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Pritzker talks taxes, Madigan and Rauner

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Illinois

* This was one of Chris Kennedy’s proposals…

Pritzker’s solution to that, at least in part, has been to change the state’s income tax from a flat rate to one that would hit wealthier people more, and lower-income folks less. That would take at least two years, however, because a needed consitutional amendment could not be approved by voters at least until the 2020 election. Pritzker said he has a short-term remedy: raise the overall rate, but then effectively lower it for most taxpayers by adding and expanding deductions for those with low and moderate incomes.

Pritzker offered no details or figures, and on occasion has made vague references to doing something quickly. But he was more definitive today, and said his plan is based on what has occurred in Massachusetts, which also has a flat tax but “unflattens” it through deductions and other devices that can be implemented by lawmakers.

“I don’t believe that’s a permanent solution,” Pritzker told me, referring to such an idea as “an artificial construct.” But, he added, “It’s something we could do right away” while the process of enacting a constitutional amendment begins.

* Meanwhile, Sun-Times…

But what else is out there? Pritzker was hit with negative headlines throughout his campaign, which began with a Sun-Times investigation which revealed he received a $230,000 property tax break by ripping out toilets in a Gold Coast mansion. Then came Tribune investigations revealing unfavorable FBI wiretaps of Pritzker speaking with Rod Blagojevich, the now-imprisoned former governor. And with just days ahead of the primary, Pritzker was forced to defend himself against a Chicago Tribune report that claimed Pritzker and his brother control several offshore companies created between 2008 and 2011 — suggesting that Pritzker may be avoiding paying taxes. The story contends one of Pritzker’s offshore companies is part of a venture that plans to buy land along the Chicago River to launch boat tours downtown.

“I think that they [voters] should anticipate that Bruce Rauner is going to run one of the most negative campaigns in history because he has nothing positive to run on, and I will fight a tough campaign,” Pritzker said. “You heard me talk about the fact that everybody needs to be ready for the fight, and we are. And it’s clear that Bruce Rauner threw everything he’s got at me in the Democratic primary and I overcame that as I will in the general election.”

I think the results show that Pritzker ran a much better campaign than he was given credit by the pundit class, including myself.

But Rauner clearly didn’t throw “everything he’s got” at Pritzker. His ads focused solely on Blagojevich. Now they move on to Madigan, ripping out toilets, offshore companies, Madigan, his investment portfolio, Madigan, toilets, Madigan, etc. and repeat.

* More…

And, Pritzker said, the Madigan card won’t work because voters are “sick and tired of Bruce Rauner.”

“He has been an utter and complete failure and blames his failures on Madigan every single time. People are just sick and tired of hearing it. It’s an old trick on his part, saying he’s not in charge. And it’s clear that the voters just aren’t buying it. Look at the results that he had yesterday in his campaign,” Pritzker said.

He may be right about Rauner, but the voters are also sick and tired of Madigan. I had my own interview with Pritzker this afternoon, so I’ll be sharing some of that with subscribers tomorrow.

* Back to Greg Hinz…

On Madigan, who drew strong attacks from other gubernatorial candidates in the primary, Pritzker stuck to his usual line, saying that he is “completely independent” and will set his own course while dealing with reality.

“You don’t get to choose who the speaker is,” Pritkzer said, later using the same language to apply to Madigan’s dual role as chairman of the Illinois Democratic Party. Pritzker conceded he [Pritzker] would have “a lot of influence” if elected, in part because Pritzker has built a separate campaign organization in each of the the state’s 102 counties. But he would go no farther.

I added that “Pritzker” after consulting with Greg.

posted by Rich Miller
Wednesday, Mar 21, 18 @ 1:31 pm

Comments

” That would take at least two years, however, because a needed consitutional amendment could not be approved by voters at least until the 2020 election.”

Nope. If the legislature votes to put it on the ballot by early May, voters can weigh in this November.

Comment by Montrose Wednesday, Mar 21, 18 @ 1:39 pm
I think the Madigan effect is wearing off, and I think the impact on Pritzker will be minimal. Rauner was Gov, and most people expect him to take responsibility.

Comment by Molly Maguire Wednesday, Mar 21, 18 @ 1:40 pm
Higher state income taxes on top of the fact that some wealthy people will be paying higher federal income taxes after the limiting of SALT. How much higher does JB and Mike Madigan think taxes have to go to pay for public pensions??? Hopefully , Rich can get the exact numbers out of JB so then voters will know what they are on the hook for.

