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* Click here to watch the speech. Click here to read the speech [fixed link]. Click here to see the proposed budget.
…Adding… This is from the “Budget in Brief”…
Illinois will continue to face structural deficits, including an estimated deficit of $3.2 billion in FY2020
Um, what?
How can a budget be balanced and have an estimated $3.2 billion deficit?
Checking with the administration.
…Adding… The administration claims it closed the $3.2 billion hole. So, apparently what that above passage means is they projected a budget hole and then closed it.
posted by Rich Miller
Wednesday, Feb 20, 19 @ 12:14 pm
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Link is for the inaugural address.
Comment by Anon Wednesday, Feb 20, 19 @ 12:30 pm
The speech link appears to be the inaugural. not the budget
Comment by Joe Bidenopolous Wednesday, Feb 20, 19 @ 12:31 pm
I was so confused lol, what I’m reading is not what I’m hearing.
Comment by Perrid Wednesday, Feb 20, 19 @ 12:33 pm
I’m late to the game — why is everyone wearing red?
Comment by Anonni Wednesday, Feb 20, 19 @ 12:36 pm
Crain’s has full text:
https://www.chicagobusiness.com/government/full-text-pritzkers-budget-address
Comment by Steve Rogers Wednesday, Feb 20, 19 @ 12:38 pm
== I’m late to the game — why is everyone wearing red? ==
It’s for the American Heart Association’s Go Red For Women campaign.
Comment by Anonymous Wednesday, Feb 20, 19 @ 12:39 pm
==I’m late to the game — why is everyone wearing red?–
Don’t you watch TV? Everyone’s a Bolshevik now.
Comment by wordslinger Wednesday, Feb 20, 19 @ 12:40 pm
Is there another link besides the Crains link?
I was with a customer and missed the first part of the speech.
Comment by Honeybear Wednesday, Feb 20, 19 @ 12:41 pm
Higher Ed budget increased by 5% from FY2019. This is good, but not great.
Comment by Scamp640 Wednesday, Feb 20, 19 @ 12:46 pm
Wow, who knew that closing the budget gap would be this easy?? (that said, I still liked the speech)
Comment by Hyde Parker Wednesday, Feb 20, 19 @ 12:52 pm
$3.2 billion deficit closed by a whole bunch of non-existent revenue and a pension holiday.
Cue. The. Outrage.
Comment by Phenomynous Wednesday, Feb 20, 19 @ 12:52 pm
Open thread. Can we appropriate some cash to the Blackhawks so we can go back to their old unis and get rid of these awful black jerseys.
Comment by Blue Dog Dem Wednesday, Feb 20, 19 @ 12:57 pm
Liked the reference to Governor Horner. Puts our current problems in perspective. Like the man who complained he had no shoes till he met the man who had no feet.
As a state we have faced worse. Will we rise to the challenge?
Comment by Last Bull Moose Wednesday, Feb 20, 19 @ 12:58 pm
Phenomynous - there was some talk of new taxes. Give us a second to look at the figures.
Comment by Perrid Wednesday, Feb 20, 19 @ 12:58 pm
Good on Pritzker to say he’ll really pursue a graduated income tax. Should it get on the ballot, it could be a big theme in 2020, as national Democrats are talking about taxing the rich more. National debt and deficits and Illinois’ fiscal problems are calling for the wealthy to pay more—not to mention extreme income disparity that needs to be reduced.
Good also to mention marijuana legalization, and the fact that people are using now, as in prohibition is an utter failure.
Comment by Grandson of Man Wednesday, Feb 20, 19 @ 12:59 pm
Where is JRTC? Sale before July? No more sale?
Comment by Anonymous Wednesday, Feb 20, 19 @ 12:59 pm
I appreciate his three scenarios laid out. One did not work, two is not working. Three fixes the problems. Let’s get a fair tax system.
