[Bumped up for visibility]
*** UPDATE 6 - 6:36 PM *** They’re gonna skip pension payments…
The governor also will propose $850 million in additional state cuts and make a potentially hefty cut in the state’s pension payment, while proposing a scaled-back pension plan for new state hires. Quinn aides would not provide more specifics on those plans.
*** UPDATE 5 - 4:18 PM *** Right on cue…
Former Illinois Gov. Rod Blagojevich released the following statement on the proposal from Gov. Pat Quinn to raise the state income tax:
“This is exactly what I said was going to happen. It is unconscionable that the new governor, Pat Quinn, wants to raise the income tax by 50% especially at a time when people are hurting and the economy is in shambles.
“When Pat Quinn and I ran as a ticket we promised the people not to raise their income taxes. For six years I kept that promise. It took him less than six weeks to break it.”
Former Gov. Blagojevich is not available for interviews and will not be making any other public statements today.
*** UPDATE 4 - 4:02 PM *** I told subscribers about this new $11.5 billion deficit estimate in late February, and recently pointed out the crashing income tax numbers, but this is still astounding…
The state’s budget hole has grown to an estimated $11.5 billion — “an unprecedented tsunami of red ink” — aides to Gov. Pat Quinn disclosed Friday afternoon as the new governor began to sketch out how he proposes to fix the state’s financial woes. […]
At the same time, while promising that Mr. Quinn will unveil $1.3 billion in proposed spending cuts when he introduces his fiscal 2010 budget on Wednesday, they and Mr. Quinn in an earlier appearance confirmed that a state income-tax hike definitely is on the way.
Officials said the tax increase, of unspecified size, would be paired with a tripling of the personal exemption, a combination that would freeze or cut taxes for a family of four if it earned no more than about $60,000 a year, but would require those in higher income brackets to pay more. […]
Over fiscal 2009 and 2010 combined, state revenues from individual and corporate income taxes and the sales tax are projected to be off a projected $3.2 billion — an “unprecedented” decline, according to Mr. Stermer.
At the same time, he said, Medicaid will cost the state an additional $1 billion or so in fiscal 2010, which begins on July 1, higher social services will cost taxpayers an additional $300 million, scheduled employee wage hikes and group health insurance another $300 million, and employee pensions potentially well over $1 billion, depending on possible cost savings..
*** UPDATE 3 - 2:12 pm *** From the AP…
Quinn wouldn’t give specific details Friday on the income rate or personal exemption levels he plans to propose.
But he did give a hint about who would be affected by any tax increase. The governor says a family of four making less than about $57,000 a year won’t see its taxes go up. The less money people make, he says, the more of a tax cut they’ll see.
*** UPDATE 2 - 1:47 pm *** The governor’s comments…
“There will be some that will have a higher tax burden,” Quinn told reporters today during an impromptu news conference at the James R. Thompson Center, adding it would be based on the ability to pay. Quinn said an increase would be part of a “fundamental reform” of the income tax system that would provide tax relief for many Illinoisans. He said that would come from more generous tax exemptions for working families who are suffering amid the nation’s economic decline.
*** UPDATE 1 - 12:38 pm *** From CBS2’s Twitter page…
Gov. confirms taxes will go up for folks earning above 56k in Illinois.
[ *** End of Updates *** ]
* This possible tax hike isn’t as much as some thought, especially considering the higher exemptions…
Gov. Pat Quinn is considering raising the Illinois income tax by 50 percent in a politically risky bid to address one of the biggest budget dilemmas in state history, sources said Thursday.
An increase to 4.5 percent from the current 3 percent tax rate on individuals would include a corresponding hike in the corporate income tax on businesses, according to sources familiar with the new governor’s preparations for his first budget address Wednesday.
The first state income tax increase in 20 years would be cushioned in part by raising the standard tax exemption up to $6,000 per person from $2,000, the sources said. […]
Fee increases for license plate stickers and driver’s licenses are also under consideration by Quinn, sources said. The governor has also emphasized he wants to “cut, cut, cut” state government.
* Meanwhile, my Sun-Times column today is also about the tax issue…
‘I think this economy makes it almost impossible to place an income tax increase on people.”
What Illinois politician said that this week?
Rod “No Tax Hikes on People, But I’ll Gladly Take Your Bribe” Blagojevich?
A Republican?
A conservative “Blue Dog” Democrat?
Nix, nein Frankenstein, as we used to say in Germany.
The answer: Attorney General Lisa Madigan, talking to the Aurora Beacon News.
