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* Greg Hinz…
At issue is a bill sponsored by Sen. Michael Hastings, D-Orland Hills, that would allow cities and villages to hire outside auditors to review confidential Illinois Department of Revenue data to determine if the department is giving the locals the tax income to which they’re entitled.
Some of the data is collected store by store and would be of value to those trying to data-mine or get a marketing edge. But the municipalities are worried about being shortchanged after a recent incident in which the Department of Revenue conceded that it had overpaid local governments $168 million in personal property replacement tax revenues and wants the money back.
Hastings says he may call the measure for a final Senate vote today and says his bill is just a limited step to ensure that the money goes where it’s supposed to. Opposing business groups are “fear mongering,” he charges. […]
But Illinois Retail Merchants Association President Robb Karr says the local governments “don’t need the sensitive information of a local business—particularly if they want to give it to an unaccountable third party operating under a contingency-fee arrangement.” […]
“A government auditor’s role is to determine the correct amount of tax; no more, no less. When the party in that role has a financial incentive to maximize the amount of tax, there is an inherent conflict. If the Department of Revenue started compensating their auditors based on how much money they brought in, the uproar would be (rightfully) huge; this is no different.” [said Carol Portman, president of the Taxpayers Federation of Illinois]
I can definitely see Portman’s point, but when the government makes a $168 million mistake, you gotta expect people to question the entire process.
posted by Rich Miller
Wednesday, May 11, 16 @ 12:06 pm
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Um the state alteady has the incentive to maximize the tax…. and arent in house auditors paid to minimize the tax?
this logically is a horrible argument…. dang tootin we should maximize the tax we get…. if we arent we need to change the system. Basically the tax layers are saying they dont pay the propper tax and the dont want anyone with and string incentive to catch them
Comment by Ghost Wednesday, May 11, 16 @ 12:11 pm
The overpayment was a result of mismanagement by Pat Quinn. We now have a new governor who manages differently.
Comment by Muscular Wednesday, May 11, 16 @ 12:18 pm
Wow, what a horrible piece of legislation. In what world would we want to give confidential tax information to a company so they could personally profit off of our tax dollars?!?
Comment by Veritas Wednesday, May 11, 16 @ 12:30 pm
The only incentive these genius consultants have is to put 20% to 50% of the “found” dollars in their own pocket. BTW, they aren’t finding new money, just shifting it between municipalities is a net loss for the state. Many professional good government and accounting organizations put out statements condemning the practice. I mean really, how would you like some private company pouring through your tax info to line a for-profit companies pockets? Businesses, especially small vulnerable ones don’t want that either!
Comment by Fairenough Wednesday, May 11, 16 @ 12:34 pm
The same confidentiality rules and sanctions will be in place for the 3rd party auditors —- modeled on other states. The IRMA complaints lack much credilbility.
Comment by Annonin' Wednesday, May 11, 16 @ 12:34 pm
Actually many other states ban this practice and many others who tried it repealed it immediately. The IRMA complaints are very valid.
Comment by Fairenough Wednesday, May 11, 16 @ 12:36 pm
If the contingency outfit has to pay the taxpayer for defending the audit if they find less than what the taxpayer spent defending it, maybe then its fair - they have skin in the game. Otherwise, this is like paying proctologists on contingency for polyps removed but indemnifying them from malpractice.
Comment by Alexander Cut the Knot Wednesday, May 11, 16 @ 12:44 pm
Actually, I’d love to see the compliance with the new law as of January which compels municipalities to declare the amount of rebates and tax incentives they give to corporations within their jurisdiction. I’d love to see how corporations have been taking us to the cleaners. That might then explain why the municipalities need to know if they are maximizing the take from IDOR. Corporations fleecing the cities. Cities fleecing the state. The State dropping the ball on Federal money then the feds shaking down the working and middle class. Corporations and the Feds are winners!
Comment by Honeybear Wednesday, May 11, 16 @ 12:47 pm
Seems like the wrong fix–just spending more money on auditors. Rauner campaigned as an effective manager and has demonstrated progress in some departments such as DCFS. Ask what the plans are to assure this doesn’t recur first and then proceed as needed.
Comment by Earnest Wednesday, May 11, 16 @ 12:58 pm
Before making a decision on the bill I would invite IRMA to respond what they think should be done to fix an obvious mess at the Department of Revenue that has serious implications for the municipalities that their stores do business in.
Comment by Just Me Wednesday, May 11, 16 @ 1:14 pm
“We now have a new governor who MISmanages differently.”
There. Fixed it for you.
Comment by HangingOn Wednesday, May 11, 16 @ 1:26 pm
Maybe there’s a different lesson to be learned in this particular case.
It appears that Senator Hastings has taken a 2 fold lesson that (a) The State of IL under the prior administration screwed up on distributing money to units of local government, so therefore (b) Businesses located in IL need to be more intrusively audited to correct the mis-allocation (tax revenue distribution) problem occurring at the State level?
Really?
Think about it. State government screwed up, so businesses get to pay the price for state government mismanagement?
Why don’t we:
1) Demote/terminate the people who failed to get it right.
2) Change the system. The point of failure appears to be in the distribution of revenues collected. If the State is just incapable of getting things right, then don’t do it. Change the System. In other words, re-direct the money to the State GRF so we can start to pay for the growing mountain of unpaid bills.
Yes, the screams and howls of rage from the units of local government will be legendary, to put it mildly.
Just because state government is inept and incompetent in this particular case is not a sufficient justification for penalizing business.
Comment by Anon Downstate Wednesday, May 11, 16 @ 1:29 pm
Really… a $168,000 Rauner mistake? I wanna see the books.
Comment by Tinsel Town Wednesday, May 11, 16 @ 1:42 pm
This isn’t an audit of business, it is an audit of the state’s book-keeping. I don’t think it is unreasonable for municipalities to demand to see how much is being collected on their behalf and how much they are getting. In fact, those books should be open to us all. To protect “privacy” we could review a list of the names of businesses that are included in the municipality and the total amount collected, not necessarily by establishment. Let the sun shine on all of this.
Comment by NoGifts Wednesday, May 11, 16 @ 2:13 pm
==NoGifts - Wednesday, May 11, 16 @ 2:13 pm: ==
I agree - the cities need to know if they are receiving their full local tax money owed to them by the state.
Comment by Mama Wednesday, May 11, 16 @ 5:14 pm
Terminate the people who made the errors. What a concept!
A procedure audit would be in order.
Here is another concept - make it simpler and take as many people out of the process.
Comment by cannon649 Wednesday, May 11, 16 @ 9:03 pm
Look up what his Dad, Kyle Hastings, mayor of Orland Hills is doing in Lyons School District 103 and you will see where he gets these great ideas. Rblandmark.com
Comment by Lyons 103 Wednesday, May 11, 16 @ 10:20 pm