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* 6:00 pm - The House Democrats’ “budgeteer” told reporters this evening that he believes there is a passable income tax deal on the table.
The proposal would raise personal income tax by 2 points, rather than the 2.25 points in the earlier version. The corporate income tax hike would be cut in half.
Rep. Frank Mautino said there were a lot of things still being debated on the spending side, but that there would be a hard expenditure increase cap. Any spending above that cap would automatically trigger the nullification of the tax hike law.
Mautino said he believed this new plan could be passed and sent to the governor’s desk.
It wasn’t entirely clear whether the cigarette tax hike will be included in the mix, however. Mautino said proponents were still working the issue.
Video in a few minutes.
…Adding… Rep. Mautino explains the deal…
* 6:27 pm - Sen. Donne Trotter, the Senate Democrats’ budgeteer, just basically confirmed what Rep. Mautino said earlier.
Trotter added that the Illinois Auditor General would rule if the state exceeds the expenditure cap.
Video in a few.
…Adding… Trotter video…
* 6:41 pm - Tribune…
Rep. Frank Mautino, D-Spring Valley, and Sen. Emil Jones III, D-Chicago, said the new rate under consideration for businesses is 7 percent. Last week’s plan had the corporate rate rising from 4.8 to 8.4 percent.
“I think it moves the ball,” Mautino said.
By changing the corporate rate, the business community could save $500 million a year, said Mautino. […]
“The last two components are the big ones,” Mautino said. “You have to have cuts, and if we put that (hard) cap on (spending), make no mistake about it, there will be cuts.”
posted by Rich Miller
Monday, Jan 10, 11 @ 6:01 pm
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Comment by Rich Miller Monday, Jan 10, 11 @ 6:05 pm
Hey Rich,
Is there no discussion of SB 3644? This could have a huge impact on state employee’s and collective bargaining.
Comment by southern illinoisan Monday, Jan 10, 11 @ 6:15 pm
Well, if it’s accurate, I guess the need to appease the corporates is what got us regular taxpayers the tiny.25 reduction in the personal tax proposal. They could hardly risk the furor of making only a corporate reduction in the proposal.
It doesn’t sound good when framed that way, but this is Illinois. When big money talks, politicians listen. And since a sizable chunk of the new billions will go to public employees (pay down pension debt, salary and benefit increases in future contracts) AFSCME, another powerful player in Springfield, is likely to support this
highly un-progressive deal which also favors the wealthy and corporate interests, as well as union intersts.
The middle class really has no representation in Springfield. But maybe it’s our own fault for not paying attention.
Comment by cassandra Monday, Jan 10, 11 @ 6:27 pm
In regards to SB 3644, I read somewhere today that AFSCME contacted Rep. Currie and asked for specifics about collective bargaining rights. Rep. Currie was quoted as stating that few union members will be affected, and she was to add a rider to the bill showing a list of positions that are exempt (or something like that, it’s been a long day). I believe what she said is that there is a problem with supervisors who are in the bargaining unit who are not disciplining workers.
Comment by Grandson of Man Monday, Jan 10, 11 @ 6:32 pm
I think it is amusing that people don’t think a raise in the corporate tax affects them…as if prices just won’t go up on everything we buy to compensate the businesses.
I guess it acts as a sort of VAT.
Comment by Federal Farmer Monday, Jan 10, 11 @ 6:40 pm
Cassandra,
Union interests are substantially middle-class interests.
Comment by Grandson of Man Monday, Jan 10, 11 @ 6:40 pm
Do you think the votes are there for this monstrosity?
Comment by crcostel Monday, Jan 10, 11 @ 6:41 pm
“By changing the corporate rate, the business community could save $500 million a year, said Mautino.”
That’s great framing
Comment by ok Monday, Jan 10, 11 @ 6:44 pm
Could someone please get more information out about SB 3644. Thanks.
Comment by DuPage Dave Monday, Jan 10, 11 @ 6:45 pm
In the calculations of how much money the general assembly plans on receiving from these tax increases, did they allow for the people and businesses who may leave Illinois due to the high taxes?
