By Bethany Jaeger
The General Assembly will return to the Capitol in a special legislative session Tuesday afternoon, seven days before a new fiscal year starts without a state budget in place. However, legislative leaders appear unlikely to agree on a way to avoid a budget plan that would cut at least $7 billion from state-funded services after July 1.
According to Senate President John Cullerton, legislators will return to Springfield to address technical problems with the $29 billion capital construction program approved last month, as well as some other bills that authorized limited spending. But Gov. Pat Quinn indicated he still does not intend to sign the infrastructure program into law without a balanced operating budget in place.
While Quinn emerged from a meeting with legislative leaders in Chicago this afternoon and said he hopes to achieve both next week with bipartisan support, none of the leaders mentioned income tax increases as part of next week's agenda. (Thanks to Capitol Fax Blog for providing video.)
“Unfortunately, it appears at this point in time that the Republicans are not ready to vote for any revenue increases," Cullerton said. "And that’s unfortunate.”
Democrats maintain that the state cannot cut its way out of what Quinn estimates to be a $9.2 billion deficit and that an income tax increase is the only way to prevent draconian cuts to human services to the most vulnerable citizens. Republicans repeat their call for government reforms first, which Senate Minority Leader Christine Radogno said could reveal savings that would offset some of the need to raise income taxes by as much as proposed by Democrats. “The Democrat proposal is to raise taxes now and we’ll figure out reforms maybe later, and we don’t accept that that’s a realistic way to approach this,” Radogno said.
She also described the state's budget situation as "manufactured." “I believe it is a manufactured crisis to the extent that we do not need to have those draconian cuts on July 1," she said, adding that the state could fund services for the first half of the fiscal year while legislators continued to negotiate. Quinn said it's irresponsible to begin a year by spending money that would run out halfway through.
Cullerton said before the meeting that a "reasonable solution" would be to enact the Senate-approved version of an income tax increase that also would relieve property taxes and expand the sales tax to some services. He said House Bill 174 would need Democratic and Republican votes to pass in the House. House Speaker Michael Madigan said that not enough members of his caucus, which has 70 members, are willing to vote for an income tax increase without GOP support. “There were a certain number of House Democrats who said quite flatly, ‘I’m not going to go on a roll call when it’s Democrats-only,’” Madigan said.
Any revenue-generating proposal would need 71 votes to pass now that the legislative session has extended beyond May 31, making it harder for enough legislators to get beyond politics and agree on a budget plan within seven days of the new fiscal year.
Showing posts with label Tax swap. Show all posts
Showing posts with label Tax swap. Show all posts
Wednesday, June 17, 2009
Sunday, May 31, 2009
Down to the wire
By Jamey Dunn and Bethany Jaeger, with Hilary Russell contributing
Some of yesterday’s moving parts actually started revolving around each other late in the day Thursday. The Illinois Senate approved two major revenue enhancements, one a sizable tax hike and another a major gaming expansion. That immediately put the onus on the House, which was in the middle of trying to advance an “insurance budget” to fund agency programs at bare bones levels.
Income tax increases and education funding
The momentum started in the Senate. Democrats tweaked a bill that was intended to address education funding, which would include an income tax increase of 2 percentage points for individuals. It would increase from 3 percent to 5 percent. Different versions of the measure have long been presented by Sen. James Meeks, a Chicago Democrat, but never found the support to pass. However, a looming deadline and $7 billion budget deficit this fiscal year has created new possibilities for an old concept.
One difference this time around is that the plan would only raise the corporate income tax rate from 4.8 percent to 5 percent, a much smaller increase than previously sought. It also would expand the sales tax to include services.
Senate President John Cullerton said the tax restructuring would help solve some of the chronic budget woes, but the plan would still come up $2 billion short of what the state needs to fully fund pensions and to maintain current spending levels. A vote for the tax plan, he said, inherently would be a vote for $2 billion in budget cuts.
House Bill 174 (the "new 750"), would provide some targeted tax relief. It would raise the personal exemption and increase the earned income tax credit over two years to protect low-income residents. It also would provide property tax relief, which attracted Democratic Senators.
Over time, the tax plan would funnel more money into education and higher education, something Meeks wanted for years to address funding disparities between school districts throughout the state.
Republicans opposed the tax increase and sales tax expansion, describing it as a mistake during a recession. Sen. Matt Murphy, a Palatine Republican, said: “There’s a lot of different ways we can go at this if we go line-by-line through this budget, and I know because I’ve done it. This will cause more Illinoisans to lose their jobs, without a doubt.”
The bill passed with only Democratic votes. Sen. Dan Kotowski, a Park Ridge Democrat, gave an emotional speech about making his last-minute choice to vote for the bill. He said he had been praying about his decision and cast the vote that he knew would make his family proud. He said he had been telling leadership that he would vote “present,” but he changed his mind during floor debate. After the vote, Kotowski encouraged some House Republicans to follow suit.