Comment by Kayak Wednesday, Feb 20, 19 @ 1:02 pm
@Anonymous, JB said he still wants to sell the center but it is NOT counted on in the budget. That’s from a statement weeks ago, I haven’t gone over all of the docs from today
Comment by Perrid Wednesday, Feb 20, 19 @ 1:03 pm
B.S. They are just hoping nobody noticed that “balanced” doesn’t actually mean “balanced.”
Comment by Token Conservative Wednesday, Feb 20, 19 @ 1:03 pm
Tell me that I’m wrong in fearing that the budget has too many anticipated revenue items, i.e. gambling, weed …
Comment by Norseman Wednesday, Feb 20, 19 @ 1:05 pm
I forgot how it feels to like and trust a Governor in Illinois.
Comment by West Sider Wednesday, Feb 20, 19 @ 1:08 pm
Pension holiday…nothing is balanced.
Comment by Utopia Watch Wednesday, Feb 20, 19 @ 1:09 pm
Westsider. Like. I understand. Trust? Years have taught me seeing is believing.
Comment by Blue Dog Dem Wednesday, Feb 20, 19 @ 1:11 pm
JB’s progressive income tax table is so important we can’t know yet. It’s a secret.
Comment by Steve Wednesday, Feb 20, 19 @ 1:12 pm
To the speech,
The speech was well done, they should be pleased.
They put a marker out there, made a case to where they are “right now”, the challenges of revenue, and that not all things are pleasing, and the road is a long one.
The numbers, the where and how, the what and how much, a budget itself is the speech, but with numbers, and those numbers, all numbers, aren’t poetic, but static.
I’m sure the digging into how the numbers work with the speech…
…it’s music and lyrics… and can the song work.
Today was a good day for the governor. Can the song play is for these next tomorrows.
Comment by Oswego Willy Wednesday, Feb 20, 19 @ 1:16 pm
Steve, come on now. Rates change, they always change, we could technically amend the constitution to allow for a progressive income tax and then have one income bracket and keep the tax the exact same. You aren’t going to be voting for rates, if and when an amendment gets to the voting booth, you are going to vote on whether or not you want rich people to continue to hold poor people hostage in regards to the income tax.
Comment by Perrid Wednesday, Feb 20, 19 @ 1:19 pm
At 1 billion a year reduction that happens in every year until 2045, this is the biggest pension holiday that has been proposed by a Governor since 1995. Numbers run by Rauner’s actuaries on this back in 2018 showed costs in excess of $150 billion for this proposal.
Comment by Polpen Wednesday, Feb 20, 19 @ 1:19 pm
He came across as someone who really cares about the State of Illinois. That is a good start after the last four years.
Comment by Retired Educator Wednesday, Feb 20, 19 @ 1:23 pm
I don’t understand where he is getting 3.2 B plus the extra 1 B for additional services for a total of 4.2B. Only proposed a few B at best in new Rev and most of that won’t Abe avail this year.
Comment by Anonymous Wednesday, Feb 20, 19 @ 1:24 pm
==Rates change, they always change==
Usually they first manifest themselves in some physical form.
Comment by City Zen Wednesday, Feb 20, 19 @ 1:24 pm
- Perrid -
Hostage? The upper 20% of Illinois state income taxpayers already pay 65% of all income tax revenue. How much more do you expect them to pay?
Comment by Steve Wednesday, Feb 20, 19 @ 1:25 pm
Can they get weed and sports betting legalized in time to see revenue in FY2020?
Comment by Mary Wednesday, Feb 20, 19 @ 1:25 pm
We are going to need some text for SB7 if we are going to collect the $170 million in revenue. I am guessing this is a half year estimate based upon a calendar year effective date?
Comment by Al Wednesday, Feb 20, 19 @ 1:27 pm
We are going to need some text to SB7 if we are going to collect $170 million in Cannabis revenue. I am guessing this is a half year estimate based upon an expected effective date of January 1, 2020?
Comment by Anonymous Wednesday, Feb 20, 19 @ 1:29 pm
The speech was quite substantive but clear and compelling and heartfelt. Some simple answers to how we can act now and what will happen over the next couple of years.
