* Current Illinois Constitution…
In any such [income] tax imposed upon corporations the rate shall not exceed the rate imposed on individuals by more than a ratio of 8 to 5.
One idea behind that clause was to prevent the General Assembly from jacking up rates on corporations by making sure they’d also have to raise rates on individuals.
The current corporate income tax rate is 7 percent (not including the Personal Property Replacement Tax), while the personal rate is 4.95 percent. That’s an easy-to-figure ratio of 7 to 4.95, so there’s actually a little cap space remaining. The corporate rate could legally be increased right now to 7.92 percent (plus PPRT).
* From the governor’s proposed constitutional amendment…
In any such [income] tax imposed upon corporations the highest rate shall not exceed the highest rate imposed on individuals by more than a ratio of 8 to 5.
Pritzker’s highest proposed individual income tax rate is 7.95 percent. The governor’s proposed corporate rate is 7.95 percent.
But that 8-5 ratio amendment means the corporate rate could legally be increased to 12.72 percent, plus the 1.5 to 2.5 percent PPRT. That means the highest final corporate rate could go as high as 15.22 percent.
Whew.
…Adding… If they cap out, and I’m not saying they will, that rate would be the highest anywhere…
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*** UPDATED x1 *** Mission accomplished
Wednesday, Apr 10, 2019 - Posted by Rich Miller
* A Senate appropriations committee held a hearing on the Illinois Department of Human Services budget this week…
Another proposed increase is for the Child Care Assistance Program.
Parents at 185 percent of the federal poverty line can get child care assistance now. DHS is looking to increase that to 200 percent, which could cost about $30 million more.
Righter said that before putting more money into the program, DHS needs to figure out why there’s $100 million in unused funding for the program with the existing income threshold.
“Going to 200 or 215 [percent of the FPL] is good eye candy,” Righter said, “but if we’re leaving people on the table who have less money than that, nobody wants that. Nobody wants that. I don’t care what party you are, nobody wants that.”
State Sen. Ram Villivalam, D-Chicago, agreed there needs to be an answer why there’s excess money at the lower threshold.
“I’m supportive of increasing the eligibility, but we have 69 percent of the families that are eligible that are not part of the program,” Villivalam said.
Villivalam used to work for SEIU Healthcare, so he should know the answer to his question.
* Child care advocates have been predicting this would happen ever since Gov. Bruce Rauner started slashing eligibility in 2015. Let’s fire up the Wayback Machine…
Under new Illinois Department of Human Services rules instated July 1, [2015] some parents earning minimum wage in full-time jobs make twice as much as the cutoff.
In fact, 90 percent of parents throughout the state who tried to sign up after July 1 are no longer eligible, according to estimates by lawmakers and advocates. That includes not only families new to the program, but those parents, like Jamison, who had not used the program during summer months and tried to re-enroll only to discover they no longer qualified. […]
The state assistance program was created after the 1996 federal Welfare-to-Work initiative. Prior to July 1, it had served families that earned up to 185 percent of the federal poverty line, which would be $51,634 for a family of five or $29,101 for a single parent and child. Under the new emergency rules enacted by Gov. Bruce Rauner’s administration, if a single parent with one child earns more than $7,968 a year, that family is no longer eligible. In all, about 20,000 children who would otherwise be eligible for the Child Care Assistance Program are expected to be without state-subsidized care by the end of the month. More than 160,000 children had care through the program up until the rule change. The new rule does not apply to families already enrolled at the time it took effect.
“Those slots now that child care providers have are sitting open, and they can’t fill them because 90 percent of people who would apply are no longer eligible,’’ says Emily Miller, director of policy and advocacy for Voices for Illinois Children.
Those projections were revised upward to 30,000 kids being deemed ineligible, then revised up again to 40,000. Because of that, a whole lot of providers simply gave up due to lack of work, decimating the provider network.
* From Villivalam’s own union back in October of 2017…
In budget documents released Tuesday, Governor Rauner declared he would cut nearly $60 million for an extension of the Child Care Assistance Program that was both mandated by the federal government and approved by the state legislature. That funding would go to expand CCAP eligibility for working families from six to twelve months, per the federal block grant, and ensure that families have the continuity of care they need.
