. S far as i can see, the only reason 100% was targeted in SB-1 is it was the sop / consideration thrown to the retirees to permit the theft on the other side of the equation.
- walker - Monday, Dec 8, 14 @ 9:21 pm:
Word 5:13 above: You might have stomped a little harshly for this dance floor.
- Oswego Willy - Monday, Dec 8, 14 @ 9:24 pm:
===So far as i can see, the only reason 100% was targeted in SB-1 is it was the sop / consideration thrown to the retirees to permit the theft on the other side of the equation.===
This is where I learn.
Understood, and thanks for straightening me out. I think all SB1 did for me, after all, is make me worry. - RNUG -, you talk me down from the ledge, even when the ledge is too much caution for my, and the state’s own good.
Thanks.
- A guy - Tuesday, Dec 9, 14 @ 7:24 am:
Slinger, I’m with Walk. Too harsh is the nice way to put it. A dude with your ability to communicate can do a lot better. Read it again. It’s more than a little too harsh.
- VanillaMan - Tuesday, Dec 9, 14 @ 9:39 am:
Mr. Wordslinger -
I know you want to really take Mr. Rauner to the woodshed, but he isn’t governor yet.
After Pat Quinn was elected in 2010, I discovered that it was best if I just take time off from commenting here and give the man a fair chance. I know that Pat Quinn did his best and that he is a good man in many ways, so it would be only right to give him some breathing room. After Blagojevich, we all needed a break. At least I needed one.
So I disappeared for a long while.
I recommend that you consider giving Mr. Rauner a break. You have a lot of reasons not to like him, but he is going to be inaugurated and it is good for all of us if he is successful.
What I have written above is the acknowledgement that incoming freshmen governors usually need to lower expectations. They do this because they won the offices without fully realizing the enormity of what it is they won.
I am rather pleased to see a more humble Bruce Rauner. It means that he is afraid of his tasks ahead. If he continued to bloviate as he had during the campaign, I’d actually be very concerned. What we face together as a state is much bigger than he realizes.
I am glad he is realizing it and he is backing off his campaign exuberances. He is lowering that bar of expectations. That is what new governors do.
I have no idea why you would go after me for acknowledging these things.
Give the new governor a break. He is in over his head.
Give us all a break. We’re doing the best we can.
- Anyone Remember - Tuesday, Dec 9, 14 @ 9:57 am:
Skeptic
DFPR is dedicated funds, largely. IF you totally abolish CMS, after deducting the Group Insurance funds the GRF budget is only about $700 million. You’d need some of Jack and the Beanstalk’s magic beans to make that replace the temporary tax increase.
- Cuddles - Tuesday, Dec 9, 14 @ 11:53 am:
Guy: You are the last person on this blog who should advise others regarding tone. Actually, a lot of us would do well by living as Slinger suggests.