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Helping the medicine go down

Sunday, May 28, 2017 - Posted by Rich Miller

* Tribune

Rauner has frequently touted his desire to increase the state’s share of funding for schools. It would take a significant tax increase to do it in a way that local property taxes could be pared back, though. At the moment, school districts and vendors are owed more than $1 billion because of the budget impasse’s effect on state cash flow and delayed payments, State Board of Education records show.

The acknowledgment that Senate Democrats might even consider a more modest temporary tax freeze for schools is a recognition that Rauner’s criticism over their lack of action may be having some political impact — something that has yet to be felt by Democrats in the House.

“I know (Rauner) knows it polls well. Everything he talks about he knows polls well,” said state Rep. Greg Harris, a Chicago Democrat who is a key point person on budget issues.

* My weekly syndicated newspaper column

A new statewide poll finds that strong opposition to an income tax hike to solve the state’s budget problems significantly eases when the tax increase is coupled with a property tax freeze.

That’s important because Gov. Bruce Rauner has insisted that he won’t approve any tax hikes or a budget without a four-year property tax freeze. Democrats in the General Assembly, however, have resisted the governor’s freeze proposal. And the Senate Democrats last week went ahead and passed a budget with tax hikes without including Rauner’s freeze.

The poll of 500 likely Illinois voters was taken May 23rd by Fabrizio, Lee & Associates, a Republican firm. The poll’s questions that we’re going to look at today weren’t horribly biased, even though the poll was paid for by the Illinois Policy Institute (which for whatever reason didn’t include the property tax freeze numbers in its press release). The poll’s margin of error was +/-4.4 percent and 40 percent were reached via their mobile phones.

“One of the elements of a proposed solution for the Illinois state budget impasse involves raising the state income tax,” the pollster told respondents. “Do you favor or oppose a state budget that includes raising the state income tax?”

Just 31 percent favored an income tax hike, while 64 percent were opposed and 51 percent strongly opposed it. No surprise there. Every poll I’ve ever seen had numbers similar to those.

“One of the elements of a proposed solution for the Illinois state budget impasse involves raising the state income tax but at the same time enacting a property tax freeze,” respondents were told. “Do you favor or oppose a state budget that includes raising the state income tax but also includes a property tax freeze?”

-
The percent of those favoring the “hybrid solution” involving a freeze jumped 8 points to 39 percent. That’s still far from a majority, but not too bad, considering more money would be coming out of their pockets to fund a supremely dysfunctional state government.

The more dramatic movement came from the opposition. A slim majority of 51 percent were still opposed to the hybrid solution, but that’s down 13 points from the income tax-only question. And those who were strongly opposed, which indicates that they might cast their vote based on the topic, dropped 17 points, from 51 down to a mere 34.

So, it’s not difficult to see why Gov. Rauner has been talking about almost nothing but a property tax freeze lately. He did a bunch of TV and radio interviews last week saying he absolutely won’t sign a budget unless it includes the freeze. Simply put, the issue moves numbers.

The freeze is like that old Mary Poppins song, “A Spoonful of Sugar.” It helps the medicine go down, although definitely not in a “most delightful way.” There are undoubtedly other issues which could help make a tax hike more palatable, but we’re stuck with this one because the governor is so adamant about a win on this topic.

If you look at the crosstabs, you’ll find that 79 percent of Republicans are opposed to raising the income tax, but that opposition drops 20 points to 59 percent when coupled with a property tax freeze. Opposition by independents drops from 66 to 53. And opposition by Democrats falls from 52 to just 45.

Now, look at those who are strongly opposed to the hybrid plan that Rauner is pushing and the results are even more dramatic.

72 percent of Republicans were strongly opposed to an income tax hike, but that falls 28 points to 44 percent who were strongly opposed when the tax hike is coupled with a property tax freeze. 54 percent of independent voters strongly opposed an income tax increase, but just 39 percent opposed it when attached to a property tax freeze. And strong opposition dropped from 34 percent to 25 percent among Democrats.

Also, when respondents were given a choice, 45 percent said only cut spending and don’t raise taxes, while 41 percent said the state should cut some spending and raise some taxes. That’s exactly what the Senate Democrats did last week, but most people don’t know that.