Currently, Illinois’ CCAP eligibility is re-determined every 6 months, and children can lose access to their care setting, even if they are eligible again a short time after they are removed from the program. This creates a reality where kids churn in and out of child care settings and subsidy payments, leading to instability that impacts their development and school readiness, and adds additional burdens to working parents.
* Also from SEIU Healthcare just eight months ago…
Rauner began his war on child care in the summer of 2015, unilaterally slashing the Child Care Assistance Program by 90%. Time and again, the governor vetoed legislation to restore and expand CCAP eligibility, despite desperate pleas from many parents that his CCAP cuts put them at risk of losing their jobs or having to drop out of school.
After two years, SEIU child care providers and working parents have forced Governor Rauner to fully reverse his child care cuts. However, the damage has been done. Today CCAP serves nearly 40,000 fewer children than before Rauner’s 2015 cuts and has 10,000 fewer child care providers in program.
The task at hand is to convince parents and potential providers that this is now a stable, reliable program. That won’t be a simple matter.
*** UPDATE *** Sen. Villivalam called to say that what he was trying to get across at the hearing was the dire need for public outreach. DHS, he said, isn’t doing much to inform the public. Villivalam has a bill in the hopper, SB1321, which would require DHS to promote the availability of the Child Care Assistance Program. That bill passed the Senate unanimously.
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Let the obfuscation begin
Wednesday, Apr 10, 2019 - Posted by Rich Miller
* Let’s begin our coverage of the governor’s graduated income tax press conference with this Tribune excerpt…
GOP lawmakers and a pro-business political committee called Ideas Illinois, run by former Illinois Manufacturers’ Association chief Greg Baise, have attacked Pritzker’s proposal as a “jobs tax” and argued that it would push businesses and wealthy residents out of state.
“For those who will oppose a fair tax by waging a misinformation campaign, it is transparent that you are defending an unfair status quo that benefits the wealthiest Illinoisans instead of offering your own ideas for how to fix our state’s problems,” Pritzker said.
The governor cited a report from PolitiFact Illinois that rated the “jobs tax” claim as false.
The PolitiFact rating is here.
I’m dubious of that rating because the “jobs tax” phrase is basically just an advertising slogan.
So, for instance, the Sun-Times calls itself “The Hardest-Working Paper in America.”
But is it “really” the hardest-working paper in all of America? I’m sure I could find experts, as PolitiFact often does, to establish some benchmarks about what hard work is, and about how reporters work very hard all over the country. I could then send an e-mail to the paper’s publisher asking him to justify the slogan, then follow up with maybe the Tribune’s publisher to see if he agreed. And then I could easily rate that slogan “False” or even “Pants on Fire!” because it wasn’t true.
Yes, that would be silly, but don’t we generally hold newspapers to a higher standard than dark money committees? Should they be allowed to run such misleading ad campaigns? Who’s going to speak for the children?!
* Onward…
The proposed amendment to change Illinois’ constitution from a flat income tax to one with higher rates for higher earners will get a last-minute hearing Wednesday in Springfield. […]
On Tuesday, state Sen. Don Harmon, D-Oak Park, requested the six-day posting requirements to hold a committee hearing be waived. He asked for his Senate Joint Constitutional Amendment No. 1, which includes language to change the state’s flat tax to a tax structure that levies higher rates on higher incomes, to be heard in the Senate Executive Committee on Wednesday.
State Sen. Dale Righter, R-Mattoon, objected.
“What’s at issue here is a substantive amendment to the Illinois constitution that will affect the finances and taxes of millions of Illinoisans,” Righter said. “At the very least, the six days notice required is appropriate for this body … to have a conversation about the contents of the amendment and the effects it might have on our constituents.”
I don’t particularly care for the posting waiver, either. But, really, what actual “conversation” can Senators have while the proposal awaits a committee hearing? Isn’t that what a hearing is for?
* The proposed constitutional amendment deletes this line from the existing document…
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.
