Question of the day
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* Marni Pyke at the Daily Herald…
Republican Sen. Dan McConchie of Hawthorn Woods said, “there is nothing in this [Pritzker graduated income tax] proposal that would protect taxpayers, especially middle-class families, from future tax increases after the new structure goes into effect.”
There are no such guarantees in the current tax law, but I digress.
* The Question: What constitutional provisions, if any, would you support to “protect” middle-class families from future tax increases after the new graduated tax structure takes effect? Make sure to explain your answer, please. Thanks.
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* David J. Roberts, an associate professor of accountancy at DePaul University, writes in the Tribune that the governor’s graduated income tax proposal is “severely flawed and would have serious negative consequences.” How? Well, the “millionaire’s tax” for starters…
Think of this as a progressive rate structure with a cliff. At the million-dollar threshold, one extra dollar of income puts you over the cliff. Ignoring the effects of any other tax provisions, that one dollar of income would cost $8,565 in additional tax, an incredible marginal rate of 856,500 percent on that dollar. Imagine the efforts that taxpayers would go through to avoid being taxed on extra income if they were close to that threshold. And a tax like this might cause some wealthy individuals to flee Illinois altogether.
“Oh, please, won’t anyone think about the millionaires?!” /s
Loo, somebody obviously didn’t run the numbers. As we’ve already discussed, the tax avoidance window is a mere $9,305…
The cutoff point above which tax avoidance wouldn’t make sense would be $1,009,305. State taxes would be $80,239.75 for an after-tax income of $929,065.25 - exactly what you would’ve paid if you made a million dollars.
Increase that income by just a dollar, to $1,009,306, and your state tax would be $80,239.83, with an after-tax income of $929,066.17 - 92 cents more than you’d have made with a million dollars in earnings. After that, the gravy gets thicker.
* Back to Associate Professor Roberts…
Under the proposal, the same rates apply to both single and joint filers. So, for example, two single individuals who each have $250,000 of net income would each pay at a rate of 4.95 percent on income above $100,000. If they marry one another, their combined $500,000 of net income means that the second $250,000 would be taxed at 7.75 percent. Ignoring the effects of any other tax provisions, this results in $7,065 of extra tax, a giant marriage penalty.
* I asked the Pritzker administration the other day about this “marriage penalty” issue…
Current Illinois tax code does not distinguish between married and single filers.
There’s little to no evidence to support the claim that people base their decision to marry on tax rates.
More married couples - especially low-income married couples - receive marriage bonuses at the federal level because of the structure of the federal tax code.
The wealthy - not low-income working families - are more likely to benefit from a higher income threshold for married filers.
Doesn’t sound like the governor is much interested in this particular topic to me.
* Roberts again…
If the plan would double the size of the rate brackets on a joint return, that would eliminate the marriage penalty, but it would result in much less tax revenue. And it would create big potential marriage bonuses. A single person with high income might marry someone with little or no income, and that couple could benefit from lower brackets.
Um, what? A bunch of rich people are gonna suddenly rush out and marry poor people so they can lower their state income tax bills? That’s… not how real life generally works.
A good rule of thumb is that if you have to stretch reality that much to make a point, you should probably avoid making the point.
Instead, perhaps the Republicans could simply demand during negotiations that married couples be allowed to file separate state tax returns or new married filing jointly rates are devised. That is, if they don’t walk away from the talks.
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It’s just a bill
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* Four Senate Republicans voted in favor…
Illinois lawmakers have resurrected and are moving ahead with legislation that would make creating local right-to-work zones at the municipal level a criminal offense.
While reporters in the Capitol building were peppering Gov. J.B. Pritzker with questions about his newly-unveiled progressive tax rates, state Senators voted to send a measure to the House that would make it illegal for local governments to create right-to-work zones in their jurisdictions. Such zones allow employees to refuse union membership and still be employed.
Sponsor Ram Villivalam, D-Chicago, said the bill will support economic development, protect the quality of essential services and confirm a commitment to a highly-trained workforce. […]
The bill, which is similar to one Gov. Bruce Rauner vetoed in 2017, says any local official who supports a [private employer] right-to-work zone will be charged with a Class A misdemeanor. That carries a sentence of up to a year in jail and a fine of up to $5,000.
The roll call is here.
* Interesting roll call here…
…Adding… As you might imagine, the Illinois Family Institute isn’t happy…
This afternoon, the Illinois House of Representatives voted 60-42 to pass HB 246, which would mandate that all students in K-12 public schools be taught about the “roles and contributions” of homosexuals and opposite-sex impersonators and that textbooks purchased include discussions of the roles and contributions of homosexuals and opposite-sex impersonators.
Oy.
* Fracking is back in the news…
Republican state lawmakers from southern Illinois pushed back Tuesday against a bill that would require more public disclosure from oil and gas drilling companies whenever they use hydraulic fracturing, or “fracking” in their operations in the state. […]
Rep. Chris Miller, a Republican from Oakland, in eastern Illinois, argued that the bill, like its earlier predecessor, was intended only to turn public opinion against the oil and gas industry.
“It was bad then. This is bad now,” Miller said. “I personally have signed an oil lease and I know a lot of the things you said were just fear-mongering, trying to create fear and animosity.”
Rau and Gabel, however, said the bill would not impose new requirements on oil and gas producers. They said producers would continue providing state regulators with the same information they provide now. The only difference would be that the information would be made publicly available.
* Other stuff…
* Memo to self: Next time, pick up the phone: While scrolling through my Twitter feed, I saw the column had indeed been read outside the NewsTribune circulation area: “Meanwhile, a columnist who apparently can’t pick up a phone and doesn’t come to Springfield says he somehow has a ‘sense’ for why the legalization bill hasn’t yet been introduced…” Uh-oh.
* Should Young Adults Be Sent To Juvenile Courts?: State Sen. Laura Fine, a Democrat from Glenview, is sponsoring the legislation. She said more than a third of emerging adults in Cook County Jail were charged with misdemeanors. “Many of them get stuck in the jail because they’re either homeless or don’t have a job and they can’t pay their bail,” Fine said. “They’re at an age where, if they did have those proper services, they could be put on another direction in their lives.”