Cullerton said that passing the bill in the Senate may help House Democrats feel safer about changing their minds. However, he said that the bill would need Republican support to pass. “When one chamber starts and passes a bill, they see that we’re still walking around — we’ve got a different version of what the governor has — that there’s a way to do this. So I think it’s a good start.”
But Gov. Pat Quinn is still backing the income tax proposal that has been introduced in the House. “I think the [temporary income tax] plan we have here in the House is probably the one we’ll have to go with. It’s straightforward. It’s pretty simple. It’s for two years. And the whole idea is for at least at this time to hold off dire catastrophes.”
Gaming
Momentum to consider alternative revenue sources continued with a Senate vote to expand gaming by adding four new facilities, including new gaming facilities in Chicago, Waukegan, Rockford and Danville. Existing gaming facilities, including horse tracks, also could start operating more slot machines. Senate Bill 744 would generate at least $150 million upon issuing the licenses, according to Sen. Terry Link, a Waukegan Democrat. Once the new facilities were up and running and the economy improved, he said the package could generate up to $1 billion a year.
Building new casinos and riverboats has been tried numerous times in the past few years, and similar proposals haven’t advanced in the House. But, Link said: “They need money and here’s a good way to give them money. So I think it's future is a lot better tonight.”
Rep. Bill Black, a Danville Republican who would receive a gaming facility in his district through Link’s bill, said the state may need an income tax increase. Then again, he said: “When you’re drowning and a life preserver floats by, your impulse is to grab it. When you have a community that’s so desperate for investment and jobs, you turn to things you normally wouldn’t even consider. I would support the riverboat. I don’t have the luxury to say I don’t.”
Bare bones budget
The so-called “insurance budget” advanced by House Democrats as a back-up plan would fund state agencies at about 80 percent of the level they were funded at last year, which would be about 50 percent of the governor’s proposed budget.
Majority Leader Barbara Flynn Currie tried early in the day to advance a temporary income tax increase. That wasn’t gaining enough votes. So late Saturday night, Currie tried to at least approve the “insurance budget” to keep the lights on, so to speak. Without it, agencies would be funded at 32 percent of Quinn’s proposed budget.
But after word spread that senators approved an income tax increase across the rotunda, several House Democrats started to peal off support for a bare bones budget. Rep. Sara Feigenholtz, a Chicago Democrat and vocal advocate of human services, urged fellow lawmakers to hold off on a bare bones budget to “continue to fight for more solutions.”
Currie said she would prefer either version of an income tax over a bare bones budget, but it was a way to ensure something landed on the governor’s desk just in case chaos ensued Sunday, the last day of the regularly scheduled session.
If all else fails, Currie said she would call the bare bones budget again before Sunday’s midnight deadline. Here’s what it would do:
On the revenue side:
Some of yesterday’s moving parts actually started revolving around each other late in the day Thursday. The Illinois Senate approved two major revenue enhancements, one a sizable tax hike and another a major gaming expansion. That immediately put the onus on the House, which was in the middle of trying to advance an “insurance budget” to fund agency programs at bare bones levels.
Income tax increases and education funding
The momentum started in the Senate. Democrats tweaked a bill that was intended to address education funding, which would include an income tax increase of 2 percentage points for individuals. It would increase from 3 percent to 5 percent. Different versions of the measure have long been presented by Sen. James Meeks, a Chicago Democrat, but never found the support to pass. However, a looming deadline and $7 billion budget deficit this fiscal year has created new possibilities for an old concept.
One difference this time around is that the plan would only raise the corporate income tax rate from 4.8 percent to 5 percent, a much smaller increase than previously sought. It also would expand the sales tax to include services.
Senate President John Cullerton said the tax restructuring would help solve some of the chronic budget woes, but the plan would still come up $2 billion short of what the state needs to fully fund pensions and to maintain current spending levels. A vote for the tax plan, he said, inherently would be a vote for $2 billion in budget cuts.
House Bill 174 (the "new 750"), would provide some targeted tax relief. It would raise the personal exemption and increase the earned income tax credit over two years to protect low-income residents. It also would provide property tax relief, which attracted Democratic Senators.
Over time, the tax plan would funnel more money into education and higher education, something Meeks wanted for years to address funding disparities between school districts throughout the state.
Republicans opposed the tax increase and sales tax expansion, describing it as a mistake during a recession. Sen. Matt Murphy, a Palatine Republican, said: “There’s a lot of different ways we can go at this if we go line-by-line through this budget, and I know because I’ve done it. This will cause more Illinoisans to lose their jobs, without a doubt.”