Comment by DRB Monday, Jan 10, 11 @ 6:47 pm
According to the general assembly web site SB3644 has passed the house on third reading. It says it passed the Senate back in March. So does that mean it’s a done deal and off to the Governor? After reading it and the amendments it doesn’t specifically name the positions affected, just generalizes those in “manager”, “supervisory”, etc. positions. The only specific positions named were Executive I in SOS, some wardens and a few others, but nothing across the boards
Comment by Former Merit Comp Slave Monday, Jan 10, 11 @ 6:48 pm
@DuPage Dave http://www.afscme31.org/news?id=0136
Comment by Reality Check Monday, Jan 10, 11 @ 6:48 pm
DD, I’ve been writing about it since Saturday.
Comment by Rich Miller Monday, Jan 10, 11 @ 6:49 pm
Thanks Rich. It’s been a busy weekend. But this bill hits close to home. I can’t figure out who stands to lose the most, but AFSCME hates it, so it can’t be all bad.
Comment by DuPage Dave Monday, Jan 10, 11 @ 6:55 pm
AFSCME just sent out email to all members asking them to call their Senators tonight and tell them to oppose the bill. Got a feeling it’s already a done deal.
Comment by Former Merit Comp Slave Monday, Jan 10, 11 @ 6:58 pm
Let’s stick to the topic at hand please.
Comment by Rich Miller Monday, Jan 10, 11 @ 7:01 pm
I find it amazing that while everyone says they are worried about jobs and growing the economy in IL, our lame duck legislature thinks that making IL the third highest corp taxed state (PA 1, AL 2) will foster new economic growth.
Comment by Anon Monday, Jan 10, 11 @ 7:02 pm
Mea culpa.
Comment by DuPage Dave Monday, Jan 10, 11 @ 7:02 pm
Let me guess: pensions and borrowing costs will not be under that “hard” expenditure increase cap. Let’s dream of all the things that can/will be excluded…
And since when does a reduction in a proposed tax increase = a savings? The business community would recognize savings when the rate was cut from where it is at, not where it is going.
Comment by Meals Monday, Jan 10, 11 @ 7:03 pm
Cassy, If I drank a beer every time you said “middle-class”….. I would drink a lot of beer.
Lot of heavy lifting the last couple of weeks. When we look back, we probably could have predicted it two years ago.
Gee, do you think Drudge will be all over the Illinois budget issue next week? Or will a cow with two heads be born in Mongolia? It get’s the same amount of prominence and coverage.
Comment by wordslinger Monday, Jan 10, 11 @ 7:03 pm
{By changing the corporate rate, the business community could save $500 million a year, said Mautino. […]}
Is this guy a used car salesman in real life? If every 1.4 = $500 million, then by moving across the border they could save another $785 million, and be done with Illinois and its politicians.
Comment by Quinn T. Sential Monday, Jan 10, 11 @ 7:04 pm
Well how about this. A young individual working at a minimum wage now can pay Illiois income taxes to support retired states employees that have pensions larger than what that young individual makes in a year. I wonder what goes through retired Governmental employees minds when they think of this disparity that they are living in.
Comment by Laughing_all_the_way Monday, Jan 10, 11 @ 7:06 pm
Saves the corporates $500 million. What a great headline. And from a Democrat!! It’s not 2008 any more, I guess.
I’d like to believe in “hard expenditure caps” but
all accounting is such smoke and mirrors, I think such caps would be easy to get around. More pushing the can down the road. “Oh yea, we’ll have hard expenditure caps….yeah, that’s right, or something bad will happen… Now, give us the money….quick.”
Comment by cassandra Monday, Jan 10, 11 @ 7:07 pm
BTW; and apologies in advance for OT, but the way Linda Chapa Lavia keeps blocking and tackling for the existing riverboat licensees on SB 737, someone should see if she might be available to play for the Bears next weekend. I am sure Jay Cutler would appreciate the help.
Comment by Quinn T. Sential Monday, Jan 10, 11 @ 7:09 pm
This will be the end of MJM’s power in the State. Finally.
Comment by park Monday, Jan 10, 11 @ 7:16 pm
Anyone have a U-Haul business I can invest in? With a huge tax increase like this, it will be a growth industry.