* Deadly suburban kennel fire prompts legislators to call for new safety regulations, but some kennel owners are wary: Following a devastating suburban kennel fire earlier this year that claimed the lives of 31 dogs, two state legislators have introduced bills aimed at making such facilities safer. One bill would require kennel operators to install fire alarms that automatically notify emergency responders; the other would require kennels to install sprinklers or some other fire suppression system.
* LGBTQ advocates ‘deeply disturbed’ by bill that would punish doctors for certain procedures: Asked whether it was necessary to make the medical procedures illegal, rather than promoting outreach efforts and ensuring accurate information available, [Rep. Tom Morrison, R-Palatine] said, “I need to give that more thought.”
* Unpacking Pritzker’s Tax Proposals: Bag Tax
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The hollowing out of state government
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* Press release…
Children’s Home & Aid works every day to help children and families to thrive. Our deep commitment to their success is fueled by an equally strong commitment to delivering services in a sustainable way. We tackle challenges and do our best to meet the needs in light of the community dynamic, resources, etc. However, there are times when we face hard decisions that call for downsizing or in some situations, program exits. This is just such a time.
Effective immediately, we have started the process of phasing out foster care and intact family services in the Central Region.
The current child welfare environment in the Central Region has posed increasingly difficult challenges and it is clear that our foster care and intact family services are not sustainable for us in Bloomington, Champaign and the surrounding communities.
This difficult decision will impact 19 staff members. We have asked Central region child welfare staff to stay with us to help ensure the smoothest possible transitioning of 170 foster care cases and 11 intact families to other community-based providers. We anticipate completing this process by the end of May.
* Pantagraph…
Children’s Home & Aid has started the process of working with DCFS to transition the families to another agency, [Jassen Strokosch, the agency’s director of communications] said. […]
The two programs are funded by the state but there has been no rate reimbursement increase in two decades, Strokosch said. Children’s Home & Aid has been covering the difference.
“In the last three years, we have averaged losing $150,000 a year on foster care and intact family services,” he said. “We’re losing too much money providing the services … That’s not sustainable.”
In addition, the low reimbursement makes it difficult to attract and retain quality staff, he said.
* Illinois Collaboration on Youth…
When providers are unable to pay enough in wages and benefits to attract and retain a qualified workforce, it is ultimately the children, youth, and families who suffer.
Not only does high workforce turnover divert resources away from service provision toward recruitment and training, it negatively impacts the very people who are supposed to benefit from this work. For example, everyone agrees that children and youth are best raised in permanent, safe, and loving homes, however, high worker turnover is strongly correlated to increased lengths of stay in the child welfare system. This constant changing of caseworkers and supervisors is an impediment to achieving that goal, whether it is to return children to their biological families, develop formal guardianship with extended kin, or find new adoptive homes for them.
From a child’s point of view, a change in caseworker is yet another time when an adult who is supposed to care for them has let them down.
Illinois was once a national leader in child welfare, but today, we rank last in the nation on important measures of child safety and permanency. For too long we have asked providers to do the impossible with shockingly insufficient funding. We cannot continue to ignore their warnings. The child welfare workforce does difficult and demanding work. They deserve to be fairly compensated for it, and to receive adequate supervision and training so they can do their jobs well.
Providers need an emergency rate increase to stop the bleeding. We are seeking approximately $37 million with HB2524/SB1730 to help address the historic underfunding and begin to turn this system around.
But, yeah, let’s do across-the-board state budget cuts. Right.
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* Kyle Thomas at the Illinois State Board of Elections…
As reported orally at prior Board meetings, earlier this year, an effort was made to identify individuals who potentially cast more than one ballot in the General Election of 2016. Utilizing the Statewide voter registration database (IVRS), duplicate registration records were identified where more than one record for that individual had been marked as voted. The results of this effort were forwarded to the election authorities for investigation.
The majority of the records identified were found to have been mistakes made by jurisdiction staff whereby they (some dating back as far as the inception of IVRS), accepted duplicate registration matches for records that were, in fact, for separate individuals. This accounted for 765 of the 1,379 total records identified (each record reflects one voter registration record not one voter). We asked the election authorities to provide us the information on those cases and State Board staff took the steps necessary to unlink the records within the IVRS database. The next largest portion of records, found through the investigations by the election authorities, were record keeping errors at the time of voting. In many of those cases, a voter signed the wrong person’s ballot application (for instance a son may have signed a father’s application mistakenly). This accounted for 357 of the records.
However, the election authorities did report that of the 1,379 total records, 257 registration records appear to be double voting, which involves approximately 130 individual voters. Thus far, 65 of the records have been forwarded on to the appropriate law enforcement authority for further action and the remainder are still under review by the election authority or their internal counsel.
Click here for the accompanying spreadsheet. Lots more info in there. Of the 65 records forwarded so far to law enforcement, 18 were in Champaign County, 8 were in suburban Cook and 7 were in Chicago.
Over 5.5 million people voted in 2016, so this represents a miniscule 0.001 percent (one thousandth of one percent). But races can be super close (the Macon County sheriff’s race is still not decided), so vigilance is necessary. Kudos to the Board for taking a look at this.
Rep. Allen Skillicorn (R-East Dundee) says he filed a Freedom of Information Act request to get the names of the alleged multiple-voters, but was denied.
* The Board’s spokesperson explains the law enforcement referrals…
We compiled that spreadsheet based on our contact with the local authorities, but the local authorities did the investigations and referrals to law enforcement where their legal counsel determined it was warranted. We don’t have legal authority to prosecute – that rests with the state’s attorneys in the jurisdiction in which the alleged offense was committed. We also are prohibited from giving legal advice to local election authorities, so our action here was limited to making the initial referrals to the locals.