Comment by Amalia Wednesday, Feb 20, 19 @ 1:30 pm
I miss Lisa Madigan offering Bruce a printed copy of his own speech, which he then can’t read because he forgot his glasses.
Memories …
Comment by Michelle Flaherty Wednesday, Feb 20, 19 @ 1:30 pm
I just saw the interview with Durkin. He brought up Cullerton’s old consideration model as a possible pension idea and said that he thought the court would approve it.
When it was mentioned that Pritzker was inheriting a deficit from the previous administration he replied that all those unbalanced Rauner deficits were the fault of Democrats.
I hope I’m wrong but I don’t see much cooperation from Durkin’s caucus. He also had to throw in that only 5% of Illinois citizens benefit from the pension system.
Comment by The Dude Abides Wednesday, Feb 20, 19 @ 1:37 pm
@Steve - You might want to listen to and/or read the speech.
“My office intends to immediately begin negotiations over proposed fair
tax rates with leaders from the House and Senate. Conversations and
debate about rate structures and how much revenue we need to raise are
appropriate. I expect different opinions and viewpoints over the best
way to achieve an equitable tax system, and I sincerely welcome that
conversation. I have already asked a few legislators who oppose the fair
tax to offer their best ideas to improve it, and I am confident they will
come to the table in good faith.”
Comment by Pundent Wednesday, Feb 20, 19 @ 1:43 pm
Illinois
• Top 1 percent earn at least: $456,377
• Avg. income of top 1 percent: $1,412,024
• Avg. income of bottom 99 percent: $52,216
• Adults with a bachelor’s degree: 34.0 percent
Comment by Enviro Wednesday, Feb 20, 19 @ 1:47 pm
I would love to hear Schnorf’s take (sigh). Overall I liked it all except pension re-ramp.
Comment by Former Merit Comp Wednesday, Feb 20, 19 @ 1:48 pm
It is entirely fair and reasonable to expect those making $1.4 million and even $456,000 to pay a higher percent of their income then those making $52,000.
Comment by Enviro Wednesday, Feb 20, 19 @ 1:53 pm
== He brought up Cullerton’s old consideration model as a possible pension idea and said that he thought the court would approve it. ==
Culletton’s ORIGINAL voluntary consideration plan (that included keep what you have) would have been constitutional. The IL SC, in the SB-1 pension decision, hinted at consideration being a legal possiblity.
But once it was modified to a forced diminishment choice for Rauner, it would not have been constitutional.
Comment by RNUG Wednesday, Feb 20, 19 @ 1:57 pm
With the federal Salt cap in place all the progressive tax is going to do is drive more of the top earners to surrounding states.
New York state is seeing this now.
High tax states are finding that just raising taxes higher is more penal now because of salt.
Wait until people do their taxes this April and see it for themselves.
Comment by Anon Wednesday, Feb 20, 19 @ 2:00 pm
As I have commented ad infimum, extending the ramp will cost more in the long run. And that going beyond 7 years hits the point if diminishing returns.
Not real happy with the ramp reset; it’s just kicking the can down the road and ensures we’ll be back talking about this again in 5 to 10 years … sooner if a recession hits because this was the only safety valve left in the State’s toolbox in case of a recession.
Comment by RNUG Wednesday, Feb 20, 19 @ 2:01 pm
Rnug-
This state will be borderline ungovernable in the event of a recession.
If we get one in the next 2 years it makes the progressive tax a much tougher sell to implement as well as the effect it will have on state revenues.
Couple that with the changes to Salt at the federal level and it will make a toxic stew for this state.
I wonder if JB would have been elected had he been up front with voters last year that his grand plan was a big kick of the can rather than trying to do something substantive to solve the problem.
Comment by Anon Wednesday, Feb 20, 19 @ 2:09 pm
I would like to know the composition of the top 1%, 10%, 20%, etc. What is their mix of income among earned income, unearned income (dividends, interest, capital gains)?