Comment by Ghost of John Brown Monday, Jan 10, 11 @ 7:23 pm
Why do people believe politicians when they say the corporate tax rate will be 7%. Every corporation, including small businesses, that make money will also have pay an additional 2.5% which Illinois calls a ““personal property replacement tax” bringing their total tax rate in IL to 9.5%
Comment by Anon Monday, Jan 10, 11 @ 7:29 pm
We don’t know if this will even fix the state’s problems unless you deal with pensions and spending we will be back again. This has gone on and on for many years.
Comment by John Preston Mootz Monday, Jan 10, 11 @ 7:35 pm
Just found out SB3644 passed the house and I will lose #25,000 and be back to a 2nd class employee. I will now be supervising an RN making $40,000 more than me. Time to look for an
other job.
Comment by Screwed Employee Monday, Jan 10, 11 @ 7:47 pm
Laughing all the way - the only “State Employees” getting high pension are the elected officials. Hate to break it to you but MY state pension will be less than 25K a year. Elected Officials on the other hand get 80-100% of their FINAL salary for life when (if) they retire. And then they pass the torch to a family member (read EJIII) so they to can be taken care of for life.
Comment by State Worker W/ an MBA Monday, Jan 10, 11 @ 7:47 pm
“If” they put the hard cap on spending on it . . . make no mistake about it there will be cuts.”
Why does this quote ring hollow?
What is scary is that it is coming from a pretty straight up fellow.
Comment by Louis G. Atsaves Monday, Jan 10, 11 @ 7:48 pm
–Anyone have a U-Haul business I can invest in?–
Good one, chief. You just must have just got last week’s memo, and felt the need to chime in.
I have a better, more original one for you: “Take my wife — please.”
Comment by wordslinger Monday, Jan 10, 11 @ 7:48 pm
The breathless overreactors here are so cute. Everyone is leaving!!! MJM is done!!! Do you guys know the lottery numbers too?
Comment by The Captain Monday, Jan 10, 11 @ 7:55 pm
So the Michiganization of Illinois has begun. Chicago, meet Detroit.
I can say this, if I made widgets, I would certainly do so somewhere else.
Comment by DuPage Moderate Monday, Jan 10, 11 @ 8:12 pm
“…A young individual working at a minimum wage now can pay Illiois income taxes to support retired states employees that have pensions larger than what that young individual makes in a year. I wonder what goes through retired Governmental employees minds when they think of this disparity that they are living in.”
You gotta be kidding me right now. People making minimum wage generally get tax REFUNDS. I guess this is a new form of “class” warfare in Illinois… the rich, poor and middle class are all teaming up against a “class” of state employees. People talk like state employees are worse than the Wall Street fat cats that get million dollar bonuses while creating the environment in which our financial systems nearly collapsed. I understand that people are hurting, and its easy to be bitter about the hard times that we are all experiencing, but lets try to keep a level head here!
Comment by Anonymous Monday, Jan 10, 11 @ 8:14 pm
–I think it is amusing that people don’t think a raise in the corporate tax affects them…–
That’s from someone with the handle Federal Farmer, which, if really from a farmer, is pretty funny but at least knows which side the bread is buttered.
You find me a farmer who isn’t making the nut through a federal price support check or tariffs (cost passed on to the consumer), and I’ll buy you an illegal Cuban cigar.
My guess is your taxes don’t cut the mustard for your schools or roads, either. As a suburbanite, you’re very welcome. I pay my own way up here.
Anyone have the tipping- year when people in this state though they were entitled to something for nothing?
Comment by wordslinger Monday, Jan 10, 11 @ 8:20 pm
I cannot believe the House passed this bill with little to know debate. The new definitions within this Bill will affect Thousands of State Employees Union Rights. Supervisors will be making thousands less than the employees they Supervise….Only in State Government!
Comment by SB4644 Passed R U kidding Me Monday, Jan 10, 11 @ 8:22 pm
Not in IL, they don’t get tax refunds. We have a flat tax state, m’dear. Minimum wage employees(young or old) are going to have their taxes hiked to support a 55 yr old retiree making 80k a year, doing nothing, paying no state tax. Not to mention the gold-plated health care, cost of living adjustments, etc.
Our company is leaving the state. Who can blame ‘em? We’re going, too.
IF you gov’t employees just think folks are going to slave away here to keep you in fiscal-fat, you’re sadly mistaken.
And you’ll be no better off a year from now, then you are now. You’ll be worse off, because you don’t have as many wage-slaves in state carrying you royal litters.
