Capitol Fax.com - Your Illinois News Radar » Pritzker revenue need “guesstimate” revised to $10.7 billion
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Pritzker revenue need “guesstimate” revised to $10.7 billion

Tuesday, Sep 11, 2018

* This post was was originally an update to an earlier post, but I thought it deserved its own space. JB Pritzker said this during a radio interview today

There are two big things that are driving the exodus that’s occurred from Illinois. The first is that we have very high property taxes, and the reason for that is that we pay for our schools improperly in the state. Most of the funding for local schools comes from local property taxes and it really should come from the state. We should be about half and half.

So, going by the Civic Federation’s 2015 numbers, we can get a rough idea about what this would cost.

Local property taxes fund about $18 billion in school spending out of about $29 billion in total. Subtract out the 12.3 percent supplied by the federal government and “other local” funding, and you wind up with about $25.4 billion. Half of that would be $12.7 billion. So, that would have been a 2015 increase in state funding, and corresponding decrease in local property tax funding for K-12 education of $5.3 billion.

* My “guesstimate” last month for Pritzker’s proposed spending figured he’d increase K-12 by about $500 million. If we take Pritzker at his word, my guess was too low by maybe $5 billion.

So my earlier guesstimate of $5.7 billion for new net revenue needs should be revised upward to $10.7 billion.

- Posted by Rich Miller        

34 Comments
  1. - Pick a Name - Tuesday, Sep 11, 18 @ 3:03 pm:

    LOL


  2. - Highland Il - Tuesday, Sep 11, 18 @ 3:06 pm:

    Two words, “forensic audit”. /s


  3. - Oswego Willy - Tuesday, Sep 11, 18 @ 3:07 pm:

    Messaging is unraveling faster than a Roy Hobbs liner hit by lightning….


  4. - DuPage Bard - Tuesday, Sep 11, 18 @ 3:11 pm:

    See even if he doesn’t say what his plans are for spending the media gives it what it wants. This is the line JB hasn’t been able to navigate, how to answer a question yet also convey his message clearly to people.
    Rauner will now use Rich’s numbers to whack JB. Agree with Willy these are rookie mistakes.
    BTW where is the billions in corruption and waste Rauner has said he’s sitting on?


  5. - OneMan - Tuesday, Sep 11, 18 @ 3:12 pm:

    To give you an idea of the scope of Rich’s estimate. Using 2016 tax numbers
    http://www.revenue.state.il.us/AboutIdor/TaxStats/2016/2016_Preliminary_IIT_IL_1040_Return.pdf

    In the 2016 tax year, Illinois collected about 14 Billion in income taxes.

    About 3 billion of that came from people with an AGI of over $500,000

    If you wanted to get the 10 billion from the folks who made more than $500,000 you need a 15.7% tax rate starting at dollar 1 for those folks.


  6. - Silicon Prairie - Tuesday, Sep 11, 18 @ 3:14 pm:

    The exodus got a little bigger today JB. 1000 jobs at Takeda transferring to Boston and closing Deerfield IL facility


  7. - Rich Miller - Tuesday, Sep 11, 18 @ 3:17 pm:

    Yes, Silicon Prairie, they made a super-fast corporate announcement to kill 1900 Illinois jobs after hearing from the future that Pritzker would come up with this idea.


  8. - Oswego Willy - Tuesday, Sep 11, 18 @ 3:19 pm:

    ===About 3 billion of that came from people with an AGI of over $500,000

    If you wanted to get the 10 billion from the folks who made more than $500,000 you need a 15.7% tax rate starting at dollar 1 for those folks.===

    But - OneMan -… they have a plan.

    Ask them.


  9. - ManBoy - Tuesday, Sep 11, 18 @ 3:22 pm:

    Well one thing we can do is differentiate between someone whose income is 500k and 5 million.


  10. - don the legend - Tuesday, Sep 11, 18 @ 3:23 pm:

    If by some miracle the 5 billion additional from the state were offset by 5 billion in reduced property taxes then the needed revenue is back 5.7 billion.

    “Do you believe in miracles?” Al Michaels asks.


  11. - Keyrock - Tuesday, Sep 11, 18 @ 3:31 pm:

    JB is big. Bigger than Bruce. And JB’s magic beans are big.

    ( But he’s right that we need a progressive income tax and more state funding for schools.)


  12. - City Zen - Tuesday, Sep 11, 18 @ 3:59 pm:

    “Local property taxes fund about $18 billion in school spending out of about $29 billion in total.”

    You’ve got poor school districts like Maywood that get 20% of their funding from property taxes. Then you’ve got wealthy districts like Maywood’s neighbor, River Forest, that get 90% of their funding from property taxes but who residents will get slammed by any new progressive (higher) income tax plan. Both villages need property tax reductions. Who gets first dibs?