Comment by Steve Wednesday, Mar 21, 18 @ 1:40 pm
===If the legislature votes to put it on the ballot by early May, voters can weigh in this November===

That’s true, but it would give Rauner and the ILGOPs precisely the message they need to hammer the Democrats with. I think it might be better to wait and put this to voters in a Presidential year.

Comment by 47th Ward Wednesday, Mar 21, 18 @ 1:48 pm
“That’s true, but it would give Rauner and the ILGOPs precisely the message they need to hammer the Democrats with. I think it might be better to wait and put this to voters in a Presidential year.”

Maybe. Pritzker is already on record for being in favor of increasing taxes, so they have that message no matter what. It depends on the rate structure. If it gives a tax cut to the vast majority of Illinoisans, it could help Pritzker. Voters like raising taxes on the wealthy. It may get the very people he wants to the polls.

Comment by Montrose Wednesday, Mar 21, 18 @ 1:53 pm
The “Because…. Madigan” didn’t appear to have much juice on either ballot. Maybe the general is a different story.

Comment by wordslinger Wednesday, Mar 21, 18 @ 1:56 pm
Mike Madigan had no problem working with any other Republican Governor.

Maybe the current one doesn’t quite understand how government actually works in the U.S.A.

Comment by Mike Cirrincione Wednesday, Mar 21, 18 @ 1:57 pm
@Steve

Why didn’t the Republicans just fund then pensions properly?

Why are Republicans too chicken to go after cops and firefighters pensions?

Comment by Mike Cirrincione Wednesday, Mar 21, 18 @ 2:00 pm
Ask Jim Edgar people seem to love his kicking the can hard.

Comment by Ron Wednesday, Mar 21, 18 @ 2:03 pm
I think the best proxy from yesterday on the “Madigan” argument was Scott Drury. He’s a Democrat and made his opposition to Madigan the centerpiece of his campaign. And it got him 8% of the vote. That’s not to say that Madigan isn’t a factor, but making it the sole issue doesn’t seem to resonate.

Comment by Pundent Wednesday, Mar 21, 18 @ 2:11 pm
I think the elections results show that while Madigan may not be popular, people don’t really care that much about him. Just because someone polls poorly doesn’t mean people are really worked up about the person as an issue. How effective are ads tying congressional D candidates to Pelosi, or a senate R candidates to McConnell? They too are very unpopular, but it doesn’t impact those races at all (not that the ad makers don’t try). How many people will think “I’d really like to vote for this democrat to fight Trump, but I don’t like Pelosi, so I’ll vote for the republican instead.” Same in Illinois. Who is going to think “I want to vote for this D house candidate because I don’t like Rauner, but I don’t like Madigan either so I’ll vote for the R house candidate who will help Rauner.” People in the statehouse may be a bit Madigan obsessed (Rauner certainly is). And I’m sure there are rabid anti-Madigan voters out there too, but I’m also sure they’re solid R voters Madigan or no. As for the less partisan voter, however, Madigan just may not play much of a factor in who they vote for.

Comment by George Wednesday, Mar 21, 18 @ 2:11 pm
==That’s true, but it would give Rauner and the ILGOPs precisely the message they need to hammer the Democrats with. I think it might be better to wait and put this to voters in a Presidential year.==

The Simon Poll found 72% support for such an amendment. I do think those numbers are soft, but I’m not sure they’re soft enough for Rauner to be able to turn it into a winning issue.

Comment by Nacho Wednesday, Mar 21, 18 @ 2:11 pm
Higher state income taxes on top of the fact that some wealthy people will be paying higher federal income taxes after the limiting of SALT. How much higher does JB and Mike Madigan think taxes have to go to pay for public pensions??? Hopefully , Rich can get the exact numbers out of JB so then voters will know what they are on the hook for.

-You mean to tell me the Trump/GOP federal tax plan didn’t reduce your tax burden?

Comment by Real Wednesday, Mar 21, 18 @ 2:16 pm
And to pull a phrase out of OW’s book if I were Pritzker I would continue to say 60/30. Remind the voters that’s what counts and Madigan or no Madigan Rauner has proven he can’t build a consensus for his agenda.

Comment by Pundent Wednesday, Mar 21, 18 @ 2:18 pm
Bruce Rauner is the worst policy governor in Illinois history, for his three years, and just a bad and phony man. He’s been called out multiple times for the state’s results during his term. When it’s time to take responsibility for his governance, he goes into demented spasms of deflection. It’s a good starting place for Pritzker, who has the money to really pound home the message.

The beauty of Pritzker (I did not vote for him) is that he’s a bigger financial fish than Rauner. Rauner thought he could gobble up opponents with money. Now he’s prey to an even bigger fish.

