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Harmon on graduated income tax and using “one-time resources to solve one-time problems”

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Illinois

* Question asked of Senate President Don Harmon this week…

Q: You have been arguing for years that Illinois needs a graduated income tax to fix the state’s structural deficit. In fact you sponsored the constitutional amendment that voters rejected last fall. Do you still think Illinois needs a graduated income tax? And if so, when would be the right time to make that argument again?

A: As you said, I sponsored this and worked on it for a long time. I think as a policy matter it’s an important tool. But the message I took from the voters rejection of this proposal was they would like us to go back to the drawing board and make hard decisions about how we spend the money they send to Springfield. So I expect we’re going to be going through that exercise, looking at difficult decisions. But I do not anticipate any sort of a general tax increase, nor do I anticipate quickly to put a fair tax back on the ballot.

* Same essential question for Harmon by a different outlet with a very similar response…

“The lesson I took from the election in 2020 was that the voters aren’t ready for the ‘Fair Tax,’” Harmon said, referring to the drubbing voters gave the proposal last fall. “I still think it’s the right policy, but I’m listening to the voters, and I think they’ve asked us to come down here, sharpen our pencils, and come up with a responsible balanced budget without a general tax increase.”

Case closed, move on.

* Speaking of the budget, Mark Maxwell asked about the federal American Rescue Plan Act…

“We’re reviewing it,” [Harmon] said. “I hope it will provide some one-time resources to solve one-time problems. We still have to look at our structural budget issues.”

“We should not look at this as a windfall,” state senator Julie Morrison (D-Deerfield) cautioned on Monday.

She mimicked some lawmakers might think, ‘Oh, gosh, isn’t this great? Now we don’t have to worry about being thoughtful and creative in our budgeting.’”

“Absolutely the opposite,” she said. “Illinois’ economy, as we know, has got a lot of issues, a lot of long-term problems. We need to not take this as a gift, but just as a break — a pause — so that we can stabilize a little bit.”

* More on that topic from Center Square…

Illinois’ state budget is set to get $7.5 billion.

Comptroller Susana Mendoza said $3 billion of that will pay down short-term borrowing the state took on.

During an Illinois House committee hearing Wednesday, Gov. J.B. Pritzker’s budget director Alexis Sturm said they’ll be evaluating how to spend the money.

“I think most people are interested in the state stabilization dollars, recovery dollars, those we kind of need to wait and see what the funds can be used for,” Sturm said. “Primarily the expectation is that it’s going to be used for necessary expenditures for COVID response, so things that are COVID related. That could be healthcare costs, it could be our direct response. We’ll see what the guidance says from the federal government.”

“They do mention water, sewer and broadband specifically,” she said. “So those do align with projects we have appropriations for in our budget.”

Just, please, pretty please, heed Harmon and don’t create a bunch of new long-term programs with one-time cash infusions that will require the state to find the money to pay for them when the federal money runs dry.

posted by Rich Miller
Thursday, Mar 11, 21 @ 2:19 pm

Comments

IMO. Illinois’ structural problems are not fixable. With or without a progressive tax. It’s going to take thinking so far out of the box that some people might deem it unconstitutional.

Comment by Blue Dog Thursday, Mar 11, 21 @ 2:30 pm
So according to Mendoza. JB borrowed 3 billion from the Fed for general budget spending and now that loan is being forgiven. Good deal. Wish he had borrowed the full 6 the Fed made available

Comment by Sue Thursday, Mar 11, 21 @ 2:34 pm
== Just, please, pretty please, heed Harmon and don’t create a bunch of new long-term programs with one-time cash infusions that will require the state to find the money to pay for them when the federal money runs dry. ==

This. This. A thousand times THIS.

Comment by questions Thursday, Mar 11, 21 @ 2:41 pm
Chicago Alders already proposed using $31 million of its Federal allocation to set up a UBI pilot program. Hopefully the State is smarter with its one-time cash infusion.

Comment by 1st Ward Thursday, Mar 11, 21 @ 2:43 pm
**Chicago Alders already proposed using $31 million of its Federal allocation to set up a UBI pilot program. Hopefully the State is smarter with its one-time cash infusion.**

1) A pilot is, by definition, temporary.
2) A proposal by an alderman or two or three does not mean that the city will do so.