* Illinois News Network…
There were seven possible double vote records identified in Sangamon County, but they were found to not be the same person and none were reported to law enforcement.
Sangamon County Clerk Don Gray said he understands the concern.
“We would never tolerate a double vote here in Sangamon County, no county clerk would throughout the entire state of Illinois,” Gray said. “We go through great lengths to ensure that the protocols at the moment of issuing a ballot are followed” […]
[Rep. Allen Skillicorn, R-East Dundee] used the numbers to promote a measure to stiffen penalties for double voting. He also said he wants to get Illinois back into the Interstate Voter Registration Crosscheck system meant to help find voter registration irregularities. Illinois recently pulled out of the multistate Crosscheck program.
Gray said getting back in is not necessary. He said the Electronic Registration Information Center, or ERIC, Illinois and all neighboring states but Indiana are a part of is superior.
Dietrich said the state board is “hopeful that we can create a data-sharing agreement with Indiana for voter list maintenance efforts in both states.”
Crosscheck is worthless and even harmful. The state shouldn’t get back into it.
* Related…
* State Rep. Skillicorn considering 2020 congressional bid
* Rauschenberger says Skillicorn is ‘right fighter for the 14th’ District
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Illinois Small Biz Ranking Tanks Under Pritzker Rates
Wednesday, Mar 13, 2019 - Posted by Advertising Department
[The following is a paid advertisement.]
Small businesses create two-thirds of the new jobs in Illinois. And more than 270,000 Illinoisans are looking for work. But a new report shows just how much Gov. J.B. Pritzker’s tax proposal would harm the state’s most important economic engine.
The nonpartisan Tax Foundation projects Illinois’ business tax climate ranking would plummet to 48th in the nation – and the worst in the region – under Pritzker’s “fair tax” rates. Only California and New Jersey would rank worse.
This massive hit for small businesses is one of the reasons Pritzker’s rates would cost the state at least 30,000 jobs. And it’s no wonder family-owned businesses like Piasa Motor Fuels near Alton, Illinois, would look for relief across state lines. State lawmakers representing districts with strong small business communities should be wary of following the governor’s lead.
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Oppo dump!
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* Hmm…
The leader of alternative teacher preparation program known as Teach for America drew sharp criticism from one Democratic state lawmaker Tuesday as he appeared before a House committee seeking continued funding from the state of Illinois. […]
[Aneesh Sohoni, executive director of the Teach for America program in Illinois] said the program recruits young college graduates, particularly students of color, who have degrees in fields other than education, and puts them through an intensive seven-week training program to prepare them for teaching in a classroom. He said it also continues to provide coaching and support for the first two years of that new teacher’s career.
But that is a significantly shorter training period than most teachers receive through traditional programs, which usually require five years of study and student teaching to earn a bachelor’s degree, or at least three semesters to earn an education degree on top of some other bachelor’s degree. […]
State Rep. Katie Stuart, an Edwardsville Democrat and a former math teacher, said she could not believe that Teach for America can provide the same level of professional training as a formal training program at a college or university. She said programs like Teach for America diminish the professionalism of the teaching occupation.
“Part of the reason why we don’t have our young folks going into our colleges and universities saying, ‘You know what, I really want to be a teacher because my teachers really made a difference in my life and I want to be able to do that for others,’ is because we don’t respect the profession,” Stuart said. “And I think many times, organizations like yours take away from what we view as the professionalism of teachers. It disrespects the degree that our education professionals are earning, and it kind of belittles the research that goes behind all of that.”
OK, but if you click here you’ll see a copy of Rep. Stuart’s 1998 resume, which was obtained via FOIA request.
Notice that Stuart earned a BA in Mathematics in May of 1991 and then from August of 1991 through May of 1993 she headed the middle school math program and taught several other classes at St. Paul Lutheran School in New Orleans. She did not earn her teacher certification in Math until May of 1993 - after she’d been teaching and running a math program for two years.
Also, if you click here and here you’ll see two job-seeking letters Stuart sent in 1998 to Edwardsville’s Assistant Superintendent of Personnel and the principal of Edwardsville High School dropping the name of her late father-in-law, who had retired as the district’s superintendent two years earlier.
Now, there’s absolutely nothing wrong with any of that. But it might possibly undercut her otherwise strong argument for teacher professionalism.
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Site Selection ranks Chicago metro 1st in nation
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* Site Selection Magazine…
Greater Chicago once again has finished No. 1 in the nation in Site Selection’s annual Top Metros rankings, based on qualified corporate facility investment projects during the previous calendar year. The projects range from the massive distribution cluster in Will County populated by such firms as Diageo and IKEA to the office and manufacturing projects landing in such places as Arlington Heights, Wheeling, Bolingbrook, Elgin, Carol Stream and Naperville from the likes of Faber-Castell, IHerb, G&W Electric and Givaudan Flavors.
But the core of activity is in Cook County, where projects last year came from Facebook, Walgreens, Northrop Grumman and Komatsu, among others. Joining their ranks early this year (with a project to be counted toward the next year-end tally) was Ford Motor Company, which pledged to invest $1 billion and create 500 new jobs at its Chicago Stamping and Assembly plants that will bring total payroll to 5,800. […]
In addition to hosting the second highest concentration of computer science graduates in the U.S. and ranking sixth in the number of STEM workers who live there, Greater Chicago startups lead the nation in venture returns, with an 8.5x multiple on invested capital. Some of that capital has come thanks to the efforts of venture capitalist and billionaire J.B. Pritzker, Penny Pritzker’s brother and the newly elected governor of Illinois.
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Pritzker to opponents: What’s your plan?
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* Tribune…
Pritzker, repeating talking points he used last week when launching his tax proposal, said the plan would help the state address its $3.2 billion budget deficit, $8.4 billion backlog of unpaid bills and $134 billion in unfunded pension liabilities. He presented two alternatives: across-the-board spending cuts or an increase in the current flat tax rate. The governor so far has ruled out extending the sales tax to consumer services or taxing retirement income, moves that would put Illinois more in line with other states but are politically unpopular.