The bill passed with only Democratic votes. Sen. Dan Kotowski, a Park Ridge Democrat, gave an emotional speech about making his last-minute choice to vote for the bill. He said he had been praying about his decision and cast the vote that he knew would make his family proud. He said he had been telling leadership that he would vote “present,” but he changed his mind during floor debate. After the vote, Kotowski encouraged some House Republicans to follow suit.
Cullerton said that passing the bill in the Senate may help House Democrats feel safer about changing their minds. However, he said that the bill would need Republican support to pass. “When one chamber starts and passes a bill, they see that we’re still walking around — we’ve got a different version of what the governor has — that there’s a way to do this. So I think it’s a good start.”
But Gov. Pat Quinn is still backing the income tax proposal that has been introduced in the House. “I think the [temporary income tax] plan we have here in the House is probably the one we’ll have to go with. It’s straightforward. It’s pretty simple. It’s for two years. And the whole idea is for at least at this time to hold off dire catastrophes.”
Gaming
Momentum to consider alternative revenue sources continued with a Senate vote to expand gaming by adding four new facilities, including new gaming facilities in Chicago, Waukegan, Rockford and Danville. Existing gaming facilities, including horse tracks, also could start operating more slot machines. Senate Bill 744 would generate at least $150 million upon issuing the licenses, according to Sen. Terry Link, a Waukegan Democrat. Once the new facilities were up and running and the economy improved, he said the package could generate up to $1 billion a year.
Building new casinos and riverboats has been tried numerous times in the past few years, and similar proposals haven’t advanced in the House. But, Link said: “They need money and here’s a good way to give them money. So I think it's future is a lot better tonight.”
Rep. Bill Black, a Danville Republican who would receive a gaming facility in his district through Link’s bill, said the state may need an income tax increase. Then again, he said: “When you’re drowning and a life preserver floats by, your impulse is to grab it. When you have a community that’s so desperate for investment and jobs, you turn to things you normally wouldn’t even consider. I would support the riverboat. I don’t have the luxury to say I don’t.”
Bare bones budget
The so-called “insurance budget” advanced by House Democrats as a back-up plan would fund state agencies at about 80 percent of the level they were funded at last year, which would be about 50 percent of the governor’s proposed budget.
Majority Leader Barbara Flynn Currie tried early in the day to advance a temporary income tax increase. That wasn’t gaining enough votes. So late Saturday night, Currie tried to at least approve the “insurance budget” to keep the lights on, so to speak. Without it, agencies would be funded at 32 percent of Quinn’s proposed budget.
But after word spread that senators approved an income tax increase across the rotunda, several House Democrats started to peal off support for a bare bones budget. Rep. Sara Feigenholtz, a Chicago Democrat and vocal advocate of human services, urged fellow lawmakers to hold off on a bare bones budget to “continue to fight for more solutions.”
Currie said she would prefer either version of an income tax over a bare bones budget, but it was a way to ensure something landed on the governor’s desk just in case chaos ensued Sunday, the last day of the regularly scheduled session.
If all else fails, Currie said she would call the bare bones budget again before Sunday’s midnight deadline. Here’s what it would do:
On the revenue side:
- Sweep $356 million from dedicated funds four times throughout the year.
- Refinance debt to get a 4 percent interest rate and save $600 million next year, saving $237 million over the life of the bonds.
- Along with tapping into federal funds and starting other efficiencies, it would generate about $1 billion.
- State agencies could receive lump sums at half the funding level proposed by the governor.
- The administration would have to figure out how to spread the money around and to cut certain grant programs.
Tuesday, March 24, 2009
Will the "cutting committee" cut much?
By Jamey Dunn and Hilary Russell
The state’s budget deficit could be worse than Gov. Pat Quinn’s projection of $11.6 billion next fiscal year. But some education-funding reform advocates see a silver lining in that the dire budget constraints could open the door for a longstanding effort to restructure the way Illinois pays for public education.
They’re again supporting a so-called tax swap, which would increase the state income tax and expand the state sales tax to apply to services. The new revenues would help offer property tax relief. Sen. James Meeks, a Chicago Democrat who has been pushing the idea for seven years, says relying less on property taxes to fund public education would help address funding disparities between property rich and property poor school districts.
We’ll find out tomorrow morning whether such tax reforms will be included in a series of recommendations that a special bipartisan committee will pass along to legislative leaders as they try to figure out how to balance next year’s state budget. The special committee is led by a rare co-chairmanship of one Democrat and one Republican. Sen. Donne Trotter is the Democratic chairman. He said the committee is considering recommending such revenue changes as a tax swap, as well as other changes to the public employee pension system, that both parties can support.
The state’s budget deficit could be worse than Gov. Pat Quinn’s projection of $11.6 billion next fiscal year. But some education-funding reform advocates see a silver lining in that the dire budget constraints could open the door for a longstanding effort to restructure the way Illinois pays for public education.
