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* Bloomberg…
Illinois residents could enjoy lower taxes if their squabbling leaders tackle the debt-riddled state’s biggest problem — its massively underfunded pension system. But that’s a big if.
Republican Governor Bruce Rauner, who’s running for re-election this year, says he could lower taxes by as much as $1 billion. First, lawmakers must address a crisis that’s vexed the state for years, and get a plan cleared by the courts soon.
“When I sign it, we’ll get that in front of our state judiciary,” Rauner told reporters in Chicago this week. “Once they bless it as constitutional, then we will have a billion dollar income tax cut for the people of Illinois.”
But if history is any guide, that’s not likely to happen.
The gist of the rest is that the proposal is constitutionally suspect and is also unlikely to pass the House.
The governor has constructed a trick bag for the Democrats. Senate President John Cullerton says his bill is constitutional. Rauner says he believes Cullerton and says Madigan is now standing in the way of a billion-dollar tax cut, which wouldn’t really amount to much but it sounds nice. A billllion dollars!
* Rauner campaign…
#TBT Pritzker Paid No State Income Tax in 2014, but Wants to Raise Your Taxes
JB Pritzker has made raising taxes on hardworking Illinoisans the defining issue of his campaign. But his personal history shows that he doesn’t put his money where his mouth is.
In 2014, Pritzker received a series of tax credits from his investments that ensured he paid no state income tax that year.
It’s crystal clear that Pritzker wants everyone else in Illinois to pay more with his immediate, destructive tax hike on Illinois families, but he will do whatever he can to avoid paying the taxman himself.
From the Chicago Sun-Times:
In May, Sun-Times reporter Tim Novak reported that Pritzker had saved nearly $230,000 on his property taxes by arguing that a Gold Coast mansion he bought for $3.7 million, began to renovate and then halted the work was “uninhabitable.”
Under the state angel investor program, four Pritzker businesses got a total of more than $1.2 million in tax credits in 2012. He got more state tax credits in 2013, 2014 and 2015, when two of his companies claimed a total of more than $537,000 in credits.
One Pritzker company that got a $250,000 tax credit later contributed $82,000 to the Illinois Democratic Party; the party’s chairman, state House Speaker Michael Madigan of Chicago; and three Democratic candidates for the Illinois House.
Taxes, Madigan, Taxes, Madigan, Taxes, Madigan, Taxes, Madigan, Taxes, Madigan all the way to November.
* Related…
* Editorial: Tax issues big in election year - Republicans have wasted no time speaking out against Democratic gubernatorial candidate J.B. Pritzker’s income-tax proposals.
posted by Rich Miller
Thursday, Apr 12, 18 @ 12:12 pm
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–Illinois residents could enjoy lower taxes if their squabbling leaders tackle the debt-riddled state’s biggest problem — its massively underfunded pension system.–
If anyone at Bloomberg read the Ill. SC decision, they’d realize that lede makes no sense.
Comment by wordslinger Thursday, Apr 12, 18 @ 12:16 pm
The flip side for Rauner, if Pritzker’s Crew wanted it is…
“Governor, you point to Cullerton, you point to this bill, and yet, you can’t wrangle 71, you can’t wrangle 60, votes to put pressure on the House to call the bill. Governor, you failed to do what governors are asked to do, get your agenda, your wants, passed through the legislature. Why are you failing to get this done, if you say it’s constituional?”
Comment by Oswego Willy Thursday, Apr 12, 18 @ 12:21 pm
GovJunk forgets the pension bill is sponsored by Durkie so call the bill bozo
And speakin’ of taxes let Durkie explain why he wants system that cuts GovJUnk state taxes by about $5 million compared to the system in Iowa.
Thanks Durkie.
Comment by Annonin' Thursday, Apr 12, 18 @ 12:22 pm
Then-Senate GOP leader Radogno put up more than half the votes needed to pass that in the Senate.
I haven’t heard a peep from House GOP leader Durkin if he can do the same.
It’s not like the rank-and-file Republicans are falling all over themselves to vote for pension reform for their downstate, union heavy districts.
But if Radogno could put up 16 of 22 Republicans in the Senate without any help from Rauner, you would think Durkin should be able to put 40 Republicans if not more on pension reform in the House.
Comment by Michelle Flaherty Thursday, Apr 12, 18 @ 12:24 pm
===you would think Durkin should be able to put 40 Republicans if not more on pension reform in the House.===
And if he can’t, why are we even talking about this?