Sucks, but there it is. Adjust to a new reality. You brought it on yourselves.
Comment by Anonymouse Monday, Jan 10, 11 @ 8:22 pm
–So the Michiganization of Illinois has begun. Chicago, meet Detroit.–
Nice cheap shot, based on nothing.
The Chicago Metro is the fourth largest economy in the world, and the most diverse economy in the country, according to the rating agencies. Look it up.
By the way, the story of 20th Century Detroit is a little more complicated than you might think. Because of the ingenuity, guts and hard work of its folks, including its UAW members, they were the Arsenal of Democracy and contributed more to the defeat of the Nazis and Japanese than Ike, Patton and MacArthur combined.
Because they had tooled up so much for the war, they boomed. In 1950, 50% of the internal combustion engines on the planet Earth were produced in Detroit city limits. It couldn’t last, unless you wanted to keep your foot on the knecks of the Germans and Japanese, or keep our southern cousins backwards and barefoot.
Detroit will be back, not as the greatest industrial giant of all time, but good enough for the good people of Michigan. Geography and geology can’t be denied, and Detroit will be flourishing — as will Cleveland, Toronto, Buffalo and the rest of the Great Lakes — when the federally subsidized mirages of Phoenix, Las Vegas and more in the southwest have been reclaimed by the desert.
Comment by wordslinger Monday, Jan 10, 11 @ 8:36 pm
===I cannot believe the House passed this bill with little to know debate. The new definitions within this Bill will affect Thousands of State Employees Union Rights. Supervisors will be making thousands less than the employees they Supervise….Only in State Government!===
You’re missing the point. You aree’t underpaid-the people under you are overpaid. Do you believe the union public service administrators are worth over $110K/year?
Comment by Soccertease Monday, Jan 10, 11 @ 8:42 pm
SB 3644 will devastate Revenue. They are already very thin at the working manager levels because of the way Blagojevich and Quinn have treated merit comp. People who haven’t gotten into the union cannot be replaced when they leave because no union employee will accept a promotion to merit comp and these jobs require too much experience to be filled from outside. Take union protection away, and there won’t be an attorney or senior audit supervisor left by 2012, because each one leaving will just dump more overwork on the ones who are left, and these are people who are employable elsewhere.
Comment by JustMe Monday, Jan 10, 11 @ 8:42 pm
I’m getting kind of irritated with all these “the economic sky is falling! We’re going to turn into another Detroit!” comments. Yes, I realize we need serious spending cuts too, and I would like to see more specifics on that.
But if you want to get rid of this budget deficit without ANY kind of tax hike, you would have to shut down state government completely and allow its entire infrastructure — roads, prisons, parks, everything — to fall into ruin (which actually is already happening). You would also basically have to allow the entire state university/community college system to either fall into ruin or become so prohibitevely expensive (due to tuition hikes and lack of student aid) that only the rich can attend. Think that is going to make Illinois more attractive to business?
At this point, there is probably nothing that can be done that won’t make Illinois less attractive to business, and result in lost jobs, for the next few years at least. (But like I’ve said before, there really isn’t anywhere one can completely escape from the effects of the recession; even Texas is now facing a massive budget deficit.) The only question is how to contain the damage so that some kind of recovery is possible a few years down the road. I guess that will depend on any temporary tax hike being truly temporary.
Comment by Bookworm Monday, Jan 10, 11 @ 8:44 pm
@Wordslinger, I hope you don’t make your living as a psychic…
I live and work in Chicago and I pay taxes…lots of taxes.
Comment by Federal Farmer Monday, Jan 10, 11 @ 8:44 pm
Gee whiz, Federal Farmer, for some reason I assumed you were a farmer.
As far as your “lots of taxes,” I hear you. But I like what I get, for the most part, and I was raised not to expect something for nothing.
Anonymouse — are you still leaving, after all these months? Can’t miss you if you never leave, brother. I saw a bunch of U-Hauls at my gas station tonight — apparently there’s not a run on them yet.
Comment by wordslinger Monday, Jan 10, 11 @ 8:52 pm
==Well how about this. A young individual working at a minimum wage now can pay Illiois income taxes to support retired states employees that have pensions larger than what that young individual makes in a year. I wonder what goes through retired Governmental employees minds when they think of this disparity that they are living in.==
Laughing, it’s so much more than that.