This goes to the question of mobility. Most earned income people are tied to the location. Unearned income is more mobile.
Years ago Connecticut had no income tax on earned income but a 10% rate on unearned income. I knew many people who retired and then spent 6 months and a day in Florida.
Comment by Last Bull Moose Wednesday, Feb 20, 19 @ 2:31 pm
Dude Abides, is the 5% number incorrect? For certain very few people benefit from the state pensions.
Comment by Anonymous Wednesday, Feb 20, 19 @ 2:54 pm
Environment, median family income in Illinois is $80,000.
Comment by Anonymous Wednesday, Feb 20, 19 @ 2:54 pm
to close a 3.2B deficit you have have a combination of revenue increases and spending decreases of 3.2B - don’t see it
Comment by Anonymous Wednesday, Feb 20, 19 @ 2:55 pm
“Hostage? The upper 20% of Illinois state income taxpayers already pay 65% of all income tax revenue. How much more do you expect them to pay?”
According to one analysis, the top 20% in Illinois pay less SALT than the bottom 80%. The top 1% pay almost half less than the bottom 20%.
Someone making tens/hundreds of millions to a billion or more dollars a year being taxed at the same state income tax rate as someone making $60,000 is wrong. In the context of the former governor, whose income skyrocketed while holding the budget hostage and trying to severely cut state workers is downright immoral.
Comment by Grandson of Man Wednesday, Feb 20, 19 @ 3:20 pm
“Hostage? The upper 20% of Illinois state income taxpayers already pay 65% of all income tax revenue. How much more do you expect them to pay?”
Riddle me this: “How many steaks can you eat?” A good life doesn’t require millions of dollars of income a year, or even hundreds of thousands, they can afford to fork over more. People working 2 jobs to put food on the table (that is most assuredly NOT steak) can’t.
Comment by Perrid Wednesday, Feb 20, 19 @ 3:28 pm
-Last Bull Moose-
This doesn’t totally answer your question but gives part of it.
Reposting from another thread today with typos fixed and updated:
Latest available report is 2016.
AGI - # returns - income tax revenue
0-25k - 1.96m returns - $0.56b paid
25k-50k - 1.28m returns - $1.31b paid
50k-100k - 1.33m returns - $2.68b paid
100k-500k - 1.04m returns - $5.47b paid
500k-more : 0.06m returns - $2.96b paid
All numbers rounded.
Source: 2016 Final report PDF format
https://tinyurl.com/y5jpmp7q
Comment by RNUG Wednesday, Feb 20, 19 @ 3:32 pm
– only safety valve –
RNUG, you’re forgetting about 700+ dedicated funds, all dying to be swept into GRF. They’ve served as the state’s rainy-day funds forever.
—This state will be borderline ungovernable in the event of a recession.–
Yeah, yeah, yeah, dogs and cats sleeping together….
Cowboy up, dude.
Comment by wordslinger Wednesday, Feb 20, 19 @ 3:33 pm
Lol, how many Illinoisans make 100s of 1,000,000s to billions?
Comment by Anonymous Wednesday, Feb 20, 19 @ 4:33 pm
JB is coming for your money. It won’t be pretty.
Comment by Anonymous Wednesday, Feb 20, 19 @ 4:34 pm
Thanks RNUG. The question is how mobile those top 60,000 are. At least the pro athletes cannot move.
Comment by Last Bull Moose Wednesday, Feb 20, 19 @ 4:46 pm
–Thanks RNUG. The question is how mobile those top 60,000 are–
The question is, if you’re making $500K-plus in a location, why would you leave? Doesn’t it make more sense that poor and young people leave — as we see in Chicago and rural Illinois — looking for better opportunities?
A couple of reports and links on the book, “The Myth of Millionaire Tax Flight: How Place Still Matters to the Rich:”
–Young’s research, based on 13 years of tax data for every U.S. millionaire, says the opposite is more accurate. Only about 2.5% of millionaires moved to new states each year, and not all went to lower-tax states.