Comment by 47th Ward Thursday, Apr 12, 18 @ 12:30 pm
===“Governor, you point to Cullerton, you point to this bill, and yet, you can’t wrangle 71, you can’t wrangle 60, votes to put pressure on the House to call the bill Governor, you failed to do what governors are asked to do, get your agenda, your wants, passed through the legislature. Why are you failing to get this done, if you say it’s constituional?”===
The beauty of this… is the obvious.
“Madigan”
“So, Governor, you’re failing, because of Madigan, what will be different in your second term, you already said… you’re not in charge… “
The point of the exercise is two-fold…
It brings “Madigan” and “I’m not in charge” into a melding that Rauner, when pointing to Madigan, it points to what Ives, and the phony Breen said (before Breen became a phony, but I digress) that Rauner has failed (hmm) to stand up to Madigan, and is not “in charge”.
It allows a left-handed counter, while signaling to the Ives and Proft folks that want Rauner defeated… Rauber is who they know he is…
Now, if they go back on their righteous indignation like Breen did, it won’t work, but making “Madigan” the “Rauner “isn’t in charge” failure… it might blunt the “Madigan” message.
It’s April.
Come June? Time’s a-wastin’ if this needs to be burned in.
Comment by Oswego Willy Thursday, Apr 12, 18 @ 12:31 pm
=== ===you would think Durkin should be able to put 40 Republicans if not more on pension reform in the House.===
And if he can’t, why are we even talking about this?===
That’s the ball game the likes of “Lucky Pierre” fails to see.
Maybe it’s up to the HDems to make the point…
“There ain’t 71, there ain’t 60 either. Where’s Durkin?”
Comment by Oswego Willy Thursday, Apr 12, 18 @ 12:33 pm
Yep, not sure if it is going to work, but it is the best song they have going for them.
Comment by OneMan Thursday, Apr 12, 18 @ 12:37 pm
A pension reform that probably would be constitutional: let people (retirees and current employees) choose to have their pensions go up by cost-of-living (some Labor Dept. measure of inflation) rather than by a fixed 3%.
The security might be attractive to some people, and if the Fed continues to keep inflation below 3% (which they’ve managed to do for the last 30 years or so) then it would save the state money. (Yes, the state would face some risk, but over time it would probably do better.)
Comment by UIC Guy Thursday, Apr 12, 18 @ 12:40 pm
Rich, you totally missed an opportunity to reference Dr. Evil. I’m disappointed in you.
“One BILLION Dollars.”
Comment by ChrisB Thursday, Apr 12, 18 @ 12:44 pm
I’d boil it down to an even simpler message. Mike Madigan has controlled the house for a long, long time. Other governors have found a way to work with him why can’t you?
Comment by Pundent Thursday, Apr 12, 18 @ 12:45 pm
I don’t know what angel investment programs are, but is Rauner saying he wants to end angel investment program credits? Are angel investment programs bad, or only bad when Pritzker does them?
Comment by Da Big Bad Wolf Thursday, Apr 12, 18 @ 12:49 pm
===Other governors have found a way to work with him why can’t you?===
While true, I’m coming at it as reminder to the Right How Rauner failed them by Madigan beating Rauner.
Let’s not forget Mr. Breen, “pre-phony”
===In the face of overwhelming evidence of Rauner’s inability to competently administer the Illinois government, inability to stand up to Mike Madigan effectively, and inability to keep his word and his commitments, I can no longer support him.===
It’s keeping Rauner’s narrow path by consolidation… out of reach.
The irony - Prudent - is an honest broker of a governor would be embarrassed by not working cooperatively, Rauner wanted crisis. According to “pre-phony” Breen, Rauner failed at taking on Madigan. Would be a shame if the “Kirking” of Rauner included failing at taking on Madigan.
Comment by Oswego Willy Thursday, Apr 12, 18 @ 12:55 pm
OW. Agreed. That’s why the “I’m not in charge” line works so very, very, well. It transcends “Bruce Rauner failed” and makes it “Bruce Rauner is incapable of succeeding.”
Comment by Pundent Thursday, Apr 12, 18 @ 1:01 pm
===That’s why the “I’m not in charge” line works so very, very, well. It transcends “Bruce Rauner failed” and makes it “Bruce Rauner is incapable of succeeding.”==
It makes sense, needs a lil “shop work”, but if that can be figured out, and melded together to blunt “Madigan”… whew.
Comment by Oswego Willy Thursday, Apr 12, 18 @ 1:03 pm
“I’d boil it down to an even simpler message. Mike Madigan has controlled the house for a long, long time. Other governors have found a way to work with him why can’t you?” - more like work for him but where has all that gotten the State of Illinois, the bottom didn’t just fall out since Rauner took office. That $130 - $150 billion pension debt and unfunded retiree healthcare problem was built on the back of all those Governors that work with/for Madigan. Those are the most pressing things of the day that are being ignored at the state and local level. Possibly up to 25% of the budget for pension debt and just think what happens if the economy goes south again and the rates of return drop.