They’re again supporting a so-called tax swap, which would increase the state income tax and expand the state sales tax to apply to services. The new revenues would help offer property tax relief. Sen. James Meeks, a Chicago Democrat who has been pushing the idea for seven years, says relying less on property taxes to fund public education would help address funding disparities between property rich and property poor school districts.
We’ll find out tomorrow morning whether such tax reforms will be included in a series of recommendations that a special bipartisan committee will pass along to legislative leaders as they try to figure out how to balance next year’s state budget. The special committee is led by a rare co-chairmanship of one Democrat and one Republican. Sen. Donne Trotter is the Democratic chairman. He said the committee is considering recommending such revenue changes as a tax swap, as well as other changes to the public employee pension system, that both parties can support.
“There’s probably going to be a larger stack of things that we could agree upon than things that we can’t,” Trotter said. However, he added that there’s a good chance that the committee could produce a majority and minority opinion reports.
Trotter said Meeks’ tax reforms have support from committee members of both political parties.
Legislators’ reluctance to raise state income taxes has been one of the main roadblocks to various tax swap proposals advanced in the past seven years, but Meeks said the likelihood of an income tax hike this year creates a “now or never” opportunity for reform. The latest proposal, SB 750, would raise the state income tax from 3 percent to 5 percent for individuals and from 4 percent to 8 percent for corporations.
While the tax reforms traditionally have been proposed as a way to reform education funding, Meeks said he’s open to using new tax revenues to plug the state’s budget deficit for up to two years. But then it would have to switch to fund education. If lawmakers only consider the deficit, he said, “we’ll end up raising taxes, but we won’t end up fixing anything.”
Ralph Martire, executive director of the Chicago-based Center for Tax and Budget Accountability, supports Meeks’ plan for education funding and said there’s an added reason (scroll down) to reform the state’s tax structure. “The bottom line is Illinois cannot get to a balanced budget situation without adjusting both of its major taxes,” he said. He added that expanding the state sales tax could allow for a lower rate.
The Taxpayers’ Federation of Illinois opposes the bill because, according to organization president Tom Johnson, property tax is a reliable revenue source for local governments even in hard times. He added that the state may not be able to keep up with the property tax relief, which he said could “vanish in a relatively short period of time.”
Tomorrow morning’s Budget Deficit Reduction Committee will wrap up four weeks of testimony, which started out by focusing more on what agencies and advocates couldn’t live without than what they were willing to cut. The last two meetings have changed the focus to more concrete examples of ways the state could generate money while it also saved money.
Sen. Matt Murphy, the Republican co-chair from Palatine, said: “I love the idea of restraining future growth for spending because there’s never gonna be enough tax revenue if we don’t get a handle on the spending. I look forward to coming out with a collection of deficit reduction measures that we think can help fill this hole and do it in a way that’s productive for the long-term benefits for the state.”
Trotter said Meeks’ tax reforms have support from committee members of both political parties.
Legislators’ reluctance to raise state income taxes has been one of the main roadblocks to various tax swap proposals advanced in the past seven years, but Meeks said the likelihood of an income tax hike this year creates a “now or never” opportunity for reform. The latest proposal, SB 750, would raise the state income tax from 3 percent to 5 percent for individuals and from 4 percent to 8 percent for corporations.
While the tax reforms traditionally have been proposed as a way to reform education funding, Meeks said he’s open to using new tax revenues to plug the state’s budget deficit for up to two years. But then it would have to switch to fund education. If lawmakers only consider the deficit, he said, “we’ll end up raising taxes, but we won’t end up fixing anything.”
Ralph Martire, executive director of the Chicago-based Center for Tax and Budget Accountability, supports Meeks’ plan for education funding and said there’s an added reason (scroll down) to reform the state’s tax structure. “The bottom line is Illinois cannot get to a balanced budget situation without adjusting both of its major taxes,” he said. He added that expanding the state sales tax could allow for a lower rate.
The Taxpayers’ Federation of Illinois opposes the bill because, according to organization president Tom Johnson, property tax is a reliable revenue source for local governments even in hard times. He added that the state may not be able to keep up with the property tax relief, which he said could “vanish in a relatively short period of time.”
Tomorrow morning’s Budget Deficit Reduction Committee will wrap up four weeks of testimony, which started out by focusing more on what agencies and advocates couldn’t live without than what they were willing to cut. The last two meetings have changed the focus to more concrete examples of ways the state could generate money while it also saved money.
Sen. Matt Murphy, the Republican co-chair from Palatine, said: “I love the idea of restraining future growth for spending because there’s never gonna be enough tax revenue if we don’t get a handle on the spending. I look forward to coming out with a collection of deficit reduction measures that we think can help fill this hole and do it in a way that’s productive for the long-term benefits for the state.”