* Republicans pounced…
Under the proposed language, they argued, the state would actually be allowed to levy multiple income taxes, each for a different purpose, which would effectively allow the state to tax the same income multiple times. […]
“That means it could set up for all kinds of surcharges,” Maisch said. “It means you could go ahead and actually have a second income tax to go ahead and fund, I don’t know, transportation or whatever the other need is. But they are eliminating that taxpayer protection that says, ‘this dollar of income can only be taxed once by the state.’” […]
According to Harmon, the prohibition on levying multiple income taxes was simply a companion to the requirement for a single, flat tax rate. Without that prohibition, he said, the framers feared that lawmakers could levy a series of “flat” taxes on different levels of income – say, for example, one on income up to $30,000; another “flat” rate on income between $30,000 and $60,000, and so on – effectively creating a multi-tiered tax structure through a series of limited “flat” taxes on different levels of income.
By allowing the state to create a multi-tiered tax structure, Harmon said, the prohibition on multiple taxes would become unnecessary.
Furthermore, he said, if supporters of the proposed change had left in the prohibition on multiple taxes, critics would likely argue that a multi-tiered structure would violate that prohibition.
* Here’s the newly originally proposed language…
There may be one tax on the income of individuals and corporations. This may be a fair tax where lower rates apply to lower income levels and higher rates apply to higher income levels. No government other than the State may impose a tax on or measured by income.
I get what Harmon is saying, but somebody may have over-thought that language deletion. They should’ve just left the originally proposed language in place.
…Adding… Um, so how does one get this headline…
Study: Pritzker’s tax hike more likely to force out middle, lower earners
From this?…
One of the arguments from opponents of Gov. J.B. Pritzker’s proposed progressive income-tax amendment to the Illinois Constitution is that another tax hike, particularly on upper-income earners, will encourage more people to leave the state.
But a new study conducted by Chicago’s Better Government Association contends that statistics do not support that contention. At the same time, the BGA study shows that the earners Pritzker says he cares about most — middle- and lower-income earners — are the hardest hit by tax increases and most likely to leave the state because of them.
Unlike all previous income tax hikes, this one would only be on upper-income folks.
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* From the mayor-elect…
Mayor-elect Lightfoot to spend Wed and Thurs in Springfield
Mayor-elect Lori Lightfoot will spend Wednesday and Thursday in Springfield. On Wednesday, Lightfoot will address the Illinois House of Representatives and meet with Governor JB Pritzker, Lieutenant Governor Juliana Stratton, Speaker Michael Madigan, and Leader Jim Durkin. On Thursday, Lightfoot will address the Illinois Senate and meet with President John Cullerton, Leader Bill Brady, and Leader Kimberly Lightford.
Address to the House of Representatives
When: Wednesday, 4/10, 3:15pm
Where: House of Representatives Floor
Press availability: This address is open press. Lightfoot will be available for comment following her address.
Address to the Senate
When: Thursday, 4/11, 11:15am
Where: Senate Floor
Press availability: This address is open press. Lightfoot will be available for comment following her address.
…Adding… Times are being firmed up…
Updated: Daily Public Schedule: Wednesday, Apr. 10, 2019
What: Gov. Pritzker to greet Mayor-elect Lori Lightfoot ahead of their first meeting in Springfield.
Where: Illinois State Capitol, Governor’s Office, Springfield
When: 1:30 p.m.
Note: No additional media availability.
* Meanwhile…
Mayor-elect Lori Lightfoot released the following statement in advance of the Wednesday Finance Committee meeting.
“From day one, I’ve stood with the grassroots movement to seek transparency and community input in Lincoln Yards and The 78. I’ve advanced a set of priorities throughout this effort, including the need for clear and specific plans from the developers to boost inclusion of minority- and women-owned businesses.
“I am appreciative of Mayor Emanuel and Finance Committee Chairman O’Connor for agreeing to defer Monday’s vote on Lincoln Yards and The 78 to allow my team additional time to seek clarity and address our concerns. Based on subsequent conversations with Mayor Emanuel, community stakeholders, and a number of aldermen, we expect that this deal is likely to pass tomorrow.
“As a show of good faith, my team had productive meetings today with both developers. As a result of those conversations, I am pleased to report that both developers agreed to meaningfully strengthen their commitments to minority-owned and women-owned business enterprises (”MBE” and “WBE”) from the original terms. The increases would lift the overall M/WBE participation by $80 million to $400 million overall. In addition, both developers agreed to add language to the redevelopment agreements to provide explicit controls for the City to measure and require compliance with actual utilization of M/WBEs on the projects. These changes represent a vital sign that my administration will be able to make progress toward an equitable and fair deal for our communities.