Comment by SaulGoodman Thursday, Mar 11, 21 @ 3:00 pm
==But I do not anticipate any sort of a general tax increase, nor do I anticipate quickly to put a fair tax back on the ballot.==

This statement and similar statements sort of makes the urgency of the fair tax initiative (and the threat of a raised flat tax if the fair tax failed) look specious and almost dishonest in retrospect.

Comment by Responsa Thursday, Mar 11, 21 @ 3:00 pm
Well reasoned and measured comments from Harmon.

The BGA must be furious. How’s David Greising going to raise funds off of that?

Comment by Roman Thursday, Mar 11, 21 @ 3:23 pm
===How’s David Greising going to raise funds off of that?===

He still has the anti-pension guy John Arnold, who contributed $400K in 2019.

Comment by Rich Miller Thursday, Mar 11, 21 @ 3:25 pm
==specious and almost dishonest==

Our politicians? I’m shocked, shocked I say.

Remember how Preckwinkle said that public safety would be at risk unless the Cook county board passed the pop tax? Then after the public outcry, a sensible balanced budget magically appeared. Hopefully our state pols are having a Preckwinkle moment.

Comment by Barn Burner Thursday, Mar 11, 21 @ 3:43 pm
=== Remember how Preckwinkle said that public safety would be at risk unless the Cook county board passed the pop tax? Then after the public outcry, a sensible balanced budget magically appeared.===

- Barn Burner -

I’ll save this for the time you’ll bring up “crime is out of control in Chicago”

:)

Comment by Oswego Willy Thursday, Mar 11, 21 @ 3:45 pm
That’s the wrong lesson to learn from the Fair Tax. The proponents ran an absolutely horrible campaign and the Com Ed - Madigan thing didnt help.

Yes, I’m not saying it should go back on the ballot for 2022 but at the same time it would be a mistake to write it off for the next 10-20 years.

What they should have done was to say the number of states that have a graduated income tax, that this is how the federal govt does it and perhaps tie it to something specific. Then see what the outcome would be.

Comment by low level Thursday, Mar 11, 21 @ 3:52 pm
“Just, please, pretty please, … .”

Would also use that language to ask we don’t do a Pat Quinn and fund new programs from unfilled vacancies. (FY 2015 Budget Presentation showed from FY 2009 until FY 2014, employee headcount dropped 4.3 thousand, or 8% - page 7.)

Comment by Anyone Remember Thursday, Mar 11, 21 @ 4:30 pm
Using the Covid money from the federal government for ANYTHING BUT specific Covid expenses would solidify the argument that the $1.9 Billion bill was not for Covid at all but just a state bailout for poorly managed states.

Comment by LongtimeIllini Thursday, Mar 11, 21 @ 5:40 pm
=== Using the Covid money from the federal government for ANYTHING BUT specific Covid expenses would solidify the argument that the $1.9 Billion bill was not for Covid at all but just a state bailout for poorly managed states.===

Like Kentucky?

Comment by Oswego Willy Thursday, Mar 11, 21 @ 5:48 pm
===would solidify the argument===

Maybe, but we’re in a state that makes out well.

Comment by Rich Miller Thursday, Mar 11, 21 @ 6:58 pm
===Like Kentucky?

Like any State that does it. If a state can’t use it for Covid expenses they should return it. It is not free money. It comes from our grandchildren.

I doubt any politician in this or any state does the right thing. Most are very poor stewards of tax payers money.

Comment by LongtimeIllini Thursday, Mar 11, 21 @ 7:54 pm
=== I doubt any politician in this or any state does the right thing. Most are very poor stewards of tax payers money.===

No one’s on your lawn.

Once the pandemic subsides, you should pick a country that doesn’t have states that you feel don’t meet any standard you deem… acceptable.

I’d start looking at countries…alphabetically

Comment by Oswego Willy Thursday, Mar 11, 21 @ 8:03 pm
==It comes from our grandchildren==.

Yes, and the net loss big states experience by sending more to DC then we get back comes from our grandchildren as well. Even more if you live in a large city or county vis a vis downstate.

Comment by low level Thursday, Mar 11, 21 @ 9:06 pm