Comment by Stand Tall Thursday, Apr 12, 18 @ 1:08 pm
- Stand Tall -
But… Rauner isn’t in charge.
Bruce Rauner… has failed.
Comment by Oswego Willy Thursday, Apr 12, 18 @ 1:10 pm
So I am confused, is theGovernor now opposed to tax credits? Isn’t tax credits why he vetoed the school reform bill. He shut down funding reform to get tax credits for private schools but opposes people using tax credits?
Does he not support businesses getting tax credits for job creation?
So governor you are willing to get rid of all corporate tax credit programs to pay for that 1 billion dollars tax cuts.
No you just want to take it out of the retirement pensions of state employeee
Btw SERS made $1.5 billion more than it spent in 2017. IS THERE A A REAL HOLE?
Comment by Confused Thursday, Apr 12, 18 @ 1:16 pm
Rauner’s tax cut plan would direct 25% of the cash back to the richest 1% of Illinois taxpayers.
Democrats should focus on that and discuss the need to make the way Illinois taxes its residents fairer for everyone
Comment by Juice Thursday, Apr 12, 18 @ 1:22 pm
The underfunded debt and all the other issues that Illinois has are due to all the prior governors who “worked” with Madigan and the one governor who did not worked with Madigan.
Seems to me there is a lot of failure to go around and no solutions in sight. Sorry JB
Comment by Cannon649 Thursday, Apr 12, 18 @ 1:27 pm
===Seems to me there is a lot of failure to go around===
Dunno if the best thing is to admit Rauner is part of an ongoing failure.
May want to workshop that a bit.
Comment by Oswego Willy Thursday, Apr 12, 18 @ 1:29 pm
Stand Tall, Rauner has virtually nothing to do with the massive debt that Illinois has accumulated over the past decades of Madigan controlled legislatures and Edgar kicking the can hard.
Comment by Ron Thursday, Apr 12, 18 @ 1:34 pm
= the bottom didn’t just fall out since Rauner took office.=
Correct. Rauner made them worse. Deliberately and willfully all the while claiming “I’m not in charge.”
Comment by Anonymous Thursday, Apr 12, 18 @ 1:50 pm
Cannon, you mean increasing the tax burden in a state with one of the highest in the country already is not a solution?
Comment by Ron Thursday, Apr 12, 18 @ 1:53 pm
==Rauner’s tax cut plan would direct 25% of the cash back to the richest 1% of Illinois taxpayers.==
Since the richest 1% of Illinois taxpayers account for over 20% of the income tax revenue, this is to be expected.
Most cuts benefit those who pay more. If all auto manufacturers offered a 20% discount on their cars, the guy at the Porsche dealership would benefit more than guy at Kia.
Comment by City Zen Thursday, Apr 12, 18 @ 1:57 pm
City Zen, that’s true on where the revenue is generated.
But if Rauner wanted to provide $1 billion in tax relief, he could double the personal exemption, or expand the EITC, or provide $1 billion in property tax relief. Any of those would do more good for more people than simply cutting the income tax rate by a quarter of a percent.
Comment by Juice Thursday, Apr 12, 18 @ 2:05 pm
Juice - I agree, the bottom-up approach works better, but it’s much easier to pitch tax cuts via rates than credits.
To be honest, I’d prefer he stop the income tax cut talk and just balance the darn budget with what he’s got.
Comment by City Zen Thursday, Apr 12, 18 @ 2:20 pm
-Ron- didn’t the GOP House members just demonstrate that Illinois flat tax at 4.95% is lower thank a whole list of states in their resolution against a progressive tax? So maybe their talking point about being the highest taxes state is just that a talking point.
Guess they need figure out which side of the tax debate they want to be on. Illinois taxes are the highest in country, we need breaks or Don’t change our flat tax because it’s lower than other states. Can’t have it both ways
Comment by Publius Thursday, Apr 12, 18 @ 2:23 pm
Most states “progressive” taxes start at extremely low income amounts. Until JB tells us how high he wants to increase the rates and at what incomes, we can’t tell.
Also, Illinois having the 5th highest tax burden in the country is from the Tax Foundation (a national non profit that has been looking at these things since the 1930s), not the GOP.
Comment by Ron Thursday, Apr 12, 18 @ 2:31 pm
For example, Missouri has 10 tax brackets and the highest, which is 6% starts at $9,000.