    Is JB going to admit the “wealthy” districts come first? How will that go over the poorer villages where their property taxes are not as high but, as a percentage of their property value, might be higher?

    This whole 50/50 split is not as easy as JB thinks it is.


  13. - wondering - Tuesday, Sep 11, 18 @ 4:11 pm:

    The constitution dictates primary responsibility to the state. 50/50 is not primary. The gutless ISC should have set this straight back when Madigan first started the shift.


  14. - #1 anon - Tuesday, Sep 11, 18 @ 4:12 pm:

    OneMan - It may need to be a higher rate than 16% (or dip to incomes below $500,000) to address both exceptions (e.g. to protect small business owners or family farms, etc) and individual behavior that alters revenue (by deferring income or relocating assets).


  15. - #1 anon - Tuesday, Sep 11, 18 @ 4:13 pm:

    Rauner has his ad. Just have someone (IPI) figure out the tax rate necessary to raise $10.7 billion a year and run that new rate.


  16. - Anonymous - Tuesday, Sep 11, 18 @ 4:27 pm:

    Well one thing we can do is differentiate between someone whose income is 500k and 5 million.

    And what, tax them even higher? About 1% of Illinois taxpayers are in the $500,000 and up return group you have to get to the .01% to get to the roughly $7,000,000 group. If you looking at an extra 700,000 in state income tax, you are going to be motivated to do things to try and mitigate your taxes (like taking the toilets out), You would be foolish not to.

    So imagine telling Madigan he is going to have to pay an extra 150,000 in state income taxes (since he has said he makes north of $1,000,000 doing property tax law, think he is going to be cool with that).

    You still have to amend the state constitution to do any of this.


  17. - OneMan - Tuesday, Sep 11, 18 @ 4:27 pm:

    4:27 was me…


  18. - Arthur Andersen - Tuesday, Sep 11, 18 @ 4:44 pm:

    Isn’t it generally true that the higher one’s income, the greater one’s mobility? What is going to keep the wealthy here with that kind of a tax rate? The climate? Beautiful vistas?


  19. - sharkette - Tuesday, Sep 11, 18 @ 4:46 pm:

    There has to be a Constitutional Amendment to change the taxes, so,, Madigan does call it out of Committee to change aka increase the average family of 4 making 75k a year which IS most of the State of Illness’s population,,, yet.. at the same time.. he avoids calling a Constitutional amendment to reform future pension costs which is what the property taxes pay according to my tax bill. along with over priced secretaries at schools in my area..
    Constitutional Amendment is what is required to change the tax law and or to reduce future pension costs..
    Which one you want to bet gets out of committee??


  20. - sharkette - Tuesday, Sep 11, 18 @ 4:52 pm:

    I think it’s about 40k a year to keep people incarcerated. The State of Illness, has over 28 Adult jails. Maybe even 29.
    The cost tho educate a child is about 8k a year.
    Our legislators have a large void between their ears


  21. - RNUG - Tuesday, Sep 11, 18 @ 4:57 pm:

    The legal / involuntary pension changes have already been made back in 2011. Even the IPI admits that.

    Even if you spend the State Constitution, you still have that pesky State and Federal Contract Clause you would have to void.


  22. - RNUG - Tuesday, Sep 11, 18 @ 4:58 pm:

    Amend … Not spend … Darn autocorrect


  23. - Grandson of Man - Tuesday, Sep 11, 18 @ 5:02 pm:

    “Isn’t it generally true that the higher one’s income, the greater one’s mobility? What is going to keep the wealthy here with that kind of a tax rate? The climate? Beautiful vistas?”

    A multiyear study shows the opposite, that millionaires are less likely to move, for one reason because they’re more firmly established where they live. So we need to take the IPI/Rauner crocodile tears with a grain of salt.

    A progressive tax is fairer, and we need that in a state where we have a very few people who make millions/billions, pay relatively little but want to gouge middle class workers. Pritzker needs to do better.


  24. - Anonymous - Tuesday, Sep 11, 18 @ 5:07 pm:

    Sharkette

    Where have you been? Read up on pension dings to employees. It’s called Tier 2.


  25. - Yellow Dog Democrat - Tuesday, Sep 11, 18 @ 5:16 pm:

    JB says “plan,” I say “vision”, call it whatever you want. JB wants to ensure Illinois has a strong infrastructure of roads, bridges, schools, and other vital underpinnings to ensure a stronger, safer, more prosperous future for us all.

    It is not his plan/vision to hold school children and people with disabilities and seniors hostage through the budget process to try to extract some pie-in-the-Sky, extreme right wing agenda.

    And, not to be a Poindexter, while the goal of increasing state funding for schools is laudable and urgent, it is not going to all happen in FY 20. The schools cannot grow fast enough to absorb that much additional revenue, and flooding them with money would lead to a rash of unnecessary and unwise spending. We have to grow school spending at a moderate rate, probably over 5 years.


