Today’s number: 1.4 percent
Thursday, Jan 14, 2016 - Posted by Rich Miller
* As you already know, Gov. Bruce Rauner promised that he would send over documentation on how the state would benefit from his Turnaround Agenda.
The documentation is here and here. It was originally sent to legislators last September.
* Some of it is quite exaggerated. For instance…
[Reforming the prevailing wage] lowers the costs paid by taxpayers for construction projects by implementing true competitive bidding. In many cases, prevailing wage increases labor costs by more than 20 percent. From 2002-2011 state and local governments overspent by $1.6 billion on education construction projects alone due to our prevailing wage laws. Altogether, local units of government could save $1.1 billion per year with prevailing wage reforms. That is money that could go directly into classrooms and our communities, but instead we spend it overpaying for projects.
Labor’s cost is usually somewhere around 20 percent, so that’s a fantasy unless we can eliminate workers entirely. Plus, I’ve already looked at this…
A June, 2014 study conducted by the Anderson Economic Group for the far-right Illinois Policy Institute, the Illinois Association of School Boards, the Illinois Chamber and the Illinois Black Chamber found that eliminating the prevailing wage would’ve saved local school districts $126.4 million in 2011 (that’s in 2013 dollars, by the way). […]
So, even if every single local school district throughout Illinois immediately stopped paying prevailing wage rates on construction projects (not gonna happen) and even if eliminating the prevailing wage does indeed save as much as the Anderson study projected (doubtful), school districts could’ve saved a grand total of 0.74 percent of their property tax budgets, which is not much more than a rounding error. Now figure, in reality, savings of at most half that amount and we’re looking at about a third of a percentage point. That’s not even a rounding error.
Not to mention that the total percentage saved from allowing local governments to opt-in to eliminate the prevailing wage in their actual operating budgets is quite a bit smaller because to get an accurate count you’d have to add in revenues from local sales taxes, state and federal money, etc. Charitably, are we talking maybe a quarter of a percentage point saved here? If that?
* Keep in mind that Chicago’s janitorial and cafeteria contracts have become a nightmare…
Every year state government adds mandates onto our school districts and local governments. Additionally, under Governor Blagojevich, the state severely restricted the ability of school districts to contract with outside vendors for things like busing, janitorial and cafeteria services.
Chicago Public Schools is already relieved of many of these mandates and restrictions, but we impose them on every other district, despite the fact that schools districts have requested relief from these requirements for years. Just last month, the Large Unit District Association (LUDA), which represents the 55 largest school districts in the state and educates more than half of the state’s school children, wrote to our administration to again request relief from these mandates. A copy of LUDA’s letter is enclosed. Let’s give our schools the help they are asking for – it doesn’t cost us anything and can save them more than $200 million.
* And what would these reforms do for the state’s economy?…
• Personal Income Tax Savings by Ending Out- Migration: $140 million
• Revenue Growth by Making Illinois “Average” in Unemployment: $150 Million
• Revenue Growth if Average Gross State Product: $220 Million
All this pain inflicted to maybe produce an additional $510 million in revenues?
For crying out loud, that’s a 1.4 percent increase over Fiscal Year 2015.
…Adding… As a pal just pointed out, the additional projected revenue probably won’t even cover the interest on the state’s backlogged bills from this impasse.
…Adding More… From a Republican friend…
Plus you need to factor in the cost of their tax increase into their economic growth calculation. The point is that they can’t argue that these anti-labor changes will magically produce $510 million of economic growth/revenue and then discount the negative effect of a tax increase on economic growth.