However, when it was pointed out that “Illinois already pays the highest property taxes in the country and has the fifth highest overall tax burden,” and that some believe another tax hike would drive more people out of the state, 54 percent said only cut spending and don’t raise taxes, while just 36 favored a mix of cuts and tax hikes.

Property taxes are a killer issue. The Democrats need to come to terms with that.

* This column was based on a subscriber-only story from last week. I received this e-mail after it was published…

Rich,

Thanks for including the poll in this morning’s email. Your take is fascinating – and perhaps representative of your point of view of the situation.

You want a deal. A budget, any budget. So you want to justify a tax increase. Therefore, when you look at these results you don’t see how the majority of Illinoisans feel; you see the most unpopular point of view and then attempt to mainstream it. It’d be like reporting on the most recent Kirk v. Duckworth contest, and leading with Kirk’s measly 40 percent. In our poll, only 16 percent of respondents “strongly favor” a hybrid solution (as you phrased it). More than half of respondents do not favor an income tax increase combined with a property tax freeze. That’s the dominant point of view.

There’s another way to look at that question, too. People who “somewhat favor” are essentially saying “Ehh…. maybe?” The fact that some people would maybe consider swapping an income tax increase for a property tax freeze illustrates the utter desperation of homeowners in Illinois. Remember, a freeze isn’t a great deal. We’d be freezing an already-high bill. But homeowners are seeing their property tax bills climb and their home values plummet. If they try to escape by reselling, it’s a nightmare. People are desperate, and that’s why some people would entertain the idea of keeping the higher taxes off their property tax bill and paying on the income side.

Of course, the bottom line from this poll is this: When the Illinois tax burden is mentioned, nearly every cohort shifts toward support for an all-cuts-and-no-tax-hike state-budget solution.

Diana


Diana Rickert
Vice President of Communications
Illinois Policy Institute

The poll is here, the crosstabs are here.

* Related…

* Illinois Senate Democrats twerk taxpayers with latest budget attempt: [The Senate Democrats’] plan will take $1,124 from each household in the state for a total hike of $5.4 billion. They also want to extend the state sales tax to everything from home improvement services to tattoos to your Netflix subscription. For what? There’s no property tax relief in this plan. There are no reforms. There’s nothing to pay down the $14.4 billion bill backlog. It’s likely dead on arrival — even Illinois House Speaker Mike Madigan was balking at it.

       

16 Comments
  1. - Canon - Sunday, May 28, 17 @ 2:03 pm:

    Or another analogy would be looking at dan Proft’s 6% or pat Hughes 19% and saying their messages resonated.


  2. - JB13 - Sunday, May 28, 17 @ 2:16 pm:

    It most certainly is the spoonful of sugar. Very few are willing to accept a huge income tax increase without a guarantee that their local school district, city and county aren’t just going to hike taxes by another $500-$2,000 per year because the state tax hike goes to pay pensions and salary boosts for state workers. Would that happen? I don’t know. But what reason do taxpayers have to trust anyone right now? And that is the messaging problem Democrats will face in 2018. You say they’re the “grown-ups.” We have decades of evidence to the contrary.


  3. - Dan Johnson - Sunday, May 28, 17 @ 2:24 pm:

    Lots of people prefer a government with great services and no taxes. Similarly, lots of people prefer the state stop deficit spending, not raise taxes and fully fund schools. And lots of people want to go to heaven but they don’t want to die
    Everyone who reads this blog knows the tax cut of ‘15 had led to more debt and recession-creating spending cuts. Some prefer to play pretend as if there is any other path but the Senate Dem budget (generally speaking) - meaning there is no other fiscally responsible path than reversing the ‘15 tax cut.

    Lots of people, probably a plurality, prefer not to be responsible. They prefer to pretend. Let’s hope we all do our best to increase the number of responsible voters and not increase or strengthen the fiscal fantasy story that is ultimately at the heart of our state’s debt load.


  4. - winners and losers - Sunday, May 28, 17 @ 2:36 pm:

    ==It would take a significant tax increase to do it in a way that local property taxes could be pared back==

    Who is proposing an income tax rate of 7 to 10%?

