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Pritzker on the future

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Illinois

* The governor was interviewed by Jonathan Martin yesterday and was asked about what’s left to do in Illinois…

Well, there’s a lot. If you haven’t lived here in Illinois, and I don’t think you have, then you may not pay attention to the fact that we had decades of financial mismanagement in the state. Decades of challenge with the pensions, with school funding and so on. And it’s had real lasting impact, negative impact on the state.

And so, for over the last six years, we’ve been steadily dealing with that. It’s been good. I mean, we’ve balanced the budget, and we’ve paid a lot of debt down, more than $11 billion at this point of debt. We’ve reduced the impact of the pension liability for people. And so, you know, those are just a few things I’m mentioning…

And to be clear, these are not things that, I mean probably, when I’m done, even if you said Pritzker serves a third term, right, you still have a lot of work to do. And just one thing to put in everybody’s mind, that the school funding issue is a massive issue, because people talk about the high property taxes in the state of Illinois, which is a huge problem, right? We can manage everything else but high property taxes, it’s a local issue, but it’s a schools issue. 70 percent of your property tax bill that comes in the mail is your local schools. And if we’re under-funding, and we are, at the state level, we can only afford what we can afford. Then it’s got to be made up for at the property tax level, at the local level.

Now I’ve gone, we’ve taken this from 24 percent of school funding, which is about half of the rest of the country. The average in the United States of funding from the state for education is about 48percent, 46, seven, 8 percent right? We were at 24 percent state funding. You’ve got to make up for that with property taxes.

So how do you fix that? The state’s got to get in the business of funding education better. We’re now up in the mid-high 30s, and that’s good, but we’re not even average in the United States, right? And you got to get all the locals to stop raising property taxes while you’re funding them, right? Because everybody wants more and more and more money. But at some point, you’ve got to start bringing down the pressure on the upward trajectory of property taxes.

So I’m just giving you an example of a long-term issue. We’re dealing with it, but it isn’t going to be fixed tomorrow or next year. It’s going to take us, like persistence. We’ve got to go after this every single year.

posted by Rich Miller
Wednesday, Aug 21, 24 @ 6:59 am

Comments

“even if you said Pritzker serves a third term”

That makes a third term sound like an unlikely event, as if he is interested in something else after his second term.

Comment by Techie Wednesday, Aug 21, 24 @ 7:48 am
If the state is going to do anything on stopping the upward pressure on property taxes, the first place to state is reforming PTELL. The current law essentially punishing districts if they don’t increase their levy on an annual basis in future years.

Comment by Juice Wednesday, Aug 21, 24 @ 8:33 am
–Because everybody wants more and more and more money–

No lie detected there. It’s exactly why so many of the people of this state don’t want to give massive new taxing abilities to Springfield in the name of funding education. Because we know that the teachers unions will simply take that money and then insist this was only an “important first step on the road” or some similar claptrap, and then continue to raise property taxes.

And of course there is always the real possibility that lawmakers simply redirect the money that was for “education” to other causes, and then turn around and raise taxes again, once more in the name of “education.”

As the governor’s public falling out with the CTU shows, the problem is on his side of the divide, not the other way around.

Comment by JB13 Wednesday, Aug 21, 24 @ 8:55 am
Balancing Illinois Budgets going forward based on current Legislative Spending trajectory, Increased Pension Pressures, Government Union Contract demands with Federal Covid $$ gone is going to be impossible without major tax increases.
Taxing services next year will be the start.

Comment by Don't lose Sight Wednesday, Aug 21, 24 @ 9:12 am
Would that the progressive tax had passed. I still think taxing the rich is the best bet for more income fairly. But alas.

Comment by Mike Gascoigne Wednesday, Aug 21, 24 @ 10:29 am
we will need to generate new revenue. I agree that taxing services would be a way to help fill the void .

Comment by Tinman Wednesday, Aug 21, 24 @ 11:23 am
The easy part is over. Cleaning up the mess from the Rauner years and creating stability are simple tasks compared to increasing growth and attracting biz/people.

The entire electorate has shown the Democratic party multiple times it has ZERO tolerance for new taxes. So if you can’t tax your way out of the fiscal deficit, you will need to grow your way out of it. There are some green shoots, but nothing substantial for Pritzker.

If he does that, he will be well positioned in 2028.

Comment by LPDad Wednesday, Aug 21, 24 @ 11:38 am
There is no denying Illinois finances are better now than they were when the Governor took office. The Governor and Legislature deserve credit for raising income taxes early in this administration. Those receipts, coupled with the increase that went into effect via veto-override in 2017, have helped general funds revenues.

BUT, to the Governor’s point: Exceeding expectations set by Rod Blagojevich -> Pat Quinn -> Bruce Rauner is not exactly where I would set the bar for good fiscal management. There is also no denying the impact of regressing federal support, increased spending obligations, and several can-kicked cliffs now upon us.

= we’ve paid a lot of debt down, more than $11 billion at this point =

Yes, pay off loans to realize long-term savings on interest and debt service. Good, and more, please! It’s an interesting figure, though, because my back-of-envelope tally suggests Illinois received a little more than $10 billion in COVID stimulus.

Tinman is exactly right: service tax time.

= …even if you said Pritzker serves a third term, right, you still have a lot of work to do. =

!!! Plenty to read into this voluntary, not at all clear remark.

Comment by Dirty Red Wednesday, Aug 21, 24 @ 11:52 am
=If the state is going to do anything on stopping the upward pressure on property taxes, the first place to state is reforming PTELL. The current law essentially punishing districts if they don’t increase their levy on an annual basis in future years.=

Almost. I agree with your basic point, PTELL forces district to maintain their tax RATE. That means they must increase the levy (which creates the rate) or lose the ability to capture money when it is really needed. In Cook and the collar counties it is especially true. In rural Illinois PTELL is more of a problem because district cannot catch up with increasing costs at times. Either way, PTELL is an issue.

=The entire electorate has shown the Democratic party=

Not factual. A majority showed them with the graduated income tax though.

=Because we know that the teachers unions will simply take that money=

An inherently ridiculous statement, especially outside of Chicago. Teachers unions cannot “take” the money. How many bargaining sessions with school unions have you been a part of? If had you would know how silly that statement is.

CTU aside, most local associations are fairly reasonable. Everyone wants a pay increase no matter what they do, that isn’t just teachers. I mean bezos and other billionaires have more than they could ever need but still want more. Why shouldn’t a middle class teacher be able to get a raise?

CTU is a bit different because they run the mayors office. How is it that the firefighters cannot get a contract while the city is hosting negotiations with ctu as a televised event? It will ultimately cost them this power they have right now.

Comment by JS Mill Wednesday, Aug 21, 24 @ 12:37 pm
“A majority showed them with the graduated income tax though.”

I think this is only partially true. There are many who don’t trust IL politicians to spend money wisely. But there are also people who were fooled by the tons of money that rich Illinoisians spent on advertising against a progressive income tax, and the pro side of the measure didn’t make a compelling argument.

Comment by Techie Wednesday, Aug 21, 24 @ 4:27 pm
= The easy part is over. =

Friend, we haven’t felt an “easy part” when it comes to Illinois finances since the 2001 recession.

Comment by Dirty Red Wednesday, Aug 21, 24 @ 10:28 pm