Wednesday, March 11, 2009
Similar concepts, new context
One week before Gov. Pat Quinn proposes his first state budget to the General Assembly, legislators and advocates of all stripes are revisiting a lot of issues they tried but failed to enact during the Blagojevich Administration. This time, there’s a new context:
Gaming for capital
Republican leaders oppose increasing the state sales tax on gasoline to pay for a major construction program. Instead, they rekindled ideas to fund a capital program for schools, mass transit and infrastructure projects by expanding gaming. Their goal is to avoid raising any state taxes in a recession.
“Right now is absolutely not the time to be raising taxes on people who are struggling themselves,” said Senate Minority Leader Christine Radogno.
She and House Minority Leader Tom Cross propose expanding gaming to generate $1 billion in new revenue, which would help finance a $25 billion capital program. (They propose bonding about $12 billion, tapping $11 billion in the dedicated Road Fund to pay for transportation projects and leveraging about $3.5 billion from federal and local matching funds.)
Their gaming ideas include recurring proposals to allow a Chicago casino, expand positions at existing gaming facilities and enter a public-private partnership so that private investors manage the Illinois Lottery while the state continues to own it. Newer ideas include allowing video poker, as proposed in HB 4329, which is sponsored by one of Madigan’s assistant majority leaders, Rep. Frank Mautino of Spring Valley. Republicans also mentioned allowing Lottery tickets to be sold online, a proposal previously advanced by Cullerton.
Madigan took gaming off the table last year, but his spokesman, Steve Brown, said this is a new year. However, he said gaming tends to be a regressive source of revenue that usually generates a bunch of hype before falling by the wayside.
Senate Majority Leader James Clayborne said gaming for capital is still on the table in his chamber.
Tax reforms for education and economy
Ralph Martire, executive director of the Chicago-based Center for Tax and Budget Accountability, reintroduced a concept of increasing the state income tax rate and expanding the state sales taxes to cover services. The goal is to reform the way the state pays for public education and to reduce the burden on local property taxes.
Cutting back on state spending during a recession may sound logical, Martire said, but “it is quite clearly the absolute worst thing the state of Illinois could do.”
He joined two leaders in the Illinois Legislative Black Caucus to cite new evidence from Mark Zandi, Moody’s Economy.com’s chief economist, that the idea could help reduce the length of the economic recession in Illinois by preserving thousands of jobs and helping taxpayers spend money in their local economies.
The plan has been proposed in various forms before and would increase state income taxes, expand state sales taxes and provide targeted tax relief to low- and middle-income taxpayers. He added that broadening the sales tax to apply to services could reduce its rate, although it would be a hard sell to Cook County residents who already pay some of the highest sales tax rates in the country.
Sen. James Meeks, a Chicago Democrat and longtime sponsor of education funding reform measures, said Blagojevich is no longer in a position to threaten to veto tax reforms, and Cullerton has been a co-sponsor of such reforms. However, he added, his peers in the Senate likely would not support an income tax increase if it didn’t lead to education funding reform and property tax relief.
GOP budget reforms
By Hilary Russell
House Republicans flatly disagree and say Illinois has a spending problem, according to House Minority Leader Tom Cross.
He joined his GOP Caucus members and John Tillman, chief executive officer of the Chicago-based Illinois Policy Institute, a nonpartisan research organization, to propose budget reforms that would help reduce the $9 billion deficit and increase accountability. Introduced today in a Statehouse news conference, the proposals include:
The Sunshine Act (HB 4134) would create a volunteer commission of four legislators and four members of the public to review each of the state’s executive branch programs. The bill is sponsored by Rep. David Reis, a Willow Hill Republican. The state does not have an accurate list of existing programs, making it difficult for lawmakers to keep track of them, GOP members said.
Reis is also sponsoring the Stimulus Watch Act, which would require the General Assembly’s approval to use federal stimulus funds to create new state programs. Once the funds run out for a particular program, it would end.
“Pay as You Go Spending” (HB 3189), sponsored by Rep. Mike Connelly, a Lisle Republican, would implement a start and end date for new state spending programs. Just to add a program another must be eliminated.
Rep. Darlene Senger, a Naperville Republican, is co-sponsoring a constitutional amendment that would change the required number of votes to raise taxes. Currently, a majority of 60 votes in the House and 30 in the Senate is needed to increase fees or taxes. Senger’s proposal would increase the required number of votes to a “supermajority,” or 71 votes in the House and 36 in the Senate, making it more difficult to pass tax bills.
Rep. Lou Lang, a Skokie Democrat, said that the Republican’s timing was more showboating for their constituents than offering real solutions. “I find it very interesting that whenever there is a public policy decision to be made and the facts are clear that many people look for a political peg to take the chance to hang their hat on rather than take any political risk whatsoever.”