Has Congressman-in-waiting Mike Quigley’s winning campaign strategy of bashing Todd Stroger’s tax increase spread to the staid, soft-spoken, liberal attorney general?
This is the same Lisa Madigan, after all, who fumed at Rod Blagojevich last year for vindictively slashing her office’s budget to the marrow. Now, she wants every other state agency subjected to the same cruel slash?
After waiting around all day for a response, Madigan’s spokeswoman finally called to explain that her boss really meant to say all other options should be looked at before any tax increase was proposed.
That’s not what she said, but whatever.
So, I asked, does Lisa Madigan support a tax hike?
“She’s waiting to hear what the governor proposes in his budget address next week.”
Is she open to a tax hike?
Same answer.
The message seems to be clear, however. She’s reserving the right to bash Gov. Quinn for raising taxes during an economic downturn.
Tax-increase foes have valid economic points, but too many fail to see the plain, hard facts.
There are those who say that the state’s budget deficit is about half or even less than half of the $9 billion to $12 billion estimated by Comptroller Dan Hynes and Quinn. All we need to do, they say, is cut $4 billion to $5 billion this fiscal year and again next fiscal year and the problems are solved. Poof.
What those folks never mention is that there are about 100 days left in the current fiscal year. Cutting $4 billion to $5 billion by June 30 would require turning out all the state’s lights. Open up the prison doors, lay off all the cops, no school payments, no Medicaid, no driver’s license facilities, no parks, no road repairs, no aid to local governments, no attorney general . . . no nothing, except for a skeleton crew to process our tax payments. And that still probably wouldn’t be enough.
We simply cannot cut our way out of this deficit. We shouldn’t fully tax our way out, either, of course. Real cuts should be made. But there are no magical solutions, and Lisa Madigan most certainly knows it.
This week, the two Republican state legislative leaders called for more gaming to fund a multi-billion-dollar capital construction program. It’s a pipe dream.
Quinn is widely expected to propose an income tax increase to help balance the budget, so Madigan’s tax comment was probably predictable. Madigan can sit back and let her father, House Speaker Michael Madigan, push through Quinn’s tax increase and then reap all the populist benefit.
But Madigan in the role of the angry white tax-hater and lifelong populist Quinn as the bumbling Strogerish incumbent?
Seriously?
Well, Blagojevich did win his first election as a reformer, so I suppose anything’s possible with enough campaign money.
I just can’t see it. And I sure hope Madigan doesn’t try.
…Adding… I just noticed that something got cut for space. It was a couple sentences after “This week the two Republican state legislative leaders called for more gaming to fund a multi billion dollar capital construction program. It’s a pipe dream.” Here’s what was edited out…
MGM spent almost a billion dollars to put a casino in downtown Detroit a couple of years ago. Those days are over. MGM’s stock price has lost 90 percent of its value since last summer and the company is in danger of defaulting on its debt. MGM is far from alone in the industry.
* Related…
* Illinois Republicans call for more gambling to raise revenue
* Quinn says he’ll push to boost education funding in Illinois
* Illinois governor tells teachers he’s with them
* Quinn pushing for overhaul of state’s tax system
* U of I assembles budget forecasting model
- Taxman - Friday, Mar 13, 09 @ 10:30 am:
I wanted to re-post this from the initial morning thread:
If Quinn raises the income tax by 50% its political suicide. He is playing into the Madigans hands. Especially after Lisa said it was not a time to raise taxes on working people. Lisa will run for Governor on this issue: Quinn raised your taxes instead of cutting government waste. Quinn made the people of Illinois pay for the mistakes of government.
Id be very weary of any advice from the Speaker.
I want Quinn to succeed because he seems like a decent man, if not politically naive. Doesnt he see what is going on?
- Zounds - Friday, Mar 13, 09 @ 10:34 am:
Can’t wait to see Quinn the Patsy go down for this next spring.
I predict this is going to be the fastest tax hike in Illinois history. Mike Madigan is going to rush this through as fast as he can, debate will be limited a la AllKids.
Then the demolition of Quinn begins in order to make way for Lisa. Madigan as guv, Madigan as speaker, Tax hike + Stimulus Money + Olympic Money + Improved economy….hello to political enslavement, folks
Blago called this one on the nose.
- Amy - Friday, Mar 13, 09 @ 10:36 am:
woa. you sure hit it the way you hoped that other journalists would hit it. here’s hoping that the line of questioning will continue….if not this tax hike then what cuts Lisa? or what other revenue generator? she can’t have it both ways.