Pritkzer’s plan has been met with unified opposition from Republican lawmakers and large business organizations including the Illinois Chamber of Commerce and the Illinois Manufacturers’ Association. They argue that raising taxes on the wealthy will push residents and businesses out of the state.
Rather than just criticize his plan, Pritzker said, opponents should offer “a specific counter-proposal.” So far, none has been forthcoming.
* It’s a different tax, but still on-topic…
Gov. J.B. Pritzker wants to increase the tax on a pack of cigarettes by 32 cents. That’s expected to raise $55 million in revenue, the administration said.
Illinois Association of Convenience Stores Executive Vice President Bill Fleischli represents thousands of convenience stores around the state. He said Pritzker proposal will make Illinois’ taxes on cigarettes about $2.30 a pack in Illinois. He said that would push Illinois’ taxes on cigarettes to the highest in the region, behind Wisconsin. […]
Instead of increasing taxes, Fleischli said the state should find other ways to shore up the budget.
“Look at anything, look at a reduction in spending,” Fleischli said. “Look at other areas, not just the sins. We ought to go someplace else.”
It’s not really fair to expect Fleischli to propose an alternative revenue or spending plan. That’s not what he does. But it is a useful rhetorical device to make the opposition sputter.
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Tobacco 21 roundup
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* I know we discussed this yesterday, but there’s not a lot of news out there, so let’s take a look at the Tobacco 21 coverage…
The state of Illinois is a big step closer to raising the age to buy cigarettes or other tobacco products. The Illinois House yesterday approved the Tobacco 21 plan. It raises the age to buy cigarettes, dip, or vape products to 21. Supporters say the new law would stop older teens from buying tobacco for younger teens.
Interestingly enough, the Senate read the bill into the record late yesterday and could start hearings as early as this week and might possibly even have a floor vote by Thursday. But, that’s a pretty ambitious schedule and the SDems haven’t caucused on this yet. Either way, it’s now in position for a very fast track.
* Tribune…
A spokeswoman for Democratic Gov. J.B. Pritzker did not directly comment on the bill, which still has to get through the Senate, but said the governor “believes in order to help build a healthy society we have to work to prevent young people from smoking.”
“He looks forward to reviewing the legislation to raise the smoking age, spokeswoman Jordan Abudayyeh said in an email.
While the bill would raise the legal age for purchasing cigarettes and vaping products, it would do away with penalties for underage possession. Retailers still would be fined for selling restricted products to underage customers.
“This is a public health issue, not a criminal issue,” said Democratic state Rep. Camille Lilly of Chicago, the bill’s sponsor.
Lilly did a very good job with this bill. I was told the last soft roll call had 72 votes in support. It received 82, which is 21 more than it received last November.
Lots of parents are freaked out these days about the explosive rise in teenage vaping. That could’ve explained a lot of these flips…
Republican state Rep. Jim Durkin, of Western Springs, said he has fought against the issue for many years. Now, he said, he credits his 17-year-old daughter for helping him change his mind about what she called an issue “out of control”.
“She said you guys need to do something. I said Caroline, I’m doing something, I’m changing my mind.”
* Capitol News Illinois…
The bill leaves in penalties for merchants who sell to minors. Bill Fleischli, executive vice president of the Illinois Petroleum Marketers Association and the state’s Association of Convenience Stores, finds fault with this logic.
Fleischli said merchants then become the policers, because law enforcement would be unable to do anything if an officer saw a minor with a cigarette, for example.
Rep. Tim Butler, R-Springfield, who is a chief co-sponsor of the measure, said he knows “this isn’t a perfect bill.”
“For those who wonder about the decriminalization aspect of it, I’d like you to ask a member of our law enforcement how many kids they actually bust for smoking a cigarette every day,” he said. “It doesn’t actually happen today.”
* Illinois News Network…
Republican Toni McCombie said the law is likely to have unintended consequences.
“We have got to quit chipping away at our personal liberties and our tax bases,” she said.
Estimates on the bill say the state would lose up to $40 million per year in tobacco tax revenue, but Lilly said that estimate isn’t accurate because it assumes everyone would suddenly abide by the law. […]
“Research shows that Tobacco 21 laws can make a tremendous impact on the health of our communities as well as reduce healthcare costs from tobacco-related diseases,” said Kathy Drea from the Lung Association. “This law is proven to protect children, reduce smoking rates, save on healthcare costs and save lives. In fact, Chicago saw a 36 percent decline in the use of tobacco products among teens after passing Tobacco 21 in 2016.”
I’m now wondering where Rep. Toni “Personal Liberties” McCombie will be on the cannabis legalization bill. Just sayin…
* Gatehouse…
Republican Rep. C.D. Davidsmeyer of Jacksonville, speaking against the bill, said his concern on the bill is mainly philosophical. Davidsmeyer’s district borders the Mississippi River, which means businesses would be competing with Missouri, which has a lower cigarette tax.
“I believe if a person is old enough to decide who the most powerful person on the planet, the president of the United States, is, I think they’re responsible enough to look at the package of cigarettes or look at the can of chewing tobacco and see that it says it can kill you,” Davidsmeyer said.
So, if an 18-year-old should be allowed to decide whether to smoke cigarettes or vape nictoine, should a 21-year-old be allowed to decide whether to smoke or vape legal cannabis? Rep. Davidsmeyer will be letting us know soon enough.
* From JUUL Labs CEO Kevin Burns…
We applaud the Illinois House of Representatives for passing legislation to raise the purchasing age for all tobacco products, including vapor products, to 21 and we will continue to work with lawmakers in Illinois to get this policy signed into law.
We cannot fulfill our mission to provide the world’s one billion adult smokers with a true alternative to combustible cigarettes, the number one cause of preventable death in this country, if youth-use continues unabated. Tobacco 21 laws fight one of the largest contributors to this problem – sharing by legal-age peers – and they have been shown to dramatically reduce youth-use rates. That is why we are committed to working with lawmakers to enact these effective policies and hope more jurisdictions follow in Illinois’ example.