    A property tax freeze would take away MORE money from schools that would be provided by the $350 million increase in State funds being discussed.


  5. - Grandson of Man - Sunday, May 28, 17 @ 2:53 pm:

    Democrats losing politically on property taxes, a very key issue, is not smart politics. I don’t want the people for whom I vote to blow it politically. The House passed a permanent property tax freeze in 2015. Democrats should seriously consider a four-year freeze and think hard on the political consequences of not passing it.


  6. - pawn - Sunday, May 28, 17 @ 3:23 pm:

    Diana is being disingenuous when she says that people want an all cuts budget. when you ask people about specific areas to cut, they don’t want to cut any of those….


  7. - titan - Sunday, May 28, 17 @ 3:48 pm:

    Did any of the polls set out the sorts of cuts needed to go along with the no or low tax hike scenarios?


  8. - Former Merit Comp - Sunday, May 28, 17 @ 4:23 pm:

    Is she forgetting the progress that was made with the Quinn tax increase without service taxes and no property tax freeze? I’m no expert but sure thought the state was heading in the right direction before the election


  9. - Cassandra - Sunday, May 28, 17 @ 4:29 pm:

    How clear is it that a property tax freeze would provide relief to any particular homeowner. Indeed, couldn’t individual property taxes actually go up even if a freeze were in place? It’s complicated, but I do know that if I appeal a property tax assessment and win, somebody else pays what I don’t have to. The total amount needed remains the same.

    We know eligible working citizens would feel an income tax increase though, and those in the lower range would feel it quite a lot.

    Anyway, it would be wise for our govt representatives to look any property tax freeze offer carefully in the mouth, so to speak.


  10. - Louis Capricious - Sunday, May 28, 17 @ 4:48 pm:

    === Indeed, couldn’t individual property taxes actually go up even if a freeze were in place? ===

    Under the governor’s plan, yes. He said repeatedly during his monologue to IPI that the freeze would apply to the levy. Within a levy, the taxes paid by individual property owners can go up or down.


  11. - Lynn S. - Sunday, May 28, 17 @ 6:26 pm:

    As someone who just finished a term on a school board that lives in with PTELL, frustration doesn’t begin to describe my feelings.

    People like to gripe that high property taxes kill the value of the home they’re trying to sell, but wait to see what happens if your local school district has no revenue increases while their cost base goes up. Does anyone who reads this blog honestly believe that staff and all others who supply school districts will accept a four year freeze on the money owed them?

    The districts that have reserves will start draw downs while they take a year to study where they will make cuts.

    Other districts will just start whacking immediately.

    All districts will lose programs.

    And homes will lose even more value.

    Is this truly what people want, or are they truly that unaware of the short-term gain, long-term pain they’re advocating for?


  12. - Anon221 - Sunday, May 28, 17 @ 8:51 pm:

    One way to provide property tax relief would be the change the percent that could be taken off on the State tax return. Until the State school funding issue is resolved, property owners are paying a portion of the State’s share of school funding. Just as there are EICs and personal exemptions that help lower taxes paid, why not increase the percentage that can be claimed for property taxes paid? I’m not being facetious, and I am willing to take criticisms over my suggestion.


  13. - Anon221 - Sunday, May 28, 17 @ 9:02 pm:

    Background on the 5% max tax credit for individual property owners-

    http://www.revenue.state.il.us/Publications/Pubs/Pub-108.pdf


  14. - Lynn S. - Sunday, May 28, 17 @ 9:16 pm:

    Anon221,

    Not a terrible idea, but remember that increasing the amount of property tax credit allowed reduces the amount of revenue the state collects.


  15. - Anon221 - Sunday, May 28, 17 @ 9:29 pm:

    Lynn S.- Yep, that is the trade off. But one reason our property taxes are so high is because of the failure of the State to fund local school obligations. I’m also not proposing this be permanent. Perhaps tie it to achieving an overall decrease in the school portion of local property tax bills to 20-50% of the total currently taxed and then sun setting it for that locality.


  16. - Mockingjay - Monday, May 29, 17 @ 7:24 am:

    Ignore these polls at your own peril. Hillary didn’t poll/look at polls, remember what happened to her.


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