  26. - Montrose - Tuesday, Sep 11, 18 @ 5:26 pm:

    “And, not to be a Poindexter, while the goal of increasing state funding for schools is laudable and urgent, it is not going to all happen in FY 20. The schools cannot grow fast enough to absorb that much additional revenue, and flooding them with money would lead to a rash of unnecessary and unwise spending. We have to grow school spending at a moderate rate, probably over 5 years.”

    This is the point I have kept thinking about with the $10.7b number. During all the budget deficits over the past few years, the argument has been that this problem is not going to get fixed in one budget cycle. I don’t think Rich is suggesting that, but I do think JBs opponents will happily ignore that fact and act as though JB intends to raise taxes by $10.7b the moment he gets into office.


  27. - Occam - Tuesday, Sep 11, 18 @ 5:41 pm:

    ==The schools cannot grow fast enough to absorb that much additional revenue==

    If only that were true.

    Just look at Waukegan D-60, last year they received an incremental $14 million as a Tier 1 district from the EBF formula and for this year they’ll receive another incremental $10.5 million on top of that. So they’ll have $24.5 million to spend than they did 2 years ago. But, if you look at they’re FY19 budget, they’re spending $227 million this year which represents a $35 million increase from 2 years ago.

    Spending is actually increasing at a faster rate than the State can dump into the district.


  28. - OneMan - Tuesday, Sep 11, 18 @ 6:45 pm:

    Yeah it will get up to that in 4, doesn’t change the math. Again this all assuming you can get the constitutional amendment passed, otherwise everything he is talking about is a fantasy.

    At the end of the day if you think we are going to address our issues by taxing other people I want some of what you are drinking


  29. - MyTwoCents - Tuesday, Sep 11, 18 @ 6:52 pm:

    Any additional school funding would have to be tied to a property tax swap so the schools wouldn’t necessarily be receiving a massive influx of additional spending. The overall education spending shouldn’t dramatic all increase, just shift where it’s coming from.


  30. - City Zen - Tuesday, Sep 11, 18 @ 7:21 pm:

    ==property tax swap==

    Can’t happen unless the state starts taxing retirement income. You can’t swap when you have nothing to offer.


  31. - Ducky LaMoore - Tuesday, Sep 11, 18 @ 8:14 pm:

    My advice is simple… if you are going to be vague on taxes, you sure as heck better be vague on spending.


  32. - Three Dimensional Checkers - Tuesday, Sep 11, 18 @ 9:31 pm:

    Sticking to a vision now prevents JB from any political pain from alienating an interest group or constituency that an actual plan might bring. He gets to be everything to everyone.

    If he really is serious about changing school funding like the guesstimate says, which I think would be good for the state, I am not sure having a detailed plan would best advance that goal. There might be compromises and side deals that would have to be made to make a progressive income tax possible. A hard and fast plan might foreclosure a compromise that he may need later.


  33. - Three Dimensional Checkers - Tuesday, Sep 11, 18 @ 11:25 pm:

    I think OneMan’s math is a little off because the tax rate in that report is the old 3.75%. But actually doing a little back of the envelope math, if everyone making over $100k had an effective rate of 7.5%, the state would collect around $17 billion from that group as opposed to the around $8 billion in the report. The key is there is around $227 billion of net income earned from people making over $100k a year. You could play with the highest income levels to get around that effective rate, i.e. over a million is taxed high than 7.5%. Or maybe lower the guesstimate and lower the tax rate. There is a lot of income from high earners though.


  34. - the old man - Wednesday, Sep 12, 18 @ 6:53 am:

    JB is going to work with the legislature on deciding which tax and how much to raise taxes. Does he realize that his 10 plus billion will rise when each aye voting legislator on the tax increase gets to add his district”s special projects “to get that legislator’s vote. That is how it is done in Springfield


TrackBack URI

Sorry, comments for this post are now closed.


* *** UPDATED x1 - All-clear given *** Statehouse evacuated
* Question of the day
* Mendoza react
* One last Jason Helland story
* "On Tuesday night" doesn't mean anything at all
* State loophole allows property tax avoidance
* Well, here's one way of getting an Oscar pic on the blog
* Direct Energy Proudly Supports Ann & Robert H. Lurie Children’s Hospital of Chicago
* The very real consequences of "hollowing out" state government
* Madigan says he's on board with legalizing pot, graduated income tax
* Skeptical lawmakers confront Lincoln foundation
* Mendoza launches mayoral campaign via video
* Don’t believe rental car companies distortions and half truths
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* *** LIVE COVERAGE ***
* Yesterday's stories

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............
<


Loading


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
November 2018
October 2018
September 2018
August 2018
July 2018
June 2018
May 2018
April 2018
March 2018
February 2018
January 2018
December 2017
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress




Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller