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* The Tribune took a look Sunday at something we discussed last week, the cash-strapped state child care program…
The Department of Human Services announced recently that it’s short nearly $300 million needed to pay for the day care program through June — the end of the budget year — and payments will be late starting this month.
Funding hiccups are nothing new to providers, who have become skilled at raising alarms to try to force action in Springfield. But this time is different, some say, because of the uncertainty about the new governor — a Republican who has declared that solving the state’s money problems will require “sacrifice” from all Illinoisans.
“Every year we go through something, but we’re able to rally and say this is important, and then the funding comes,” said Grace Araya, director of Eyes on the Future Child Development Center in Rogers Park. “We don’t really know where we stand. We don’t know which way this will go.”
* The governor was asked about the shortfall the other day…
When pressed by a reporter to explain what he’ll do to fix it, he responded: “Working closely, working closely with the General Assembly, we are going to make sure that we do the reallocations necessary to make sure the essential services of government stay open and functioning.”
* Charlie Wheeler looks at the budget problems facing the state and concludes…
The math is unforgiving — all the rest of state government could be zero-funded next year, and Rauner still would have to cut from education and/or health care/human services. That obviously won’t happen, so be prepared for the deepest cuts — ever — in the public’s most-cherished programs in the proposal.
* Greg Hinz has a bit of background on the state’s new Chief Financial Officer Donna Arduin…
(W)riting with Laffer for the Texas Public Policy Foundation in 2011, Arduin proposed to abolish that state’s defined-benefit pension, even though the state’s retirement systems were better than 90 percent funded. Such systems effectively create “a government entitlement program,” she wrote. “Entitlement programs violate the criteria of sound budgeting principles.” […]
Or, back to the first foundation piece, this little quip: “The longer tenure for public sector employees is related to the compensation package they receive. The government compensation package is designed to reward risk-averse behavior that keeps employees in the government sector and discourages people from transitioning between the public and private sectors.”
One more: As California finance director, Arduin persuaded Schwarzenegger to propose a spending cap. After budget cuts, the cap would limit spending hikes to “a rate equaling population growth plus the increase in per capita income,” as reported by the Sacramento Bee. […]
Reviewing her track record in Florida, the Bee also reported, “Bush and Arduin whacked health insurance for low-income Florida children and health services for adults, cut funding for higher education . . . and enacted an austerity budget for K-12 schools that, despite nominal increases, won’t cover schools’ higher costs.”
* You can certainly see Arduin’s hand in shapingsome of the governor’s budgetary “facts,” which are examined by the AP…
Rauner said Medicaid spending is “booming” and “unsustainable.” He showed a slide comparing a recent three-year rise in Medicaid spending to relatively flat Illinois population growth. […]
First, Washington paid for most of that increase. To improve access for the poor, the nation’s new health law expanded Medicaid eligibility and increased rates for primary care doctors treating low-income patients. The federal government paid the entire cost of covering more than 536,000 Illinois adults who previously had no insurance and wound up as charity care cases when they got sick.
Second, Illinois spends less per Medicaid enrollee than the national average and less per enrollee than any of its neighboring states. In 2011, the most recent year available, Illinois ranked 47th in Medicaid spending per enrollee, according to the Kaiser Family Foundation. Only California, Alabama, Georgia and Nevada spent less.
Rauner spokesman Lance Trover said Rauner’s point was to highlight that job growth hasn’t kept up with spending pressures.
“It’s not a sustainable trend line — regardless of the amount of federal dollars,” Trover said
* Meanwhile…
Under fire for the high salaries he is paying members of his inner circle, Gov. Bruce Rauner said Friday the overall cost of running the governor’s office will be less than it was under former Gov. Pat Quinn.
But a review of records shows the political newcomer may be trying to keep his office costs lower by placing some of his top aides on the payrolls of other state agencies.
According to data supplied by the Illinois Comptroller’s Office, one-quarter of the more than 40 people Rauner announced as members of his administrative team don’t technically work for the governor’s office.
Take Randy Pollard as an example. In a news release issued Jan. 10 by Rauner, Pollard was named as the governor’s downstate director. But records show the former prison worker from Vandalia is being paid out of the payroll of the Illinois Department of Natural Resources.
That’s the usual way of doing things in Springfield, so it’s not a surprise, except Rauner said he wouldn’t do things the usual way.
* Here’s CFO Arduin with then-Gov. Arnold Schwartzenegger…
Caption?
* Related…
* Could Rauner’s Spending Hold Derail New Train Routes?
* Finke: Rauner pension slide slides over some details
* Report: Illinois paid over $1.8 million for medical pot program
posted by Rich Miller
Monday, Feb 2, 15 @ 10:05 am
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I’m moving all of my retirement investments into MAGIC BEANS futures. We’re going to see a huge run on MAGIC BEANS this spring.
Comment by The Captain Monday, Feb 2, 15 @ 10:13 am
==The government compensation package is designed to reward risk-averse behavior that keeps employees in the government sector and discourages people from transitioning between the public and private sectors.==
So basically she doesn’t value or respect long term public sector workers. Dope.
==Such systems effectively create “a government entitlement program,”==
Public employee pensions are entitlements. I see. Aren’t all retirement plans “entitlements.” You work for them, pay into them, and then are entitled to get them? Double-dope.
Comment by Demoralized Monday, Feb 2, 15 @ 10:13 am
Donna don’t look back, we have to get to the chopper.
Comment by 36th Warder Monday, Feb 2, 15 @ 10:14 am
Sounds like a real hatchet-woman. Like a Lizzie Borden of state government.
Comment by DuPage Monday, Feb 2, 15 @ 10:15 am
One other thought. Why does a lady who clearly has an incredible amount of hatred towards government want to work for the government? She seems to troll around the country a lot working for those governments that she loves to demonize and hate doesn’t she?
Comment by Demoralized Monday, Feb 2, 15 @ 10:15 am
An actor who played the role of a soulless cyborg meets the real deal.
Comment by Gooner Monday, Feb 2, 15 @ 10:16 am
++The government compensation package is designed to reward risk-averse behavior that keeps employees in the government sector and discourages people from transitioning between the public and private sectors.++
How long has she been in the public sector receiving six-figures again? Triple-Dope.
Comment by Dee Lay Monday, Feb 2, 15 @ 10:17 am
Randy Pollard collects one of those Rauner criticized pensions and then gets hired for another state job and is paid through an agency other than the Governors office? Yep….looks like things have really changed .
Comment by Downstate Democrat Monday, Feb 2, 15 @ 10:18 am
It seems that in her mind, public service workers at all levels, don’t actually work or produce anything of much value. They’re a drain on society, and therefore should not earn anything.
That’s a real departure from reality. Thankfully there are others around her not so extreme.
And I thought Rauner’s fake charts and numbers were coming from IPI.
Comment by walker Monday, Feb 2, 15 @ 10:26 am
Waiting for that list of Rauner leadership team members refusing their taxpayer funded health care and retirement benefits.
Yep, still waiting.
Comment by Juvenal Monday, Feb 2, 15 @ 10:27 am
The best, BTW, was Rauner on the radio this am still claiming that the state finances are somehow worse that everyone has been saying for the last five years.
Comment by Juvenal Monday, Feb 2, 15 @ 10:29 am
Show ‘em the ferret. That will get them to calm down.
Comment by A guy Monday, Feb 2, 15 @ 10:29 am
***W)riting with Laffer for the Texas Public Policy Foundation in 2011, Arduin proposed to abolish that state’s defined-benefit pension, even though the state’s retirement systems were better than 90 percent funded. Such systems effectively create “a government entitlement program,” she wrote. “Entitlement programs violate the criteria of sound budgeting principles.” […]***
Ninety percent pension funding is not “sound budgeting principles?”
***“It’s not a sustainable trend line — regardless of the amount of federal dollars,” Trover said***
More nonsense from the trickle down bubble. It’s not sustainable just because we say so.
Quadruple-dope!
Comment by Grandson of Man Monday, Feb 2, 15 @ 10:29 am
Entitlement - noun - the fact of having a right to something.
They keep using the word like it’s a bad thing.
Comment by Big West Monday, Feb 2, 15 @ 10:30 am
Is a paycheck an entitlement? Maybe she should not accept hers if she believes this kind of clap trap.
Comment by illlinifan Monday, Feb 2, 15 @ 10:37 am
Regardless of what they want, they will still be paying for an entitlement program or two (if the go 401k they will also pay SSI). The alternative is to eliminate all state employees except those in the governor’s office..err DNR, oops..I meant food and beverage director.
I love the fun with numbers though. If you take it far enough the governor’s office staff will cost zero. But, the payroll at the DNR will triple..that is how he can say he is spending more on the DNR. Ta Daaa!
Comment by JS Mill Monday, Feb 2, 15 @ 10:39 am
The Terminator meets Arnold Schwarzenegger.
Comment by Stones Monday, Feb 2, 15 @ 10:39 am
What I love most about Donna Arduin’s radical craziness is that little gem: “Entitlement programs violate the criteria of sound budgeting principles.” There are so many things wrong about that statement that I don’t think I can hit all the errors, but let’s try. First, the construction of this little gem is completely wrong, since she correlates “criteria” with “principles” — kind of like, “Fatty foods violate the rules of sound dieting rules.” In other words, she strings buzzwords together in the hope that she sounds convincing. Second, the spews the gem so matter-of-factly, little recognizing that it’s really a postulate disguised as thoughtful factual conclusion. Third, you can scrub the rules of government accounting and find no support for the contention that there are “rules” or “criteria” supporting the notion that “entitlements” (including Social Security and Medicare) are bad. This woman is nothing but an ignorant crazy person.
Comment by ChiTown Seven Monday, Feb 2, 15 @ 10:40 am
“Entitlement programs violate the criteria of sound budgeting principles.” […]
Apparently state government should be run differently than a business. Governments are trying to help people, not make money off them. But what’s the problem? Like all unknowns, entitlement programs or earned pensions can be estimated for budget purposes.
Comment by Dan Bureaucrat Monday, Feb 2, 15 @ 10:40 am
Arduin certainly didn’t write the slide that talked about compassion.
Comment by Norseman Monday, Feb 2, 15 @ 10:43 am
Big West….seems Republicans have been using the word entitlement as something bad for several years.
Along with Juvenal, I don’t seem to have read anywhere lately where they are refusing “their entitlements” of pension and health care. I’m sure there might be someone, somewhere that has, but I haven’t seen it.
Rauner did refuse his salary, but a rough calculation shows he makes that much in one day in the “private sector.” Nice gesture, but not too much of a financial hit for him in the grand scheme of things.
Comment by Finally Out (formerly Ready to Get Out) Monday, Feb 2, 15 @ 10:49 am
Another problem with Arduin is that she uses jargon and buzzwords to obfuscate the fact that her budget numbers, analysis, and projections are just BAD. Here’s a report on a fast one that she tried to pull in Florida:
http://extra.heraldtribune.com/2014/01/24/arduin-story/
Comment by ChiTown Seven Monday, Feb 2, 15 @ 10:50 am
Is Arduin the one that is going to explain how the Gov is going to freeze my property taxes, and increase spending at my grandson’s school in Will County??
Comment by Not Rich Monday, Feb 2, 15 @ 10:53 am
Caption. Arnold: “We need to dress up as Valeria and Conan the Barbarian to lobby for our budget cuts!”
Comment by Serious Note Monday, Feb 2, 15 @ 11:02 am
===Rauner’s point was to highlight that job growth hasn’t kept up with spending pressures.
“It’s not a sustainable trend line — regardless of the amount of federal dollars,” Trover said.===
That could be a reasonable argument, if it were about taxable income and sales growth versus government expenses. Actually individual incomes have been rising much faster than government expenses, at the top ends of the income scale, but for some reason that reality is never acknowledged.
Comment by walker Monday, Feb 2, 15 @ 11:05 am
i have taken graduate classes in public finance and budgeting, but i am having a tough time with the rauner principles.
we cant fund child care, bec or until the net outmigration of population is reversed?
we cant pay medicaid bills until employment goes up? by how much?
state employees are “risk-averse” to taking real jobs, like in the private sector. we need to make their jobs miserable, to move them out before they start making too much. in other words, if you work for government, you are a second class citizen afraid to do something meaningful, like consulting on how to cut jobs and services.
that slide comparing employee contributions to payout is bunk. someone working 26 years would get 43.42% (26 years times 1.67%) of his average 38,979 salary, for a luxurious retirement of $16,924 per year. to reach a payout of $821,580, he would have to collect an average of $41,079 per year. its a long way from $16.9k to $41k (magic colas?). the slide was credited to SERS. they should explain.
Comment by langhorne Monday, Feb 2, 15 @ 11:12 am
“Get to the chopper!”
Comment by Tommydanger Monday, Feb 2, 15 @ 11:13 am
You may love my numbers and cold heart but I am not your maid, Arnold.
Comment by Anonymous Monday, Feb 2, 15 @ 11:14 am
Did you just tell all of those people to “get a job?”
Comment by Demoralized Monday, Feb 2, 15 @ 11:27 am
He got paid Friday. What’s he doing with the money?
Rauner did refuse his salary, but a rough calculation shows he makes that much in one day in the “private sector.” Nice gesture, but not too much of a financial hit for him in the grand scheme of things.
Comment by Anon Monday, Feb 2, 15 @ 11:27 am
“A cold, heartless machine dedicated to destroying human lives meets with the Terminator.”
Comment by jerry 101 Monday, Feb 2, 15 @ 11:31 am
Photo caption:
Arnold: I just read your bogus economic reports for Florida. I see we share a love of science fiction.
Comment by Monday morning Monday, Feb 2, 15 @ 11:34 am
Langhorne-
“of his average 38,979 salary,”
This is the problem with the slide- they fudge by saying “CAREER average salary” of $38,979. Which I read as ‘career average earnings over 26 years’. But that isn’t what SERS calculates on, (that’s more like the average of the last few years) and it hides what the employee was likely making when they retired, something like 75-85k?
Comment by Shark Sandwich Monday, Feb 2, 15 @ 11:34 am
Did you bring your witches outfit from Florida?
Comment by Anonymous Monday, Feb 2, 15 @ 11:39 am
Stop demonizing this person.
If she is as ridiculous as she has been presented, she doesn’t need to be given any more attention than she has already had.
She is here because voters fired Pat Quinn. Pat Quinn’s administration failed not only with voters, but also with his own party’s leadership.
We shouldn’t politicize her. You take a person like her down with cold insufferable data. She lives like that, so you have to beat her at her own game. Demonizing doesn’t work for people who don’t play the political game.
Comment by VanillaMan Monday, Feb 2, 15 @ 11:39 am
I’d like to see an enterprising journalist ask Arduin how she views Rauner’s proposal to tax certain services.
Comment by The Doc Monday, Feb 2, 15 @ 11:43 am
Vanilla,
People elected Rauner because he promised competence, and he then went and hired a person with a proven track record of incompetence.
She’s not good at what she does. The states where she has worked have done poorly.
Like it or not but when you hire people with terrible records, that becomes part of the story.
Comment by Gooner Monday, Feb 2, 15 @ 11:43 am
’stop demonizing this person”
The problem is she is in a position of power and has the potential to seriously impact many persons lives, so the attention she gets is less important than the impact she could have. She is political by virtue of the job she has accepted. Data is what drives her, the problem is her source of her data and her interpretation of the data.
Yes she is out and Quinn was fired and minority of the voting public went and elected an unknown factor. We have to live with that, but the impact could be devastating to many vulnerable persons in this state, as well as many of the working public.
Comment by illlinifan Monday, Feb 2, 15 @ 11:46 am
=== how she views Rauner’s proposal to tax certain services. ===
She’s historically praised consumption taxes.
Perhaps not coincidentally, those consumption taxes hit lower and middle income folks much harder than those at the top.
Comment by Rich Miller Monday, Feb 2, 15 @ 11:51 am
===According to data supplied by the Illinois Comptroller’s Office, one-quarter of the more than 40 people Rauner announced as members of his administrative team don’t technically work for the governor’s office.
He must have talked to his friend Rahm about how to “efficiently” allocate staff.
Comment by Urban Girl Monday, Feb 2, 15 @ 12:00 pm
==Rauner spokesman Lance Trover said Rauner’s point was to highlight that job growth hasn’t kept up with spending pressures.==
This has what to do with Illinois have low Medicaid spending per enrollee?
==We shouldn’t politicize her.==
L. O. L.
Comment by Precinct Captain Monday, Feb 2, 15 @ 12:05 pm
Laffer (appropriate synonym) had an op-ed in the WSJ a couple of days ago in which he praised the economic environment of Gov. Walker’s low-tax Wisconsin vs. that of high-tax Illinois.
He also wrote that Gov. Rauner was fixing to roll back some of that temporary income tax the Democrats passed a few years back.
I kid you not. Laffer the “expert” wrote that stuff, and the WSJ edit board printed it.
Comment by Wordslinger Monday, Feb 2, 15 @ 12:07 pm
Political language lesson: Entitlements = welfare = those people….
Comment by DuPage Dave Monday, Feb 2, 15 @ 12:08 pm
The Herald Tribune piece certainly makes Arduin sound like a high-priced con artist. Not a good sign at all.
Comment by kimocat Monday, Feb 2, 15 @ 12:13 pm
My eye’s up here.
Comment by Anonymous Monday, Feb 2, 15 @ 12:21 pm
By the way, the cable analogy works very well.
Many condo associations and home owners associations provide cable service and internet service to all unit owners with the cost passed on to unit owners.
Unit owners who do not want the services cannot opt out. If they don’t like it, they can vote in a different Board, but they can’t just object and refuse to pay.
You don’t need a write to work (for nothing) law anymore than you need a law allowing condo owners to refuse to pay for stuff they don’t like.
They all have an option — vote in new leadership. Welcome to life in a democracy.
Comment by Gooner Monday, Feb 2, 15 @ 12:25 pm
caption: One Hatched Out of Several Cuckoo Nests to Lay Her Eggs in Another
Comment by vole Monday, Feb 2, 15 @ 12:30 pm
Terminator meets the Borg Queen
Comment by Anotherretiree Monday, Feb 2, 15 @ 12:41 pm
Do you do housework?
Comment by Mouthy Monday, Feb 2, 15 @ 12:43 pm
==We shouldn’t politicize her.==
Yeah, because Governor Rauner certainly hasn’t politicized employees. Nope, not at all.
She joined the game of her own free will. She’ll have to deal with the slack. I imagine she has quite a bit thicker skin than you do and that she could give a flying leap about what people say or think about her.
Comment by Demoralized Monday, Feb 2, 15 @ 12:48 pm
The Governator walks alongside the Terminator of the Social Safety Net.
Comment by Mittuns Monday, Feb 2, 15 @ 12:56 pm
Ms. Arduin. California spending caps - voters imposed them in 1979. The fact that they weren’t there in 2003 means the voters removed them. Again, your past actions show you think the voters work for you, not you working for them.
Comment by Smitty Irving Monday, Feb 2, 15 @ 12:58 pm
“I kid you not. Laffer the “expert” wrote that stuff, and the WSJ edit board printed it.”
The Kochs will spend almost $900 million pushing this stuff in 2016 elections. They are all-all-in on this.
Obamacare Medicaid expansion has been a godsend, so much so in my opinion that even some Republican governors or state legislatures have seen the value of covering hundreds of thousands of poor people, and helping the hospital industry deal with uncompensated care. The ACA is flexible enough to allow states to provide health insurance to its poorest residents via public or private means.
We have a very interesting time ahead in regards to the ACA and government’s role in providing health insurance, with the impending SCOTUS ruling this summer, and with the 2016 elections.
Comment by Grandson of Man Monday, Feb 2, 15 @ 1:06 pm
Schwarzenegger: Are you daft, Donna?! You can’t fire me, I’m the governor. I’M the governor!
Arduin: You’re out of here, Arnold. And call me Dagny. Dagny Taggart.
Comment by up2now Monday, Feb 2, 15 @ 1:07 pm
Stop thinking she is some kind of Democrat you can make cry. Those insults only roll off her back. You show her that she doesn’t know what she is doing or talking about with facts.
If she saw the issues as you guys do, she wouldn’t be doing what she does. Stop wasting your breath with your personal insults. She won’t be defeated with political names. Only facts and numbers.
Get to work.
Comment by VanillaMan Monday, Feb 2, 15 @ 1:08 pm
++ She won’t be defeated with political names. Only facts and numbers.++
So you didn’t read the Herald Tribune piece? Her numbers are….well, baloney.
Comment by Dee Lay Monday, Feb 2, 15 @ 1:14 pm
The salary game is not new. IDNR Director Miller was listed as being paid through the Comptroller’s payroll. Leslie Sgro went from IDNR to the Governor’s Budget Office several years ago, but remained on the IDNR payroll.
Comment by PAM Monday, Feb 2, 15 @ 1:15 pm
Vanilla do you really think the comments here are intended to influence her?
She’s made a career of being an incompetent. Why would she listen to anybody else? She knows that if she recites her crazy little points, and keeps blaming poor people for all the world’s problems, people will pay her good money.
She doesn’t have to be right. She doesn’t have to be successful. She just needs to keep saying the same thing.
She doesn’t care what she thinks. She’s got a god gig with those who don’t require success.
Nobody here thinks they can influence her. It can’t be done. Until right winger demand a track record of success, she has no reason to listen to anybody else.
Comment by Gooner Monday, Feb 2, 15 @ 1:19 pm
No doubt there are innumerable Republican legislators anxious to sponsor and to vote on what she proposes.
The Speaker might assist them by calling their bills promptly.
Comment by east central Monday, Feb 2, 15 @ 1:20 pm
Exceptional Individualists make me both laugh and sick at the same time in regards to the utter hypocrisy and disdain they show for government while working in a taxpayer funded position.
Comment by Jorge Monday, Feb 2, 15 @ 1:22 pm
—
She doesn’t have to be right. She doesn’t have to be successful. She just needs to keep saying the same thing.
—
Exactly. And as long as she keeps saying the same thing — and is listened to — she has real power. Nevermind the implementation.
All that matters is that she says it and is covered by the (largely disappointing) media.
It’s awful and pathetic. But this is what voters wanted to do. And he’s doing it. He’s not fixing anything, BTW. He’s running for future president.
Comment by Macbeth Monday, Feb 2, 15 @ 1:33 pm
=== She’s historically praised consumption taxes. ===
I am guessing services taxes on private equity financial services were not on that list.
Comment by Juvenal Monday, Feb 2, 15 @ 1:51 pm
Juvenal, those wouldn’t be consumption taxes.
Comment by Rich Miller Monday, Feb 2, 15 @ 1:51 pm
Senator Bill Brady defended the increased salaries for Gov. Rauner’s staff.
http://www.wjbc.com/common/page.php?feed=141§ion_id=1&pt=Sen.+Brady+defends+higher+salaries+in+Rauner+administration&id=179381&is_corp=0
Comment by Nearly Normal Monday, Feb 2, 15 @ 1:56 pm
Rich -
A tax on private equity gains would not be a consumption tax.
But a tax on investment advising/management is as much as consumption tax as Rauner’s proposed tax on advertising services or legal services.
The only difference of course is that Rauner is in the private equity business and not the advertising business or a lawyer.
Comment by Juvenal Monday, Feb 2, 15 @ 2:06 pm
It sounds like Arduin studied at the Ayn Rand school of government.
Comment by Pot calling kettle Monday, Feb 2, 15 @ 2:08 pm
Am surprised, I am not good at jokes, but there has to be some kind of groping joke involving money with the two of them standing there… Also, is he standing on a box, or is she REALLY short?
Comment by downstate commissioner Monday, Feb 2, 15 @ 2:18 pm
Does laffer curve left or right?
Comment by Anonymous Monday, Feb 2, 15 @ 2:24 pm
downstate commissioner -
George W Bush is 6′ 0″ - you decide.
http://georgewbush-whitehouse.archives.gov/news/releases/2008/02/images/20080224-4_p022408jb-0416-515h.jpg
Comment by Anyone Remember Monday, Feb 2, 15 @ 3:07 pm
The most delicious irony in all of this is that the so-called Laffer curve that Ms. Arduin lives by may ultimately prove to be the State’s undoing in the pension case. What the Laffer curve, developed in the 1970’s when marginal tax rates on the wealthy were extremely high, basically proposes is that there is some revenue-maximizing income tax rate that is below 100%. As the tax rate approaches 100%, people work less, find ways to not declare their income and/or move to lower-tax locales, the net result being that past some point the government actually raises less revenue with a higher tax rate.
The problem for the state is that we are nowhere near that point currently, especially when you consider the joint impact of state income taxes, federal income taxes and payroll taxes. For example, in the absence of any supply side effect, i.e. in static terms, raising the income tax from the 5% that prevailed until recently to 6% generates a 20% increase in revenues. The way the math works out, to have zero revenue growth, you would need some combination of people working less and/or moving out of state that reduces the tax base by 16.67%. There is no way this will happen. A typical middle-class worker in Illinois last year faced a marginal tax rate on income of about 37.65% (25% Federal income tax, 5% Illinois income tax, 7.65% payroll tax); increasing the Illinois tax by 1% increases this to 38.65%. Can anyone seriously suggest that increasing typical taxpayers’ marginal tax rate from 37.65% to 38.65% will result in a 16.67% decrease in the tax base? When we went from 35.65% in 2010 to 37.65% (as a result of the income tax increase in 2011) did the tax base decline by 40% (which would have made the tax rate increase revenue-neutral)? Indeed, is there any evidence at all that the net outmigration from Illinois over the last 3 years was greater than it was previously?
So using Laffer’s own framework almost certainly refutes the assertion that the state is already generating as much revenue as it possibly can, leaving it no choice other than to reduce pensions or vital public services. This is why, one way or another the courts will ultimately strike down SB 1, and we may all have Dr. Laffer and his clarifying framework to thank for this result, at least in part.
Comment by Andy S. Monday, Feb 2, 15 @ 3:47 pm
Re paying staffers out of other agencies rather than his own office, you’d think a guy who complained about budget tricks would steer clear of doing budget tricks.
Also, it’s not like Rauner is going to run again. So, he can just tell the people, “you elected me to do a job and this is the price.” I mean, what are they going to do, not re-elect him? Heh. Or is he going to run again?
Comment by Cheswick Monday, Feb 2, 15 @ 4:13 pm
all senate confirmed directors (and many others) are paid out of the Comptroller’s budget by law. Did you just get off the bus?
Comment by steve schnorf Monday, Feb 2, 15 @ 4:27 pm
No. I was simply responding to the qctimes article and the many before it on this topic. I should have called them aides, I guess.
Comment by Cheswick Monday, Feb 2, 15 @ 4:35 pm
In case everyone has not been paying attention the last so many years, the word “entitlement” had been corrupted by both the politicla left and the political right.
The left corrupted it because they wanted to blur the lines between programs the taxpayers actually (or partilaly) pay for, like Social Security, and the pure welfare programs used to buy votes so they can gin up support for a tax increase by threatening actual earned benefits. Ever notice how it is always Social Security payments that will be cut whenever their isn’t enough money for eveyrhting in the federal budget?
The right went along with this corruption of “entitlement” because it lets them paint all government programs, earned or not, as wasteful and undeserved / unearned … so they can be cut in order to reduce taxes or increase spending on busienss priorities.
Comment by RNUG Monday, Feb 2, 15 @ 9:13 pm
- Shark Sandwich -
I crunched a lot of numbers to try to duplicate that chart (just ask Rich, he got to see a bunch of tables as examples). I finally managed to do it. To match it I had to assume a really low starting salary and something closer to 8%-9% raises EVERY year in order to match the claimed pension payout. TOTALLY UNREALISTIC in the State government I worked for.
The only other way I could find to match the numbers was to assume a fairly low and constant salary throughout most of the 26 years, with a monster sized raise about 5 years before retirement to meet the required final average for the pension payout.
Not saying either case could not happen, but it was clear to me the example on the slide was CHERRY PICKED and NOT THE NORM.
Comment by RNUG Monday, Feb 2, 15 @ 9:27 pm
@RNUG,
Very well stated!
In case everyone has not been paying attention the last so many years, the word “entitlement” had been corrupted by both the politicla left and the political right.
Comment by Federalist Monday, Feb 2, 15 @ 10:53 pm
RNUG-
I would love to see how they came up with it. Mostly I just picked up on the weaselled words; the above mentioned ‘career average’, or they say ‘paid in $41k’; sounds like they are only counting employee contribution years, when employees for 10? 12? years had the state pay their share in exchange for nonpay raises. Lastly, perhaps its a merit comp to bargaining unit PSA, would explain the big final years boost. And no one with a few promotions is going to have a straight line year to year pcrg increase.
Comment by Shark Sandwich Tuesday, Feb 3, 15 @ 8:07 am