Comment by Ron Thursday, Apr 12, 18 @ 2:38 pm
City Zen, on that point I completely agree. Even if the GA passed his consideration model and the bigger if of the court finding it constitutional (since they already ruled that a pensionable salary cap is unconstitutional in Heaton), the savings in the annual contribution would be much better used going back to the pension systems to pay off the State’s unfunded liability.
Comment by Juice Thursday, Apr 12, 18 @ 2:40 pm
== pension reform that probably would be constitutional: let people (retirees and current employees) choose to have their pensions go up by cost-of-living (some Labor Dept. measure of inflation) rather than by a fixed 3%. ==
Yes, it would be constitutional. But every time the State has proposed it in the past, the State wants to cap it at the lesser of CPI-U or 3%. State hasn’t been willing to risk the upside. Can’t have the savings without the risk also.
And with the Fed raising interest rates, there is an upside risk. Probably not the time for the State to switch off the 3%,which limits the State’s exposure.
Comment by RNUG Thursday, Apr 12, 18 @ 3:13 pm
RNUG nails it for the win, especially since the 3% has outpaced inflation for the past decade. Above-average inflation going forward may be what it takes to bring pensions back into line with historical inflation rates, and push bond rates back to where “conservative” savers are no longer being punished by the Fed. I for one would love to see inflation, CD and bond rates back at what they were in the early-mid 2000’s.
Comment by Stuntman Bob's Brother Thursday, Apr 12, 18 @ 4:10 pm
Juice - We agree again. I’d prefer Rauner sold the doomed-to-fail consideration model as a source of additional funding for higher ed or social services or a way to fund the additional lower ed funding that was promised. At the very least, it could pit his biggest critics against one another.
Comment by City Zen Thursday, Apr 12, 18 @ 4:30 pm
==the State wants to cap it at the lesser of CPI-U or 3%. State hasn’t been willing to risk the upside.==
And why should it? The original sale was 0.5% of wages for 1.5% simple compounded AAI. They were never obliged to increase it to begin with.
Comment by City Zen Thursday, Apr 12, 18 @ 4:38 pm
Pungent- as far as the other Governors who have worked with(or given in to) Madigan- that goes a long way in explaining the State’s virtuAlly bankrupt status- what we don’t need is another Governor who wants to get in to bed with Madigan and spend and tax us even more
Comment by Sue Thursday, Apr 12, 18 @ 6:59 pm
Thanks for the reply, RNUG. I can understand why the state would want to avoid the risk, but it’s not going to work otherwise. (So it won’t work, is what you’re saying, and no doubt you’re right.)
But I don’t understand your remark: ‘And with the Fed raising interest rates, there is an upside risk. Probably not the time for the State to switch off the 3%,which limits the State’s exposure.’ The Fed is raising rates to ward off any danger of inflation—raising rates does not cause inflation, but rather tends to reduce it. (Hence the very high rates when Volker was chair of the Fed, which did—with a lot of pain—bring down the high inflation caused primarily by the sharp rise in oil prices.)
Comment by UICGuy Thursday, Apr 12, 18 @ 7:41 pm
The horse long left the barn on limiting the COLA payments which Were-introduced when inflation was much more of an issue. The geniuses back then thought the 3 percent cap was protecting the State. Who knew we would have a generation of no inflation. The statute. Gould have been written the lower of CPI or 3 percent. Changing it now on the precipe of higher inflation would be suicide
Comment by Sue Thursday, Apr 12, 18 @ 7:54 pm
Sue - It appears today that 26% would agree with you. But when voters step into the booth in November the names Thompson, Quinn, Edgar, and Blagojevich won’t be on the ballot. They’ll be asked to vote for a governor who made a bad situation worse, purposely and deliberately. And that same governor shows no signs that things would be any different next time around.
Comment by Pundent Thursday, Apr 12, 18 @ 7:59 pm
== But I don’t understand your remark: ‘And with the Fed raising interest rates … ==
The Fed holding the bank rate at effectively zero interest these past number of years also indirectly kept CPI-U (and others) low. There was no reason to raise prices when you were operating on,in effect, free money.
Remember, the last few years there was no SS increase, but there was this year. The SS increase is based off CPI. The Fed has been slowly raising the inter-bank bate a quarter percent at a time, and it is influencing businesses to raise prices, which drives up CPI.
Comment by RNUG Thursday, Apr 12, 18 @ 9:48 pm
There is still very little inflation and the economy has really picked up. If the fed keeps raising rates we may have a recession. And goodbye illinois budget.
Comment by Ron Thursday, Apr 12, 18 @ 10:54 pm
The economy HAS not really picked up
Comment by Ron Thursday, Apr 12, 18 @ 10:54 pm