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Dold clarifies Tribune’s Sterigenics coverage
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* Bruce Dold, the publisher and editor in chief of the Chicago Tribune, wrote an unusual clarification late yesterday afternoon about the Tribune’s Sterigenics coverage. Excerpt…
Some articles have discussed industry research that shows there are other, potentially safer methods that could replace ethylene oxide across the medical equipment industry. To clarify, some devices are currently approved for use only if they are sterilized with ethylene oxide. Under current FDA approvals, Sterigenics and other companies are required to use ethylene oxide to sterilize those devices.
A story published online Jan. 25 and in print the next day has been updated with the following sentence:
Despite readily available alternatives that industry research shows are potentially effective, Sterigenics and Medline Industries note that ethylene oxide is currently the only FDA-approved option to fumigate certain medical equipment used in surgeries and other medical procedures.
A story published online Oct. 26 and in print the next day discussed pollution control at the plant, stating: “Federal officials say the company released uncontrolled amounts of ethylene oxide from building vents for more than 30 years.”
There’s more, so go read the whole thing.
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Tobacco 21 easily passes House
Tuesday, Mar 12, 2019 - Posted by Rich Miller
* It now moves to the Senate where it’s expected to pass…
The bill is here…
Raises the age for whom tobacco products, electronic cigarettes, and alternative nicotine products may be sold to and possessed by from at least 18 years of age to at least 21 years of age.
* The legislation received only 61 votes last November…
The failure to override the veto was not unexpected. The bill passed the House in May with only 61 votes, and supporters knew it would be difficult to find an additional 10 votes for an override.
Supporters of the legislation said they will try again next year.
“We are going to come back at this issue until we get it done,” said Rep. Camille Lilly, D-Chicago. “We do not, meaning the state of Illinois, think that this is something we should ever stop working towards.”
That 2018 roll call is here.
* Obviously, some folks changed their minds, including this prominent Republican…
* Context…
Currently, seven states and more than 34 municipalities in Illinois have already passed Tobacco 21 laws, according to the American Lung Association.
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Question of the day
Tuesday, Mar 12, 2019 - Posted by Rich Miller
* Tax Foundation…
Within a graduated rate structure, inflation can impose a hidden tax, increasing the taxpayer’s liability as a greater share of their income is taxed even if that income has not increased in real terms, since bracket kick-in thresholds are fixed. To avoid this “bracket creep,” most states with graduated-rate structures index bracket widths and other features of the income tax to inflation. Pritzker’s proposal gives no indication of this, meaning that over time, taxpayers will pay an increasing amount of taxes as a percentage of income—even if their income has not increased in real terms.
* The Question: Should the governor’s proposed graduated income tax brackets be indexed to inflation? Take the poll and then explain your answer in comments, please…
survey solutions
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Teacher shortage worsens
Tuesday, Mar 12, 2019 - Posted by Rich Miller
* Illinois Association of Regional Superintendents of Schools survey results of 527 out of 858 district superintendents…
Superintendents in 85% of the districts surveyed believed that they have either a major or a minor problem with teacher shortages, which is up from 78% from the 2017 survey. Substitute teacher shortages continue to be a particular concern for superintendents. About 5 in 8 (63%) indicated that they have a “serious problem” with substitute teacher shortages, while only 3% indicated that they have “no problems” with substitute teacher shortages. Among the 527 responding districts (61%), superintendents reported that 20% of all positions (1,032) listed for fall 2018 remained unfilled or filled by an unqualified professional. This resulted in 225 classes being cancelled.
* More from the report…
Teacher Shortage Intensity by County
Substitute Teacher Shortage Intensity by County
* Peter Hancock at Capitol News Illinois…
The report said shortages were reported in almost every subject area, with foreign languages, various special education fields and computer science leading the list of classroom subjects. There were also significant shortages of school psychologists and library and media specialists.
Shortages were also reported in every region of the state, although they were more severe in southern and central Illinois than in the suburban districts around Chicago.
In southern Illinois, 94 districts reported seeing “significantly fewer qualified applicants” than they did five years ago. That compares with 90 percent of the districts in central Illinois; 78 percent in northwest Illinois; and only 42 percent in the Cook County and surrounding suburbs.
As a result of those shortages, the report said 99 districts reported canceling a total of 225 course offerings due to a lack of qualified teachers, while 86 districts reported converting more than 200 classes to online learning because they lacked a qualified teacher for the subject.
* Back to the report…
Three key policy recommendations are presented. First, to alleviate the substitute teacher shortage, the process of substitute teacher licensing should be “less bureaucratic” and streamlined, especially for retired educators serving in a district of prior employment. Second, Illinois needs to expand programs for developing new teachers including support for Grow Your Own Teacher and Administrator initiatives throughout all of Illinois. Finally, by using existing data and collecting gap data we will have the ability for more confident predictions on shortages long term and identify, by district, the challenges and viable solutions for educator shortages.
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* Tom Schuba with the Sun-Times…
Empty storefronts and shuttered restaurants line the main drag along Locust Street in Delavan, a sleepy enclave just south of Peoria.
But on the outskirts of town, business is booming — or, rather, blooming. Inside a nondescript warehouse behind a razor wire fence sit thousands of marijuana plants being grown for medical use. […]
Revolution’s 75,000-square foot grow operation cultivates up to 10,000 marijuana plants at any given time and employs 56 people, 10 of whom are natives of either Delavan or the surrounding area. Since the facility opened, the city has created a tax increment financing district to use the company’s property tax dollars to fund infrastructure and redevelopment projects, including the construction of a new public high school.
Scroll down…
To prepare for an expected increase in demand, Revolution is shelling out more than $100 million to build an adjacent facility on a plot of land that’s seven times larger than the current cultivation’s center 10-acre site. The new building will be used to grow recreational weed, while the existing structure will continue to cultivate medical marijuana, de Souza said.