- DeKalb Dragon - Friday, Mar 13, 09 @ 10:48 am:
As you point out, last July Lisa was crying about her budget being cut. Specifically, she stated, “We won’t be able to fulfill our constitutional, statutory or ethical obligations to the state,” Madigan told Crain’s. “We’ll have fewer resources to help people.”
She needs to be careful about how she plays this. She is on the verge of hypocrisy, if not there yet. I don’t believe she can succeed by denouncing a tax increase, but fighting budget cuts to her office. That is a rather Blagojevichian approach - provide service without paying for it.
- Cassandra - Friday, Mar 13, 09 @ 10:50 am:
So, I calculate that a family w/2 kids making a little above fifty thousand federal adjusted gross will start to see an actual tax increase with the numbers proposed. The same family making eighty thousand would pay a few hundred more?
Looks like a middle class tax increase to me. We need a chart, though. Maybe the U. of I. folks doing the forecasting model could make one for us.
As to those increased corporate taxes…I note that Obama is talking about lowering the corporate tax rate. Crazy. Of course, they aren’t a sure thing. Will Illinois corporate interests fold or will they fight.
Looks like the middle class will be losers here but not sure who the winners will be. Retirees for sure. Pensions aren’t taxed in Illinois. All those school administrators and principals who reired with six figure pensions courtesy of us won’t feel a thing.
- wordslinger - Friday, Mar 13, 09 @ 10:53 am:
I would think Quinn is smart enough to get any potential primary challengers on board with the final plan. If they won’t get on board, he should scream loud and long that they need to put their own plan down on paper for the world to see.
This thing is too big. I don’t think you can hide with a bunch of platitudes about efficiencies and cutting waste.
- Back of the envelope - Friday, Mar 13, 09 @ 10:58 am:
What will an income tax increase of 1.5 percentage points really raise? 5 billion gross?
Then lop off 10 percent for local gov’t share, you’re at 4.5 billion.
How much will the larger exemption cost? A billion or more? You’re down to 3.5 billion net, tops.
Also GQ wants to pay for capital from this? The math doesn’t seem to work.
Why the heck would legis take a tough tax vote but not raise enough revenue to solve the budget problem? End up back in the same pickle next year?
- TT - Friday, Mar 13, 09 @ 10:59 am:
Lisa is covering her tracks for gubernatorial campaign.
- Sad - Friday, Mar 13, 09 @ 10:59 am:
Poor Pat Quinn I really feel sorry for him it just isn’t fair. He gets elected in 2006 with Blago’s 25 Million in Pay to Play campaign. Defends Rod for accepting a $1500 dollar gift from a future job holders husband. When Rod is arrested in the most self serving effort calls for Blago to step down so he can be the Governor. Poor poor Pat he is the Governor that is being brutalized by Lisa Madigan. Can’t someone find a way for poor old Pat to have his cake and eat it?
- Phineas J. Whoopee - Friday, Mar 13, 09 @ 11:06 am:
Sad, we will find a way to help poor Pat Quinn-by getting him elected for another term.
- Niles Township - Friday, Mar 13, 09 @ 11:12 am:
Everyones knows we need a tax increase. We needed one 5 years ago. Too bad Blago left us in this position, but I am willing to reward Quinn’s political bravery with my vote. Ogilve he may become, but when history is reviewed, Quinn will look good, while the too political Lisa Madigan will look sorry.
- dave - Friday, Mar 13, 09 @ 11:15 am:
–I want Quinn to succeed because he seems like a decent man, if not politically naive. Doesnt he see what is going on? –
Maybe Quin actually wants to solve some of the State’s problems instead of constantly worrying about running for office.
No tax increase is going to start out popular, but one is obviously necessary. And Pat Quinn is willing to make the touch choice to do so, even if it could hurt electorally.
And, BTW, do you really think that a Quin proposed budget that slashed programs would be good politically? He doesn’t have good options.
One more thing - if this is messaged well, and if there is outside support to build state-wide support for an increase, it could actually be a good political move. Many economists believe that cuts are much more harmful in a recession than tax increases are. And voters are capable of understanding that, if it is messaged well and communicated well.
- Rich Miller - Friday, Mar 13, 09 @ 11:15 am:
===Why the heck would legis take a tough tax vote but not raise enough revenue to solve the budget problem? End up back in the same pickle next year?===
You missed a key sentence. It’s something I’ve been telling subscribers about…
===Fee increases for license plate stickers and driver’s licenses are also under consideration by Quinn, sources said.===
- Back of the envelope - Friday, Mar 13, 09 @ 11:19 am:
===Fee increases for license plate stickers and driver’s licenses are also under consideration by Quinn, sources said.===
And how much could that possibly raise?