Gun control vs. gun rights
By Jamey Dunn
On the same day that thousands of people came to the Capitol building to participate in the annual gun owner lobbying day, every gun control measure voted on in a House committee advanced to the floor. A feeling of déjà vu was in the air.
Two of the gun control measures that passed through the committee today were proposed last session by the same two Democrat sponsors from Chicago. House Bill 12, sponsored by Rep. Luis Arroyo, would limit handgun purchases to one per person per month. House Bill 165 , proposed by Rep. Edward Acevedo, would ban semi-automatic assault weapons.
Other measures before the committee included House Bill 179, proposed by Chicago Democrat Rep. Deborah Graham, which would require that guns must either be equipped with gun locks or stored in lock boxes around minors. House Bill 180, also sponsored by Graham, would make gun dealers register with the Illinois State Police, who could then do spot checks on the dealers.
Rep. Brandon Phelps, a Democrat from Harrisburg, supports gun rights and is pushing for a few different bills that would allow counties to decide if they wanted to allow concealed carry of guns. One concealed carry bill sponsored by Sen. John Jones, a Republican from Mount Vernon, did not make it out of the Senate Public Health Committee yesterday.
Special elections
Two special election bills were killed today in a partisan showdown in the House Executive Committee. The hearing only included Cross’ special election bill and one proposed by Rep. Jack Franks, a Democrat from Woodstock. Both votes split along party lines. Republicans on the committee were visibly miffed and protested the demise of the bills.
- Legislators and Statehouse insiders trust Quinn more than they trusted Blagojevich.
- Senate President John Cullerton has a better working and personal relationship with House Speaker Michael Madigan than did former Senate President Emil Jones Jr.
- The economic and fiscal crises have sparked a new sense of urgency to find quick fixes at the same time they have inspired a willingness (however reluctant) to pursue more long-term reforms.
Gaming for capital
Republican leaders oppose increasing the state sales tax on gasoline to pay for a major construction program. Instead, they rekindled ideas to fund a capital program for schools, mass transit and infrastructure projects by expanding gaming. Their goal is to avoid raising any state taxes in a recession.
“Right now is absolutely not the time to be raising taxes on people who are struggling themselves,” said Senate Minority Leader Christine Radogno.
She and House Minority Leader Tom Cross propose expanding gaming to generate $1 billion in new revenue, which would help finance a $25 billion capital program. (They propose bonding about $12 billion, tapping $11 billion in the dedicated Road Fund to pay for transportation projects and leveraging about $3.5 billion from federal and local matching funds.)
Their gaming ideas include recurring proposals to allow a Chicago casino, expand positions at existing gaming facilities and enter a public-private partnership so that private investors manage the Illinois Lottery while the state continues to own it. Newer ideas include allowing video poker, as proposed in HB 4329, which is sponsored by one of Madigan’s assistant majority leaders, Rep. Frank Mautino of Spring Valley. Republicans also mentioned allowing Lottery tickets to be sold online, a proposal previously advanced by Cullerton.
Madigan took gaming off the table last year, but his spokesman, Steve Brown, said this is a new year. However, he said gaming tends to be a regressive source of revenue that usually generates a bunch of hype before falling by the wayside.
Senate Majority Leader James Clayborne said gaming for capital is still on the table in his chamber.
Tax reforms for education and economy
Ralph Martire, executive director of the Chicago-based Center for Tax and Budget Accountability, reintroduced a concept of increasing the state income tax rate and expanding the state sales taxes to cover services. The goal is to reform the way the state pays for public education and to reduce the burden on local property taxes.
Cutting back on state spending during a recession may sound logical, Martire said, but “it is quite clearly the absolute worst thing the state of Illinois could do.”
He joined two leaders in the Illinois Legislative Black Caucus to cite new evidence from Mark Zandi, Moody’s Economy.com’s chief economist, that the idea could help reduce the length of the economic recession in Illinois by preserving thousands of jobs and helping taxpayers spend money in their local economies.
The plan has been proposed in various forms before and would increase state income taxes, expand state sales taxes and provide targeted tax relief to low- and middle-income taxpayers. He added that broadening the sales tax to apply to services could reduce its rate, although it would be a hard sell to Cook County residents who already pay some of the highest sales tax rates in the country.
Sen. James Meeks, a Chicago Democrat and longtime sponsor of education funding reform measures, said Blagojevich is no longer in a position to threaten to veto tax reforms, and Cullerton has been a co-sponsor of such reforms. However, he added, his peers in the Senate likely would not support an income tax increase if it didn’t lead to education funding reform and property tax relief.
GOP budget reforms
By Hilary Russell
House Republicans flatly disagree and say Illinois has a spending problem, according to House Minority Leader Tom Cross.
