Highly unlikely
Friday, Sep 15, 2023 - Posted by Rich Miller
* Background is here if you need it. David Greising has another pension idea…
Both the CTBA and the Civic Committee have stressed the efficacy of front-loading pension payments, but with the administration opposed to a tax increase levied on low- and middle-income people, the Civic Committee may need to find a different idea.
Might there be a way, say, to add a new pension tax, levied only on individuals and companies earning above a certain amount? Even in a flat-tax state, such a plan might pass constitutional review.
* From the Illinois Constitution…
SECTION 3. LIMITATIONS ON INCOME TAXATION
(a) A tax on or measured by income shall be at a non-graduated rate. At any one time there may be no more than one such tax imposed by the State for State purposes on individuals and one such tax so imposed on corporations.
It seems pretty clear you can’t add a new, second tax on top of an existing tax for only a relative handful of people and companies because that would likely violate the “no more than one such tax” sentence of that paragraph. That’s basically why the second sentence was included.
* From the same column…
Even [Andy Manar, deputy governor for budget and economy] didn’t completely slam the door on the Civic Committee plan. “The governor is open to ideas,” he said. It would help if the group can build political support for its plan, he added.
Manar didn’t get specific, but the administration has made clear to supporters of pension reform that this plan, with its call for a tax hike, will not move forward without at least some Republican support. Pritzker and fellow Democrats in the General Assembly will not raise taxes in an election year unless Republicans join the effort.
And if that happens, a source close to Pritzker told me, the governor could well sign on to the Civic Committee’s plan.
Please name the Republicans who will vote for a likely unconstitutional special income tax surcharge (or a service tax) focused solely on upper-income people and big corporations to fund government pensions.
Not to mention that years of anti-pension hype from the Better Government Association and their ilk helped bake that cake.
60-30-1.
- Big Dipper - Friday, Sep 15, 23 @ 12:48 pm:
Greising needs to do better or go away.
- The Phone Ranger - Friday, Sep 15, 23 @ 12:50 pm:
I just read an article Judge Anderson (Will County) wrote a few years ago talking about this. He seemed to suggest that a tax on pensions would be an impairment. What’s to stop the state from taxing pensions at 100%? At what percentage does it go from a legal tax to an impairment?
- Oswego Willy - Friday, Sep 15, 23 @ 12:51 pm:
Greising is wasting everyone’s time.
- Rich Miller - Friday, Sep 15, 23 @ 12:52 pm:
===What’s to stop the state from taxing pensions at 100%?===
See above referenced constitutional language about only one income tax.
- Arsenal - Friday, Sep 15, 23 @ 12:53 pm:
Manar saying “we’re open to it if Republicans get on board with a tax hike” is just a long way of saying “we’re not open to it.”
- JS Mill - Friday, Sep 15, 23 @ 12:59 pm:
=What’s to stop the state from taxing pensions at 100%?=
Shhh…honey, the adults are speaking.
- Who else - Friday, Sep 15, 23 @ 1:03 pm:
The problem with Greising reporting a conversation he had with Andy Manar is that Greising has an agenda that he’d very much like to be validated by someone relevant. Knowing the basics about the positioning of the parties involved here, I find it very difficult to imagine I would have left that conversation thinking I’d gotten the message that there’s a universe where “the governor could well sign on to the Civic Committee’s plan.” But I work in the real world and Mr. Greising works for the BGA, so that explains that.
- Donnie Elgin - Friday, Sep 15, 23 @ 1:21 pm:
Manar didn’t get specific, but…will not move forward without at least some Republican support”
There is a time and place for using a supermajority.
- TheInvisibleMan - Friday, Sep 15, 23 @ 1:28 pm:
This could be an unspoken demonstration of the lessons learned from the graduated tax failure.
This time around lay the groundwork for why it would work first, not leave it as an afterthought.
Then when it comes time to implement, the groundwork is already laid and a new proposal for a graduated tax can be put forth with an obviously different press package and name, but with the same eventual outcome.
Or maybe not. whatevs.
- Cool Papa Bell - Friday, Sep 15, 23 @ 1:35 pm:
=What’s to stop the state from taxing pensions at 100%?=
Or just retirement income? That went over well.