Comment by Grandson of Man Wednesday, Mar 21, 18 @ 3:15 pm
=That’s true, but it would give Rauner and the ILGOPs precisely the message they need to hammer the Democrats with. I think it might be better to wait and put this to voters in a Presidential year.=

So this in the best interest of the state and its residents. Just not in an election year.

Another example of why normal people hate politics.

=The Simon Poll found 72% support for such an amendment.=

So JB could publicly call on the GA to put it on the ballot, lead the crusade. Let the November election serve as a referendum on the concept.

Comment by m Wednesday, Mar 21, 18 @ 3:17 pm
And, Pritzker said, the Madigan card won’t work because voters are “sick and tired of Bruce Rauner.”

If people are so “sick and tired” of Rauner you obviously don’t have to run ads all summer then, right? Asking for a friend.

Comment by OneMan Wednesday, Mar 21, 18 @ 3:18 pm
“Mike Madigan had no problem working with any other Republican Governor.”

And they all speak about their Madigan experiences in such glowing terms./snark

Comment by Louis G. Atsaves Wednesday, Mar 21, 18 @ 3:31 pm
- Real -

Sadly, the facts are for some people in Illinois: the new federal tax code is a tax increase. The Republicans in Washington were looking to hurt the high tax Blue states… Next year this time it will become very apparent that it might be more “challenging” to ask for a state income tax increase on someone paying over 10K in property taxes….

Comment by Steve Wednesday, Mar 21, 18 @ 3:43 pm
Mike Madigan isn’t someone most of us can vote against. And having lived in Ravenswood Manor during the Blago era, I can’t see his constituents lining up to make sure they aren’t the first district to get their streets plowed.

Comment by Cheryl44 Wednesday, Mar 21, 18 @ 4:04 pm
I look forward to hearing more details on JB’s plans for the state income tax structure. If he clearly details how the progressive tax will be applied, specifically the tiers he is proposing, it will be easier to assess support.

I hope I am pleasantly surprised. At this point I don’t see how he can lower taxes on the masses while raising taxes on the 1%. It doesn’t compute for a state with a $150 billion pension problem.

Comment by SSL Wednesday, Mar 21, 18 @ 4:11 pm
Rest assured virtually no one will get a tax reduction. Very thirsty public employee unions will see to that.

Comment by Ron Wednesday, Mar 21, 18 @ 4:32 pm
I have suggested that tax idea, but that was when SALT were deductible. I am not sure how Trump and the Republicans get away with double taxing those dollars.

Comment by A Jack Wednesday, Mar 21, 18 @ 4:41 pm
@Ron Illinois had a low income tax rate for many years while its citizens were still able to enjoy the benefits of many government programs. That was possible in part because of pension money being spent on these various programs instead. The ILSC has ruled that the pensions are a contractual obligation that must be paid. Despite that our politicians continue to drag their feet looking for some wiggle room. There are legal options out there to smooth out the payment schedule but they need to accept the fact the pensions need to be paid and move on.

Comment by Anonymous Wednesday, Mar 21, 18 @ 5:26 pm
==That was possible in part because of pension money being spent on these various programs instead.==

Like salary increases and increased health care benefits for employees.

Comment by City Zen Wednesday, Mar 21, 18 @ 5:36 pm
Ron and City Zen — you do realize that 2/3 of the $130 billion pension underfunding is for non-Chicago primary and secondary school teachers, right? And that state funding for schools exceeds the total pay of state employees, right? So you might be a little more precise than just saying “employees” or “public employees,” and make it clear that you’re including teachers and not just state employees.

Comment by Whatever Wednesday, Mar 21, 18 @ 5:44 pm
Of course teachers are public employees, but why is the state paying for local worker benefits?

Comment by Ron Wednesday, Mar 21, 18 @ 5:57 pm
Time to eliminate those programs I guess.

Comment by Ron Wednesday, Mar 21, 18 @ 5:58 pm
–”Mike Madigan had no problem working with any other Republican Governor.”

And they all speak about their Madigan experiences in such glowing terms./snar–

That’s very important, the glowing terms thing, when it comes American democracy, and separation of powers.

Louis, I know you campaigned for Big Jim, Edgar and Ryan.

Why don’t you check in with those guys and let us now what they think about Rauner as governor.

What do you think, having worked for them all?

Comment by wordslinger Wednesday, Mar 21, 18 @ 6:48 pm
Whatever - If the state fully funded the teacher pensions (compensation of tomorrow), they’ve would’ve had to decrease education funding to the school districts (compensation of today). That difference would’ve been made up by some combination of lower employee compensation and higher property taxes. But wages would’ve been impacted, regardless if the district was rich or poor.