He joined his GOP Caucus members and John Tillman, chief executive officer of the Chicago-based Illinois Policy Institute, a nonpartisan research organization, to propose budget reforms that would help reduce the $9 billion deficit and increase accountability. Introduced today in a Statehouse news conference, the proposals include:
The Sunshine Act (HB 4134) would create a volunteer commission of four legislators and four members of the public to review each of the state’s executive branch programs. The bill is sponsored by Rep. David Reis, a Willow Hill Republican. The state does not have an accurate list of existing programs, making it difficult for lawmakers to keep track of them, GOP members said.
Reis is also sponsoring the Stimulus Watch Act, which would require the General Assembly’s approval to use federal stimulus funds to create new state programs. Once the funds run out for a particular program, it would end.
“Pay as You Go Spending” (HB 3189), sponsored by Rep. Mike Connelly, a Lisle Republican, would implement a start and end date for new state spending programs. Just to add a program another must be eliminated.
Rep. Darlene Senger, a Naperville Republican, is co-sponsoring a constitutional amendment that would change the required number of votes to raise taxes. Currently, a majority of 60 votes in the House and 30 in the Senate is needed to increase fees or taxes. Senger’s proposal would increase the required number of votes to a “supermajority,” or 71 votes in the House and 36 in the Senate, making it more difficult to pass tax bills.
Rep. Lou Lang, a Skokie Democrat, said that the Republican’s timing was more showboating for their constituents than offering real solutions. “I find it very interesting that whenever there is a public policy decision to be made and the facts are clear that many people look for a political peg to take the chance to hang their hat on rather than take any political risk whatsoever.”
Gun control vs. gun rights
By Jamey Dunn
On the same day that thousands of people came to the Capitol building to participate in the annual gun owner lobbying day, every gun control measure voted on in a House committee advanced to the floor. A feeling of déjà vu was in the air.
Two of the gun control measures that passed through the committee today were proposed last session by the same two Democrat sponsors from Chicago. House Bill 12, sponsored by Rep. Luis Arroyo, would limit handgun purchases to one per person per month. House Bill 165 , proposed by Rep. Edward Acevedo, would ban semi-automatic assault weapons.
Other measures before the committee included House Bill 179, proposed by Chicago Democrat Rep. Deborah Graham, which would require that guns must either be equipped with gun locks or stored in lock boxes around minors. House Bill 180, also sponsored by Graham, would make gun dealers register with the Illinois State Police, who could then do spot checks on the dealers.
Rep. Brandon Phelps, a Democrat from Harrisburg, supports gun rights and is pushing for a few different bills that would allow counties to decide if they wanted to allow concealed carry of guns. One concealed carry bill sponsored by Sen. John Jones, a Republican from Mount Vernon, did not make it out of the Senate Public Health Committee yesterday.
Special elections
Two special election bills were killed today in a partisan showdown in the House Executive Committee. The hearing only included Cross’ special election bill and one proposed by Rep. Jack Franks, a Democrat from Woodstock. Both votes split along party lines. Republicans on the committee were visibly miffed and protested the demise of the bills.
Wednesday, February 27, 2008
The new "tax swap"
Senate President Emil Jones Jr.’s name appears on the list of sponsors of a version of a “tax swap” that would reform the way Illinois pays for public education. His support is a reversal from the Democratic leaders’ alliance with the governor last year but consistent with Jones’ stances in years before that. Support from the chamber leader is a big boost for Sen. James Meeks and Sen. John Cullerton’s measure, but the bill has two main hurdles: 1) Gov. Rod Blagojevich’s expected veto of anything that increases state income taxes and 2) the curse of gaming legislation, or getting so weighed down by trying to please everyone that the bill implodes and goes nowhere.
The measure advanced today from the Senate Education Committee, the first of many public hearings planned for this legislation before it’s ready for a vote by the full Senate.
Senate Bill 2288 is the new Senate Bill 750, but it has major differences. (Some are mapped out by Senate Democrats here. The main difference is that the new version would raise a lot more revenue — $7.2 billion — to do a whole lot more, funding a statewide infrastructure program and paying down state debt. Specifically, highlights include $633 million for early childhood and primary education, $300 million for higher education, $2.9 billion for property tax relief adjusted for inflation each year, $600 million for a family tax credit adjusted for inflation each year, $1 billion for a road and school construction plan and more than $1 billion for state pension and Medicaid debt.
“The goal of this bill is to pay off our debts,” Cullerton said in the committee hearing. He later added, “Not one penny is going to the operations of state government.”
Some Republicans in the committee found that hard to believe, but Cullerton said the sponsors eagerly seek input from the GOP and the House to codify better language. The sponsors still have the same list of supporters and opponents as 750. Most education and labor groups support it. Opponents include business groups and the Illinois Department of Revenue. (One school board in Chicago’s northwest suburbs of Palatine and Schaumburg opposed the property tax relief portion and said schools across the state can’t trust Illinois government to deliver, but those witnesses also said they supported many funding reform ideas in the legislation.)