“There remains much more work to do in this regard, and I am hopeful we’ll be able to get there. Under the terms of both redevelopment agreements, we have confirmed that the City has additional controls over these projects, which I am confident will allow for us to further improve these deals and to bring community voices into the process going forward.
“There are likely sufficient votes to advance these proposals tomorrow. I am not yet the mayor, and I recognize that the current administration and City Council must decide whether to carry this vote forward according to the interests of the constituents they serve. Either way, upon swearing in, I will engage with the community and committed activists who have advocated forcefully for affordable housing, park space and the responsible use of tax increment financing dollars for many months. And in making future decisions about these and all other deals, we will work with stakeholders to allow for robust community input from the beginning and throughout.”
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Graduated tax starts to move
Tuesday, Apr 9, 2019 - Posted by Rich Miller
* Press release…
Governor JB Pritzker and leading members of the General Assembly announced a major step forward for the fair income tax, as lawmakers introduced language to amend the state’s Constitution, which currently requires that all taxpayers pay the same rate, regardless of their income. Governor Pritzker’s proposed fair income tax would address the state’s multi-billion-dollar budget deficit by raising taxes only on those making more than $250,000, who represent only 3% of taxpayers.
“Working with the General Assembly, my administration is taking an important next step to change our tax system to be more fair to the middle class,” said Governor JB Pritzker. “The action we’re taking today means we are one step closer to giving voters a choice about whether the wealthy will pay more and 97% of families will pay the same or less. I’ve said from the beginning that it doesn’t make sense that I pay the same rate as a teacher or first responder, and today brings us closer making Illinois’ tax system fair.”
The amendment would revise the state’s Constitution as follows:
Current
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. In any such tax imposed upon corporations the rate shall not exceed the rate imposed on individuals by more than a ratio of 8 to 5.
Proposed
The General Assembly shall provide by law for the rate or rates of any tax on or measured by income imposed by the state. In any such tax imposed upon corporations the highest rate shall not exceed the highest rate imposed on individuals by more than a ratio of 8 to 5.
As the constitutional amendment moves forward, Governor Pritzker’s administration is simultaneously continuing negotiations with the General Assembly over the tax rates, which would ensure that only those making more than $250,000 a year – only 3% of residents – would pay more in taxes. Additionally, the governor has proposed increasing the property tax credit by 20% and creating a child tax credit targeted to working families.
The administration expects that rates will be finalized with lawmakers this legislative session so that Illinoisans can understand how the rates would affect their family before voting on the constitutional amendment. More information is available at www.illinois.gov/FairTaxCalculator.
SJRCA1 Amendment 1 is here.
The plan is to move the proposal forward this week and vote on it in the Senate when they return from spring break.
…Adding… Response…
“Today is the first step by Springfield politicians to hand themselves a blank check with middle class families’ hard earned money,” said Greg Baise, chairman of the anti-graduated tax dark money group Ideas Illinois. “With zero transparency and zero accountability, JB Pritzker and Speaker Madigan are preparing to stick taxpayers with a massive Jobs Tax that will hurt job creators in our state. At the very least, the politicians who are set to support yet another massive tax hike should do the right thing and release their full tax returns so voters have a clear picture.”
* And…
Think Big Illinois Executive Director Quentin Fulks released the following statement on the newly announced language for the fair tax constitutional amendment:
“It’s time for Illinois to have a tax system that works for everyone, not just the wealthy few, and Think Big Illinois applauds the amendment language proposed by Governor Pritzker and Democrats in the legislature today. A fair tax will help address Illinois’ $3.2 billion budget crisis and put our state on the path toward fiscal sustainability, all while lifting the burden off middle and working-class families who are disproportionately hurt under our current unfair tax system.
“This amendment language is an important step toward ensuring Illinois voters have the opportunity to make their voices heard on this critical issue and decide if they want the wealthiest Illinoisans to finally pay their share.
“Think Big Illinois remains committed to being a staunch ally for our working families as we implement a fair tax in our state.”
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