But the same principles apply to any govt entity.

Comment by City Zen Wednesday, Mar 21, 18 @ 7:03 pm
My point was you aren’t (or should not be) talking about “state employees” and implying that all these costs are for unionized state agency employees (and in particular, as the governor and George Will would like you to believe, AFSCME members). AFSCME members are only a fraction of the “public employee” costs.

Comment by Whatever Wednesday, Mar 21, 18 @ 7:38 pm
Whatever - I never claimed “AFSCME” employees were the root cause of anything. Merely pointing out the fact that while pensions were being underfunded - from teacher to policeman to professor to state worker - wages and health care benefits were continually rising. Where did the money come from? Would everyone be happier with a fully funded pension and a compensation package at 1999 levels? Guessing no.

Comment by City Zen Wednesday, Mar 21, 18 @ 8:26 pm
If employee healthcare is soooo expensive. Why is no one asking about the contracts the state negotiates with the public healthcare companies
How much money is ‘donated’ by those companies to ensure their contract
Why are the employees always being deomonizd for the cost of their healthcare. They have a choice as to who gets what contract and how much the agrees to pay
Maybe we should be looking into the bloated costs promised on the front end

Comment by Nick Thursday, Mar 22, 18 @ 6:37 am
Nick, the kleptocracy in action.

Comment by Ron Thursday, Mar 22, 18 @ 8:00 am
===while pensions were being underfunded - from teacher to policeman to professor to state worker - wages and health care benefits were continually rising.===

Thanks for pointing that out CZ, however, what you’re implying is that the cause of those rising benefits is somehow tied to tacit agreement by unions and state workers in general that they were fine with politicians shorting the pensions in order to provide increased wages and benefits.

What you fail to offer is any proof at all of correlation. People’s benefits, wages and healthcare were rising in both the public and private sectors. They do that to remain competitive and attract employees who would otherwise go where there services were valued more highly. Furthermore, workers sued in an attempt to get the state to make its actuarially required payment on a yearly basis, but the ILSC ruled against them. Why would they do that if there were some sweetheart deal between state employee groups and the politicians?

Also, why would these politicians suddenly turn on their sweethearts and promulgate SB1?

Implying cause and effect without proof is standard operating procedure for IPI. You don’t work for them do you? If not, I’d shoot them a resume. You’re just the kind of fairytale-telling guy they’re looking for.

Comment by PublicServant Thursday, Mar 22, 18 @ 8:19 am
Public Servant - You’re not accounting for the variances in a defined benefit vs defined contribution plan. Since my employer has no ongoing pension liability to worry about, they can budget my compensation year-by-year. If my employer provided a defined benefit plan, you can be assured my salary would be lower today if any difficulties arose in funding it. There is only X amount for compensation, so when one aspect increases, it comes at the expense of the others.

The solution is simple. Take existing revenues and budgeted amounts and simply fully fund the pensions first, then fund all other compensation with whatever funds are left. Let’s POC it for a few years. Deal?

Compensation is compensation, whether it’s today’s salary or tomorrow’s pension. That’s math in real life. Perhaps it is you living in dreamland, Ralph Martire presiding…

Comment by City Zen Thursday, Mar 22, 18 @ 8:48 am
City Zen:

Yours is a false choice. If they had funded the pensions at the required level from the beginning the snowball wouldn’t have happened and wages could have also grown, perhaps not at the level they did but they could have grown nonetheless.

I despise people who advocate for lowering salaries unless you want to start with yourself. It’s easier to want it for others right?

Comment by Demoralized Thursday, Mar 22, 18 @ 9:30 am
==You don’t get to choose who the speaker is==

That’s exactly right. And instead of dealing with it the Governor has chosen to constantly whine about it instead of focusing on actually governing.

Comment by Demoralized Thursday, Mar 22, 18 @ 9:34 am
With a defined compensation plan, you’re still paying into social security as an employer CZ, plus whatever you’re contributing to a defined compensation plan. If the pensions weren’t shorted for decades, the normal cost of a defined benefit plan (basically a professionally invested, and insured compensation plan) would provide better benefits for a comparable cost to the employer.

===The solution is simple. Take existing revenues and budgeted amounts and simply fully fund the pensions first, then fund all other compensation with whatever funds are left. Let’s POC it for a few years. Deal?===

If we could disregard decades of pension shorting, I might take you up on that, but that’s fantasy…again.

Comment by PublicServant Thursday, Mar 22, 18 @ 9:37 am