- Do Better - Friday, Sep 15, 23 @ 1:35 pm:
Dems will have north of 80 seats in the IL House after the next election. More if Trump is at the top of the GOP ticket.
Calling out for GOP help with anything is laughable.
- Candy Dogood - Friday, Sep 15, 23 @ 1:38 pm:
===See above referenced constitutional language about only one income tax.===
Giving the commenter the benefit of the doubt perhaps they just mean taxing 100% of retirement income in the state instead of what they actually wrote.
Regardless of the merit of the policy, that’s an excellent way to make sure that the GOP stops being in the super minority.
- Rich Miller - Friday, Sep 15, 23 @ 1:39 pm:
===Calling out for GOP help with anything is laughable. ===
Perhaps, but Greising bought it, so whatevs. lol
- Oswego Willy - Friday, Sep 15, 23 @ 1:40 pm:
===Calling out for GOP help with anything is laughable===
The politics of a silly ask by putting the GOP on the thought to it is good politics to an unhelpful idea being pushed.
- 47th Ward - Friday, Sep 15, 23 @ 1:46 pm:
My take on getting GOP support, in this context, is it raises the question of why the Civic Committee’s support doesn’t automatically translate to any HGOP or SGOP votes. Why is that? Is that a failure of Manar and Pritzker, or a failure of the Civic Committee?
I wouldn’t expect GOP votes for this because Pritzker wants to see it happen. I do expect the Civic Committee to be able to secure at least a few votes for this. Historically, the Civic Committee was the fundraising arm of the ILGOP. In many ways, and on certain things, they still are.
Yet all the lights on that side are red. That’s on the Civic Committee in my view.
- Rich Miller - Friday, Sep 15, 23 @ 1:50 pm:
=== Historically, the Civic Committee was the fundraising arm ===
Those days are over.
- The Speakers Bureau - Friday, Sep 15, 23 @ 1:50 pm:
-Even in a flat-tax state, such a plan might pass constitutional review.-
Greising should know that a flat tax means a flat tax. Now, if you want a progressive income like most Blue states have, go do it. It’s rather shocking Illinois doesn’t have a progressive income tax by now with who gets elected to office.
- Oswego Willy - Friday, Sep 15, 23 @ 1:56 pm:
===It’s rather shocking Illinois doesn’t have a progressive income tax by now with who gets elected to office.===
You are either
1) not from Illinois
2) feigning ignorance to recent history
You can pick.
- Donnie Elgin - Friday, Sep 15, 23 @ 2:04 pm:
“Greising should know that a flat tax means a flat tax. Now, if you want a progressive income like most Blue states have, go do it.”
Il dems with their huge and growing supermajority could quickly pass a “synthetic” graduated/progressive income tax. Pass legislation raising the “flat” income tax to 6,7…8% and then carve out an EIC credits for lower wage earns.
- Annonin' - Friday, Sep 15, 23 @ 2:12 pm:
We seem to recall Speaker Madigan tried to create a billionaire/millionaire tax before JB’s gambit. We don’t think it even got out of the GA. Guessing Herb & Ethel dont give a hoot about pensions earned by the government class. We think Greising also wanted to fund pensions at 100% which is pure folly.
- 19th Ward Mary Ann - Friday, Sep 15, 23 @ 2:21 pm:
If New York , California, Wisconsin, and New Jersey can have a progressive income tax Illinois should be able to pull it off. The heroic teachers unions are been leading the way here in Illinois on this issue. Saying it can’t be done is bogus. I paid into the fund and I expect my check on time.
- Oswego Willy - Friday, Sep 15, 23 @ 2:23 pm:
===Saying it can’t be done is bogus.===
Narrator: it’s not bogus, it didn’t happen.
- Rich Miller - Friday, Sep 15, 23 @ 2:31 pm:
===for lower wage earns===
Now figure out how to also do that for middle-income earners and maybe you might have a shot.
Narrator: The constitution prohibits it and voters soundly rejected a graduated income tax.
- Rich Miller - Friday, Sep 15, 23 @ 2:33 pm:
===If New York , California, Wisconsin, and New Jersey can have a progressive income tax Illinois should be able to pull it off.===
How did you vote on the constitutional amendment and what did you do to convince your friends, family and neighbors to vote for it?
The reality is that voters rejected a graduated income tax. They don’t want it. Move along.