One reason is that millionaires tend to be older people with deep roots in their communities. They have family and business ties. They like living where they do.
Yet clearly, somebody has been moving. Who is it?
Answer: mostly young people, particularly recent college graduates. They are four times as likely as millionaires to move in any given year, and taxes aren’t the reason. They follow jobs and educational opportunities.–
That rates a “doy,” does it not?
See the chart in the second link: the poorest of poor are twice as likely to move out of state as millionaires.
Isn’t that common sense? If you’re poor, why stay? If you’re making millions, why leave?
https://www.forbes.com/sites/patrickwwatson/2018/05/10/high-taxes-dont-make-rich-people-move/#30a9e0a225e3
https://www.theguardian.com/inequality/2017/nov/20/if-you-tax-the-rich-they-wont-leave-us-data-contradicts-millionaires-threats
Comment by wordslinger Wednesday, Feb 20, 19 @ 5:11 pm
Not quite a pension holiday. More of a short work day. Not a good thing, but not as bad as previous pension holidays.
Comment by DuPage Wednesday, Feb 20, 19 @ 5:16 pm
About five times a day, I see Rep. McSweeney going off on the twitter feed here about how he wants to cut incomes taxes, cut property taxes and cut spending.
One thing I haven’t seen: Has he ever advanced how he would pay for the public schools in his Barrington area district?
Is he under the impression that his constituents would sit still for radical, massive cuts in public school offerings, opportunities and facilities for their children?
Does that sound like the Barrington Way to you?
Comment by wordslinger Wednesday, Feb 20, 19 @ 5:23 pm
–Lol, how many Illinoisans make 100s of 1,000,000s to billions?–
The ones bankrolling Daley and Baise’s dark-money anti-graduated-tax front.
Comment by wordslinger Wednesday, Feb 20, 19 @ 5:32 pm
In the Budget Brief the following statement appears on the page discussing pensions:
“However, the impact of recessions on asset values and changes to the systems’ actuarial assumptions led to a steeper ramp in payments - even with the addition of Tier 2.”
The total increase in the unfunded liabilities of the pension funds since the initiation of the ramp in FY1996 is about $115 billion. Changes in assumptions accounted for $32.25 billion while investment returns accounted for $13.56 billion. Together they are responsible for $45.81 billion or about 40% of the increase. Not mentioned is the 44% of the increase due to insufficient State contributions. And they are proposing skipping payments. They also propose dumping $2 billion from POB into the funds.
Back in FY2006 and FY 2007 the State skipped payments to the pension funds.
In FY2018, $2.16 was missing in SURS pension fund for each $1 skipped in 2006. Another $1.83 was missing for each $1 skipped in 2007 for a total loss of $3.99. The totals for TRS and SERS were $3.80 and $3.65, respectively. The total amount missing from the three pension funds was $4.324 billion. Dumping $2 billion from new POB won’t pay half of the missing money. Meanwhile, skipping $800 million a year in payments will ….do what?
Comment by CapnCrunch Wednesday, Feb 20, 19 @ 7:47 pm
I’m just happy to hear the leader of our state pronounce all of the ‘g’ sounds at the end of the words.
Comment by Blago's Hare Wednesday, Feb 20, 19 @ 9:18 pm
What does the Gov think will happen when he imposes a 390 million dollar tax on insurance companies doing business in the state? I’m pretty sure they will immediately raise the premiums of all policyholders by, um, 390 million dollars or so. For someone who claims to not like regressive taxes…he’s not exactly walking the walk here.
Comment by Stuntman Bob's Brother Wednesday, Feb 20, 19 @ 11:41 pm
@Stuntman Bob’s Brother, the MCOs won’t be paying the full $390 million. Some of it will be matching federal dollars, don’t know what percentage though.
Comment by Perrid Thursday, Feb 21, 19 @ 8:26 am