That’s great news for Delavan, but only if this gamble pays off. Some of these growers are assuming that they’ll get licenses when cannabis is legalized. And maybe they will. The CEO of that company did serve on Pritzker’s transition team, after all, and I’m told his grow center is amazing.
* But sudden “massive growth” and a trend toward vertical markets are both worth keeping an eye on…
With Illinois’ marijuana industry gearing up for massive growth as the state considers legalizing the drug for recreational use, a company based in Phoenix is paying $850 million for Chicago-based cannabis operator Verano Holdings.
The deal will give Harvest Health & Recreation the right to operate Verano’s cultivation facility and dispensaries in Illinois, as well as its operations in other states. Verano’s Chicago headquarters is expected to remain an operations hub after the acquisition.
Harvest Health, which owns dispensaries or cultivation facilities in five states and trades on the Canadian Securities Exchange, has been eyeing an entrance into Illinois for a long time, said CEO Steve White. Illinois is an attractive market because it is a heavily populated state and lawmakers are drafting a bill to legalize adult-use marijuana, he said.
“We wanted to make sure we were participating in a meaningful way before those conversations were at a crescendo,” White said. “As that conversation starts moving forward, the price of assets in Illinois goes up.” […]
Its cultivation facility in the southern Illinois city of Albion is undergoing expansion to double grow capacity, said Verano co-founder Sam Dorf. It also has dispensaries in Chicago’s Norwood Park East neighborhood and west suburban St. Charles, and has an ownership stake in a dispensary in Effingham.
I’m all for people making money on this. Illinois definitely needs a shot in the arm. But always be wary of late money jumping into a game. Big money means lots of lobbyists, and that means legislators and the governor will likely have to make extra sure those lobsters don’t try to write their own legislation to benefit their clients and not Illinois.
Also, I’d personally prefer a tiered system like beer has. Producers, distributors and retailers are all kept separate to prevent one or two producers from dominating.
* There are other considerations to stress as well, including areas hard-hit by the drug war…
In crafting legislation, lawmakers are discussing fairness in distributing marijuana tax revenue to ensure communities in need of public service improvements aren’t overlooked. “We are trying to provide some recommendations that we think would help infuse those dollars in a meaningful way back into those communities,” said Chicago Democratic Rep. Sonya Harper, a leader in the legislature’s cannabis equity work group, The Tribune reported.
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More Pritzker graduated tax react
Tuesday, Mar 12, 2019 - Posted by Rich Miller
* ILGOP…
“It’s time to end Governor Pritzker’s tax hypocrisy. Pritzker says he ‘chooses fairness’ when it comes to raising taxes, yet Pritzker is the beneficiary of many overseas holdings that allow him to dodge untold millions in state and federal taxes. If Pritzker truly believes that rich people such as himself have an obligation to pay more in taxes to the State of Illinois, Pritzker should take the first step and domesticate his overseas holdings in Illinois so they would be subject to the higher tax rates he has proposed for the people of Illinois.
“As one of Illinois’ richest residents and leading tax hike proponents, it’s time for Governor Pritzker to pay his fair share, before expecting Illinois taxpayers to pay more. Tax fairness should start with our governor.” - Illinois Republican Party Chairman Tim Schneider
Last week, Governor J.B. Pritzker finally released the specific tax rates of his plan to raise taxes on Illinois families and businesses. When you factor in the Personal Property Replacement Tax, Pritzker’s tax hike plan will hit corporations and trusts domiciled in the state of Illinois with a 10.45% and 9.45% tax rate, respectively, making it “one of the highest in the nation.”
During the course of last year’s gubernatorial campaign, Illinois voters learned that Pritzker is the beneficiary of many overseas trusts based in the Bahamas and Cayman Islands. Those trusts are not subject to taxes. Pritzker attempted to skirt the topic by saying there was nothing he could do about the trusts set up by his grandfather in the 1960s, and that all of his money from those trusts go to his charitable foundation.
But a Chicago Tribune investigated found that Pritzker himself utilizes overseas tax havens for his personal business ventures. Several overseas shell corporations were set up by Pritzker and his associates between 2008 and 2011. According to the Tribune, those corporations “are either wholly owned by J.B. Pritzker, his brother and business partner Anthony Pritzker, or list other close associates as controlling executives.”
All told, the Tribune found “35 offshore and domestic trusts and shell companies tied to Pritzker on top of the dozen offshore investment funds.”
Financial experts told the Tribune that the investment tactics used by Pritzker helped him maintain the secrecy of his overseas holdings while minimizing the tax liability.
When the investigation broke, Pritzker tax hike supporter Dan Biss said “J.B. Pritzker set up companies offshore, probably to avoid taxes and spent the entire past year lying about it.”
In 2008, The New York Times said the Pritzker family were “pioneers in using tax loopholes to shelter their holdings from the internal revenue service.” And J.B. Pritzker’s sister, Penny Pritzker, became the subject of media scrutiny after some of her overseas holdings were revealed in the Paradise Papers.
If Pritzker truly believes that rich people such as himself have an obligation to pay more in taxes to the State of Illinois, Pritzker should take the first step and domesticate his overseas holdings in Illinois so they would be subject to the higher tax rates he has proposed for the people of Illinois.
* Think Big Illinois…
After Governor Pritzker’s proposed fair tax rates showed that 97% of Illinoisans would not see a state income tax increase under a fair tax system, opponents have grown increasingly desperate in their false attacks. While these opponents will do or say anything to avoid forcing the wealthy to finally pay their fair share, it’s important to note the truth is not on their side.
A favorite talking point of these opponents is that the wealthiest Illinoisans will leave the state if they’re forced to pay their share, but the facts tell a different story. Research shows that there is no correlation between a state’s tax rates and the likelihood a high-income family leaves the state. Look no further than California, which increased its top marginal income tax rate to 13.3% in 2012, but continues to have a net migration in of millionaires each year.