There are 4352 retired Illinois government workers who have pensions in excess of $100,000, according to National Taxpayers United of Illinois.
That’s about six times what your minimum-wage worker makes, and of course leaves out health care.
The average Illinois teacher pension is $46,000, more than triple the average Social Security benefit.
This year teachers are paying in about $900 million ($0.9 billion) to the Teachers’ Retirement System while retirees are taking out $4.2 billion.
The out minus in gap grows every year as pensions and number of retirees increase, while money paid in is flat.
The checkout lady at the supermarket who makes $9 an hour will be paying $300 more a year in taxes to pay for all this if the tax hike passes.
Comment by Rambler Monday, Jan 10, 11 @ 8:53 pm
@Just me - there’s an easy solution to that “problem” - the Director and the administration have to make a committment to the merit comp folks. It worked up until about B2003. The only reason the folks covered by SB3644 began to opt for union representation is because the Blago administration stiffed them for years in the hopes that they would leave and they could replace them with their own folks. Prior administrations seemed to understand that you need a group of professionals to run the day-to-day operations
Comment by Just the Facts Monday, Jan 10, 11 @ 8:58 pm
Too bad there’s no GOP leadership either. Tax hikes could have been stopped if Republicans had a workable alternative and knew how to communicate. You can’t win with just childish games.
Comment by just sayin' Monday, Jan 10, 11 @ 8:58 pm
Just the facts, that is correct. However Blago hasn’t been here for the last 2 years and what has changed for the M/C folks? I went 6 years without a raise and would do it again if all other state employees did the same. Also, remember with the tax hike comes the promised cuts and spending limits. Will all state employees share the pain this time around? Methinks not
Comment by Former Merit Comp Slave Monday, Jan 10, 11 @ 9:09 pm
Just the Facts — that’s off the table for this administration. No one trusts them as it is, and SB 3644 is just more proof that they don’t merit any trust. If they intended to treat merit comp right, they would do that first and see if it didn’t reverse the unionization and decimation of the senior people. They only need SB 3644 because they have no intention of doing the right thing.
Comment by JustMe Monday, Jan 10, 11 @ 9:33 pm
Old Mil, just so long as you’re not drinking Old Mil. Life’s too short, brother.
Auburn 19, Oregon 11, 7:48 3rd.
Comment by wordslinger Monday, Jan 10, 11 @ 9:55 pm
Without massive reform, this is all a waste of efforts and dollars. Even if cuts and taxes were used to balance the budget today, the system is so bad that we’re doomed to end up back in a huge hole.
It ranges from the horrible abuse and inefficiency of appointing political hacks to run departments, to the powers afforded to state and local unions, to the makeup of the labor relations board, prevailing wage rules, arbitration rules, tollway authority abuses, work comp, school funding formulas, right down to the abused legislative scholarships.
Comment by Shemp Monday, Jan 10, 11 @ 10:23 pm
Why do so many people refuse to believe that the state is really and truly broke? That there is not enough revenue to cover expenses?
Let’s just get rid of paying for roads and schools and health care and disability services and revenue sharing with local government and everything will be peachy. And we can change our name to North Kentucky.
Comment by DuPage Dave Monday, Jan 10, 11 @ 10:33 pm
Rambler. Your 9 dollar an hour clerk might just rent instead of making payments to buy a house. That means she or he will lose out on that proposed 300 something tax rebate while someone with a higher income and buying a house will get one.
Nothing like robbing the poor to feed the rich ya know
Comment by Laughing_All_The_Way Monday, Jan 10, 11 @ 10:41 pm
Are they gone for the night or just on recess?
Comment by Quinn T. Sential Monday, Jan 10, 11 @ 10:56 pm
“Time for me to move to Missouri”
Well, you might find this article interesting:
http://www.stltoday.com/news/local/columns/bill-mcclellan/article_3a74b3ab-b429-5bd9-a727-51f6a5643d58.html
“Missouri’s corporate income tax is 46th among the 50 states. If that low tax rate were causing businesses to move here, I’d understand the governor’s reluctance to discuss raising it. But if it’s not working, shouldn’t we at least discuss it?”