The way the measure would raise the money is by increasing the personal income tax rate from 3 percent to 5 percent and the corporate rate from 4.8 percent to 8 percent. It also could, although it doesn’t yet, take back $800 million from the portion of the state income tax revenue that local governments currently receive.
On the spending side, the measure lists general initiatives but doesn’t specify where the money would go. Also absent, so far, are “accountability” measures, or safeguards for how state and local governments spend the money as intended. That’s a necessary component for Democratic Sen. Susan Garrett of Lake Forest. She voted “present” in committee to symbolize her concerns. “There has to be oversight. It’s not going to happen with this magic wand. I could never support this, especially from my area, without some major, major reforms.”
Meeks said those reforms are going to be drafted after collecting ideas in a series of public hearings, which is particularly important when “nobody trusts us to do what we say we’re going to do.”
We’ll have more details as they unfold. In the meantime, it’s safe to say this version isn’t going to advance for a while, maybe months.
The governor’s response is, according to an e-mail from spokeswoman Rebecca Rausch: “The push for an income tax increase isn’t new in Springfield. The governor’s position hasn’t changed. He thinks we should cut taxes, not raise them — especially at a time when families are already dealing with higher gas bills, higher prices for goods and stagnant wages.”
Jones’ spokeswoman, Cindy Davidsmeyer, said the Senate president has said and continues to say that he will not call this type of controversial measure for a vote on the Senate floor unless it has enough votes to pass — that’s 30 to pass and 36 to override a governor’s veto. Considering all the work that needs to be done to complete the legislation and all the GOP recruiting that needs to happen before the measure has a veto-proof majority, it’s optimistic to think that the bill could be called for a vote before May 31, as Meeks would like.
The measure advanced today from the Senate Education Committee, the first of many public hearings planned for this legislation before it’s ready for a vote by the full Senate.
Senate Bill 2288 is the new Senate Bill 750, but it has major differences. (Some are mapped out by Senate Democrats here. The main difference is that the new version would raise a lot more revenue — $7.2 billion — to do a whole lot more, funding a statewide infrastructure program and paying down state debt. Specifically, highlights include $633 million for early childhood and primary education, $300 million for higher education, $2.9 billion for property tax relief adjusted for inflation each year, $600 million for a family tax credit adjusted for inflation each year, $1 billion for a road and school construction plan and more than $1 billion for state pension and Medicaid debt.
“The goal of this bill is to pay off our debts,” Cullerton said in the committee hearing. He later added, “Not one penny is going to the operations of state government.”
Some Republicans in the committee found that hard to believe, but Cullerton said the sponsors eagerly seek input from the GOP and the House to codify better language. The sponsors still have the same list of supporters and opponents as 750. Most education and labor groups support it. Opponents include business groups and the Illinois Department of Revenue. (One school board in Chicago’s northwest suburbs of Palatine and Schaumburg opposed the property tax relief portion and said schools across the state can’t trust Illinois government to deliver, but those witnesses also said they supported many funding reform ideas in the legislation.)
The way the measure would raise the money is by increasing the personal income tax rate from 3 percent to 5 percent and the corporate rate from 4.8 percent to 8 percent. It also could, although it doesn’t yet, take back $800 million from the portion of the state income tax revenue that local governments currently receive.
On the spending side, the measure lists general initiatives but doesn’t specify where the money would go. Also absent, so far, are “accountability” measures, or safeguards for how state and local governments spend the money as intended. That’s a necessary component for Democratic Sen. Susan Garrett of Lake Forest. She voted “present” in committee to symbolize her concerns. “There has to be oversight. It’s not going to happen with this magic wand. I could never support this, especially from my area, without some major, major reforms.”
Meeks said those reforms are going to be drafted after collecting ideas in a series of public hearings, which is particularly important when “nobody trusts us to do what we say we’re going to do.”
We’ll have more details as they unfold. In the meantime, it’s safe to say this version isn’t going to advance for a while, maybe months.
The governor’s response is, according to an e-mail from spokeswoman Rebecca Rausch: “The push for an income tax increase isn’t new in Springfield. The governor’s position hasn’t changed. He thinks we should cut taxes, not raise them — especially at a time when families are already dealing with higher gas bills, higher prices for goods and stagnant wages.”
Jones’ spokeswoman, Cindy Davidsmeyer, said the Senate president has said and continues to say that he will not call this type of controversial measure for a vote on the Senate floor unless it has enough votes to pass — that’s 30 to pass and 36 to override a governor’s veto. Considering all the work that needs to be done to complete the legislation and all the GOP recruiting that needs to happen before the measure has a veto-proof majority, it’s optimistic to think that the bill could be called for a vote before May 31, as Meeks would like.
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