Additionally, Illinoisans have fled the state for years as the Rauner administration played politics with the budget, leaving our education system decimated and critical services severely underfunded. A Fair Tax will bring in much-needed revenue to help address these issues, yet it’s Rauner’s brand of mismanagement and irresponsible governance that opponents are eager to return to.
“The legislature will have the same power if the Fair Tax is passed as they do now, and wealthy families will not leave the state at increased rates. These are just desperate false claims from Governor Rauner’s former allies who will do or say anything to keep a system in place that works for the wealthy while hurting working families,” said Quentin Fulks, Executive Director of Think Big Illinois. “The only difference is Illinois would finally have a tax structure where the burden is lifted off the middle class and the wealthiest pay their fair share. That’s why Think Big Illinois is committed to continue fighting for a Fair Tax in our state.”
Discuss.
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Unclear on the concept
Tuesday, Mar 12, 2019 - Posted by Rich Miller
* Gov. Pritzker was asked by reporters today why he doesn’t support expanding the sales tax to cover services. He talked about his general opposition to flat taxes and how, although it may be necessary to increase them in some instances, he prefers progressive taxation.
He also said that some of the folks arguing for an increase in flat taxes are the same people who are advocating for the “3 percent.” You’ll recall that Pritkzer’s proposed graduated income tax would only raise taxes on the top 3 percent of earners, so he’s got a new catch-phrase.
“The bulk of a flat tax increase falls on the middle class and the working class and people that are striving to get to the middle class,” Pritzker said.
* A reporter then chimed in…
I was asking about a tax on services. Is that a flat tax?
“Those are flat taxes. What do you think?” an incredulous Pritzker responded. “Everybody gets taxed at the same rate.”
Maybe the reporter just got confused for a moment. Stuff happens and he’s a bright guy, so whatever. And always remember the old saying about how there are no bad questions, just bad answers.
But what you’re seeing here is how difficult it’s going to be to explain this stuff when even experienced political reporters seem to have trouble following the thread.
…Adding… Come to think of it, a graduated sales tax might not be a bad idea. Slap an extra tax on First Class airfare, or $600+ per night hotel rooms or $70,000 cars or whatever.
…Adding… The raw audio is here.
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Pritzker Comes Up Short
Tuesday, Mar 12, 2019 - Posted by Advertising Department
[The following is a paid advertisement.]
Gov. J.B. Pritzker’s “fair tax” plan hinges on a promise to raise $3.4 billion in new revenue. But a simple, static revenue estimate shows the governor’s proposed rate structure falls nearly $1 billion short of that number – even without taking into account the economic effects of a tax hike. And the governor is refusing to show his math.
Pritzker’s questionable revenue estimate raises a point echoed by Center for Tax and Budget Accountability Executive Director Ralph Martire in the Chicago Tribune – $3.4 billion isn’t enough to fund what Pritzker has proposed in new spending:
“It wouldn’t be enough to do all that,” said Ralph Martire, executive director of the Center for Tax and Budget Accountability, a union-backed bipartisan research group. Martire said the state needs to look for other sources of new revenue, including a possible extension of its sales tax.
In other words, more tax hikes are just around the corner.
It’s important to remember that Illinois policymakers are often motivated to reach certain revenue estimates that support their policy preferences. Pritzker should release the full methodology behind his revenue estimate before asking Illinoisans to trust his numbers on a multibillion-dollar tax hike.
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* Student out-migration has been a problem for decades, but, like with just about everything else, Bruce Rauner inherited a serious problem and made it worse…
The Illinois Board of Higher Education released its annual student out-migration report Tuesday. In 2017, 48.4 percent of students who graduated from a public school in Illinois that enrolled in a four-year college chose one outside of the state. That’s up nearly two percentage points from the fall of 2016.
The breakdown of the numbers shows an increase of more than 2,000 students attending two-year schools, meaning that there was a proportional loss of students to four-year universities even though the 53,000 student enrollment at four-year institutions was similar what it was in 2016.
Of all the graduating students, one in five chose to attend universities in other states.
Eric Lichtenberger, deputy director for information management and research with IBHE, said the two years of the state’s budget impasse, which resulted in limited school and grant funding because lawmakers couldn’t come to terms with freshman Gov. Bruce Rauner on a budget deal showed increases in students going out of state.
“Since the budget impasse, we’ve been experiencing annual increases of at least 3.5 percent, which is somewhat surprising,” he said.
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IDOT takes signage to the next level
Tuesday, Mar 12, 2019 - Posted by Rich Miller
* You may have noticed that IDOT has been putting clever messages on some of its electronic billboards lately…
* But then all of a sudden this billboard appeared all over the place. I saw it twice on Interstate 57 during the weekend…
* I reached out to IDOT and received this reply from Jessie Decker…
Hi, Rich-
We’ve seen a recent increase in social media posts including pictures of our signs taken from the driver’s perspective. We love that people are interested in helping spread the word about safety on our roads. However, taking pictures while driving is obviously dangerous – and it’s also illegal to use a handheld device while driving.
We are finding new ways, sometimes tongue-in-cheek, to bring attention to serious issues. Anything we can do to get people to stop and consider NOT using their phones while behind the wheel is a message we support.
Thanks,
Jessie
* Not everyone is convinced, however…
Thoughts?
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* Wirepoints…
Oh, the places they’ll go: The impact of Pritzker’s progressive tax on wealthy Illinoisans
You have to wonder if Gov. J.B. Pritzker ever saw the top marginal tax rates of other states before he released his new progressive tax plan. If he gets his way, he’ll give wealthy Illinoisans another big reason to leave the state. […]
His new tax hike will be just another huge incentive for the wealthy to take up residence elsewhere. They’ll get a far better deal on their income taxes if they do. […]
Pritzker says Illinois is an outlier because it remains a flat tax state even though 30-plus other states have a progressive tax structure. But with his tax plan, Illinois will become an outlier among progressive tax states for how much it taxes residents with $250,000 incomes and above.