Comment by Bookworm Monday, Jan 10, 11 @ 11:03 pm
Hmmm…while the night is danced away…
http://ilga.gov/legislation/96/SB/PDF/09600SB2505ham002.pdf
Comment by Thoughts... Tuesday, Jan 11, 11 @ 12:56 am
Caps of $36.8M to $39.0M look to apply to GRF only - not hard to imagine them upping spending in other funds.
Comment by Returning dog Tuesday, Jan 11, 11 @ 7:18 am
For this year, the increase in the state income tax won’t be noticed too much by the average voter. It will be offset by the 2% drop in the social security payroll tax. Net income will remain flat.
Come 2012, that 2% drop is set to expire. That’s when the voters of Illinois will notice that their state income tax has gone up by 2%. It’s much, much closer to the elections than our legislators should be comfortable with. The voters may remember that when they step into the voting booth.
Comment by Aldyth Tuesday, Jan 11, 11 @ 7:32 am
“It will be offset by the 2% drop in the social security payroll tax. Net income will remain flat.”
Isn’t this calculation ignoring the federal income tax cuts received as part of the 2009 stimulus bill and that are expiring? This would be the “make work pay” credit that applied to 2009 and 2010 tax years. Low income workers would be coming out about the same with the $400 make for work credit or now the 2% reduction in social security tax reduction. So, their net take home will be going up with the 66% raise in state taxes.
Bottom line: we need progressive, graduated, IL income taxes.
Comment by vole Tuesday, Jan 11, 11 @ 8:00 am
Vole - We absolutely need progressive, graduated Illinois income taxes. We have needed it for decades and the legislature has shown its usual level of courage in dealing with it.
I was speaking for most tax payers, who will not notice a change.
Comment by Aldyth Tuesday, Jan 11, 11 @ 8:05 am
“So, their net take home will be going up with the 66% raise in state taxes.”
My bad. Their net take home earnings will be going down with the 2% (66%) increase in state income taxes.
Comment by vole Tuesday, Jan 11, 11 @ 8:05 am
I meant to write that net take home earnings for low income workers will be going down with the higher state income tax. Their overall, combined federal, state and local tax burden will increase.
Comment by vole Tuesday, Jan 11, 11 @ 8:09 am
“Swimming in debt, Ill. considers massive tax boost”
Headline from yahoo news. Not one mention of Public employees taking a pay cut though. Illinois can be proud
Comment by Bond_player Tuesday, Jan 11, 11 @ 8:19 am
Just to set the record straight…State Employees contribute to their pensions with each paycheck…it isn’t a “free ride” like has been typecast in the Chicago Tribune and other Right Wing rags…Most state employees will retire on a meager $25,000 per year after serving the State for a minimum of 28-30 years. And that monetary amount is most likely including their Social Security contributions as well…since most State Pension systems are coordinated with Social Security…so our pensions are also supplemented by our own Social Security contributions.
The State of Illinois stopped paying into the Pension system on time about 1991 under Gov. Edgar. Gov. Ryan raised a ton of additional monies, but failed to make half of his pension payments; Gov. Blagojevich fully funded the pension his first year, then fell into the same trap of his predecessors…before being impeached. All the while, the State Employees have been contributing to their pensions and showing up for work at our Prisons, Offices, or driving snow plows during the winter to keep the roads clear so the state can go about its’ business.
Why all the hate mongering towards us? All we’ve done is show up to work personally for the past 20+ years? We’ve made our pension payments. We’re taxpayers as well. Granted, the economic climate is bad right now…but has shown signs of turning around…the Right wing media wants to continue to foster the “haves’ and have-nots” of our society and paint the public employees in the “haves” genre…to get rid of Unions and the obligations of the State to pay it’s portion of the pensions. They’d be dancing in the isles of Michigan Avenue if that were to happen, in my opinion.
In regard to AFSCME, we have twice in the past two years deferred pay raises to help out the state…no one I work with has a problem with that…and we’re betting that we’ll have to contribute more to our pensions in the future…so we should be afforded the assurance that we’ll have a pension upon retirement from our 30+ years of service to the State of Illinois…service that isn’t a free ride…not in any form or fashion.
Those are the facts.
Comment by Pensions aren't free for us Wednesday, Jan 12, 11 @ 9:51 pm