- Lupa of the 35th Ward - Friday, Sep 15, 23 @ 2:38 pm:
I am a CPS teacher in Carlos Ramirez-Rosa’s ward. I am a democratic socialist like many CPS teachers. I don’t need to hear that Illinois can’t have a progressive income tax. We vote. Check out our representation in Chicago City Council (there’s more of us than Republicans). We also have big influence in the Illinois state legislature.
- Rich Miller - Friday, Sep 15, 23 @ 2:41 pm:
===I don’t need to hear that Illinois can’t have a progressive income tax===
lol
Apparently, you do. We can’t have one until we change the constitution. The last attempt failed miserably.
- JoanP - Friday, Sep 15, 23 @ 2:43 pm:
= We vote. =
Not enough of you voted when the progressive income tax was on the ballot.
- Rich Miller - Friday, Sep 15, 23 @ 2:45 pm:
What JoanP said.
- Oswego Willy - Friday, Sep 15, 23 @ 2:46 pm:
===I am a democratic socialist like many CPS teachers===
Speak for yourself, if that’s how you identify then do so. Your fellow teachers will speak for themselves.
It’s as though you want a narrative about a group you may not be a part of at all?
- Rich Miller - Friday, Sep 15, 23 @ 2:47 pm:
I just realized that “Lupa” is using an IP blocker to post, so we have no way of knowing if “Lupa” is an actual socialist. My guess is it’s a gag.
I gotta find a way to block those people.
- Big Dipper - Friday, Sep 15, 23 @ 2:54 pm:
Greising: “Increases of 3% in retirement checks under Illinois pension plans at times have lagged inflation in recent years.” Yet he still calls the increases generous or excessive at every opportunity. Does he not realize (or care) that with inflation and no/small increases retirees would lose buying power every year?
- From DaZoo - Friday, Sep 15, 23 @ 3:41 pm:
====…what did you do to convince your friends, family and neighbors to vote for it?====
That was one of the most frustrating things about the last vote, poor messaging. In a couple different circles of people I interact with, they had no clue that an increased property tax credit was included in the income tax rate proposed legislation.
====Now figure out how to also do that for middle-income earners and maybe you might have a shot.====
They have income caps for certain deductions/credits, like property tax and education expenses. Maybe they can come up with another deduction or credit with similar/same income cap?
- Rich Miller - Friday, Sep 15, 23 @ 3:51 pm:
===Maybe they can come up with another deduction or credit with similar/same income cap? ===
We have a notoriously low exemption amount here because of that constitutional provision.
- DuPage - Friday, Sep 15, 23 @ 3:58 pm:
Maybe the state could put a “voluntary donation” on the Illinois income tax forms to a fund to help pay for the food, shelter, and medical expenses for the migrant community. These expenses need to be covered, but NOT by shorting the state pension funds again.
- City Zen - Friday, Sep 15, 23 @ 4:04 pm:
==The heroic teachers unions are been leading the way here in Illinois on this issue.==
The coalition behind the Fair Tax was unprecedented. It still failed.
==they had no clue that an increased property tax credit was included in the income tax rate proposed legislation==
You don’t need a constitutional amendment to increase the property tax credit.
- Oswego Willy - Friday, Sep 15, 23 @ 4:06 pm:
===You don’t need===
What do you need?
Be specific.
- City Zen - Friday, Sep 15, 23 @ 4:11 pm:
==We have a notoriously low exemption amount here because of that constitutional provision.==
Not sure the flat tax impacts that because anyone earning over $250K can’t claim the exemption. It’s low mostly because it wasn’t indexed to inflation when it was first introduced. Otherwise, it would be $7,500 today.
- Sue - Friday, Sep 15, 23 @ 4:20 pm:
Pension reform is a fools errand. The constitution locks out all of BGA’s past and present recommendations. Why not focus on how to enhance investment performance. The one area no one ever focuses on but where the State might be able to do something. Pritzger can and should impanel a group of top notch professionals chaired by his buddy from Grovenor. Include some Union folks and someone like Larry Fink from Blackrock. Every dollar of return is one less dollar the State needs to contribute. Say what you want about achieving target returns of 7 percent ( which the funds recently have missed) but overall the returns being reported by the 5 State plans really have been ANEMIC