North Dakota, Arizona, New Mexico, Ohio, Alabama, Mississippi, Oklahoma, Kansas, Maryland, Virginia, Missouri, Rhode Island, Georgia, Louisiana, West Virginia, Iowa (by 2023), Delaware, Nebraska, Arkansas, Montana, Connecticut, South Carolina, Maine, Idaho and Wisconsin all have progressive structures with lower tax rates on $250,000-plus incomes compared to Illinois under the Pritzker plan.
Even New Jersey and New York’s rates, which are some of the highest in the nation, would be less painful for residents earning $250,000 to $500,000 ($250,000 to $1 million in New York’s case).
* OK, so I used the Tribune’s new online calculator for Pritzker’s proposed graduated tax (as I mentioned earlier today, the Trib tells you what you will owe, while the governor’s calculator only tells you how much less or more you’d pay) and plugged in an income of $251,000 for a single person with no exemptions and got $12,387 in income taxes owed, not including the increased property tax credit.
Next, I used the SmartAsset.com calculator and plugged in that same $251,000 income for the states listed above (excluding Iowa).
States with significantly lower effective graduated rates…
North Dakota: $5,047
States with somewhat lower effective graduated rates…
Alabama: $9,443
Louisiana: $9,920
Arizona: $9,988
New Mexico: $11,510
Rhode Island: $11,896
Mississippi: $11,985
Oklahoma: $11,994
* The rest…
Illinois: $12,387
Kansas: $13,550
Missouri: $13,582
New Jersey: $13,799
Virginia: $13,949
Connecticut: $14,369
Georgia: $14,432
West Virginia: $15,060
Delaware: $15,335
Ohio: $9,842 (plus $5,499 in local income tax for Cincinnati)
Wisconsin: $15,385
Nebraska: $15,825
Maine: $15,885
Montana: $15,952
Arkansas: $16,253
South Carolina: $16,330
Idaho: $16,402
Maryland: $12,705 (plus $6,374 local income tax for Annapolis)
California: $20,187
New York: $15,536 (plus $9,294 in local income tax for NYC)
As far as flat tax states go, if you live in North Carolina, your tax bill would be $13,321 (higher than Illinois). In Frankfort, Kentucky, your effective income tax would be $12,424 (higher than Illinois) plus another $7,405 in local income taxes. If you live in Detroit, Michigan, you’d pay $10,495 and then another $6,010 in local income taxes. In Utah, your income tax bill would be $12,425 (higher than Illinois). In Massachusetts, it’s $12,577 (higher than Illinois). Indianapolis residents pay $8,075 state income tax and $4,050 local income tax. Philadelphia, PA residents pay $7,706 to the state and $9,849 to Philly. Coloradans pay $11,621 (about $800 less than they’ll pay here if this passes muster).
* Now, you could plug in higher incomes and you might get some different results, but I didn’t set the parameters of this “debate,” they did. Also, I’m done crunching numbers for a bit.
Point being, nobody who bases any sort of intelligent decision on whether to move is gonna look at marginal tax rates. And, frankly, most people don’t move based on this topic in the first place. Click here for just one example.
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The Credit Union Difference
Tuesday, Mar 12, 2019 - Posted by Advertising Department
[The following is a paid advertisement.]
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Pritzker unveils tax calculator
Tuesday, Mar 12, 2019 - Posted by Rich Miller
* Gov. Pritzker’s office has a new online calculator to help you figure out what your taxes would be under his progressive tax proposal. Click here to see it.
The Tribune also has a new online calculator, but its calculations don’t include the new $100 per child tax credit or the increased property tax credit, so it’s less useful. However, the Tribune’s calculator gives you your total bill (although flawed), while the governor’s calculator only tells you how much less or more you’ll pay.
…Adding… Press release…
After unveiling his fair tax proposal that gives relief to 97 percent of taxpayers, Gov. Pritzker launched a Fair Tax Calculator today to let Illinoisans see how the fair tax will affect their families.
The Fair Tax Calculator is available at www.illinois.gov/FairTaxCalculator.
“As I said throughout the campaign, Illinois’ flat tax system is regressive and unfair to the middle class and those striving to get there,” said Gov. JB Pritzker. “People like me should pay more and people like you should pay less. Simple. That’s what the fair tax will do.
“As we negotiate this proposal with the General Assembly and ultimately ask the people of Illinois to decide, my administration is committed to being fully transparent and giving residents the tools they need to understand this proposal. To that end, I’m proud to introduce the Fair Tax Calculator. This calculator will allow every taxpayer in Illinois to calculate exactly what the fair tax will mean for them and their family.”
In addition to shifting from a regressive flat tax to a fair tax, Governor Pritzker’s proposal would increase the property tax credit by 20 percent and institute a new $100 per child tax credit.
Users can input their income, filing status, exemptions, dependents, property tax paid and K-12 expenses to calculate how the fair tax compares to the current flat income tax.
Using that information, the calculator determines how much the total tax bill changes. For 97 percent of Illinois taxpayers, the amount will go down. In some cases the reduction will be nominal; in others, it will result in several hundred dollars.
“Illinois’ unfair tax structure forces the lowest earners to shoulder a greater tax burden than higher earners, but Gov. Pritzker’s plan will make the wealthy pay their fair share,” said William McNary, c0-director of Citizen Action/Illinois. “When the top 1 percent who make more than $537,800 a year pay just 7.4 percent of their income in taxes while the lowest 20 percent of earners making less than $21,800 a year pay 14.4 percent, the time for change is now.”
“Working families across the state will benefit from Gov. Pritzker’s fair tax plan that gives 97 percent of taxpayers relief and returns fiscal stability to Illinois,” said Bob Reiter, president of the Chicago Federation of Labor. “We must put the days of governing by crisis behind us and institute a fair income tax that ensures state government can adequately serve the people.”
“Gov. Pritzker is making good on his promise to make our state a better place to live for working families,” said Carole Pollitz, a business agent with IBEW Local 134. “Raising wages and reducing taxes on the middle class gives the average Illinoisan a break and benefits our entire state in the process.”
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