- Sad - Friday, Mar 13, 09 @ 11:22 am:
Whoopee, Sometimes we forget that thier is the world of insiders (thats us) and the real world (John & Jane Q. Public)and as much as we squint our eyes and shake our fists the bottom line is the one who does whats right in the eyes of the voters win. So we shall findout in February whose right. Good Luck.
- Rich Miller - Friday, Mar 13, 09 @ 11:23 am:
Lots.
- ThreeSheets - Friday, Mar 13, 09 @ 11:24 am:
By my calculation, a $50K AGI minus the exemptions at the old level (2000 * 4) and tax rate of 3% gives a tax of $1260. By raising the exemption to 6000 and the rate to 4.5% the tax actually goes down slightly to $1170. At $80K, the tax goes up only $360 or $30 month.
After 20 years of no increase, I don’t think that is all that high and certainly affords some cushion to the middle class.
Someone with an AGI of $200K however gets a much bigger hit. Their tax will goes up over $2K, so I’m not so sure Cassandra’s class type statements have to much effect.
Keep in mind, I’m not an accountant or math-guy. All math is also subject to the disclaimer that I am not too bright anyway.
- Go Duke.. - Friday, Mar 13, 09 @ 11:24 am:
Rich, former Gov Rod “stole”, and yes he did steal it!, stole money out areas such as the specialty license plate funds. Are those areas being funded again? Do you think Quinn will do the same?
- VanillaMan - Friday, Mar 13, 09 @ 11:26 am:
Quinn needs to start doing an ‘84 Mondale, and do it right…
“By the end of my term, I will reduce the Blagojevich deficit by two-thirds, by cutting programs and waste, and by…well, you know I always tell the truth. Anyone in my position as governor who honestly looks at our dire situation will raise taxes. As will I.”
“But before I do this, I pledge to you, that I will ensure that every other way to cut our deficit is implemented first. I will not ask for more from you than is absolutely necessary. First, I will demand that costs are slashed, cuts are made, and that everyone sacrifices equally, before I even consider asking for another dime from you. I’m sorry, it must be done. Now, some pundits out there claim I will lose your support with this honesty, but in my long public career, I’ve learned it is better to treat my fellow citizens as adults.”
“After years of criminal behavior by my predecessors in this Office, I understand your anger and cynicism. To win back your trust in this government, I believe I must continue being open, honest and willing to tell you the hard truths, so that we can effectively come together to end this crisis.”
“Now, you can vote for one of my opponents who will spin our problems away and won’t tell you the whole truth, or you can vote for someone who just did.”
If Quinn makes this kind of honest statement, and follows through with a commitment to take every cut, slash every program, and publically lead on belt-tightening first, he can withstand any political attacks for raising our state income tax modestly.
He has a quandary. He has inherited two huge catastrophes - one is budgetary, but the other has to be tackled first. Governor Quinn has to publically demonstrate that a corner has been turned with Illinois Democrats. They must publically demonstrate a commitment to reform, efficiencies, and lead by example by slashing programs and cutting state costs, before demanding more of our money. Illinoians haven’t seen real change in their state government’s wasteful ways. We will not accept a tax increase until we see improvements in this crappy government first.
- Anonymous - Friday, Mar 13, 09 @ 11:26 am:
“….including new exemptions to help low- and middle-income families.”
What are the rules for these tax exemptions? How is “middle-income” defined in the proposal? Why are they not trumpeted as clearly as the claim for reducing the tax burden? This smells tremendously like a middle-class increase to me, despite claims that it is “progressive.”
- Back of the envelope - Friday, Mar 13, 09 @ 11:40 am:
I don’t see it. There are about 8.5 million licensed drivers. Only 1 in 4 renews their DL in any year, that’s 2 million renewals. A renewal now costs 10 bucks - double that even and you raise $20 million. Peanuts.
Now imagine there are 8 million licensed cars in the state. That has to be way too high, but for the sake of argument. Standard sticker fee is now $78. Can’t imagine they could double that, but even if they could, it’s what, half a billion?
Rich, these fees don’t do it.
The income tax really needs to go up 2 percentage points and they have got to look at fixing the kooky sales-tax structure too.
- Rich Miller - Friday, Mar 13, 09 @ 11:43 am:
=== Rich, these fees don’t do it.===
That’s because you’re only looking at two fees and modest increases in both.
- Greg - Friday, Mar 13, 09 @ 11:45 am:
==Many economists believe that cuts are much more harmful in a recession than tax increases are. And voters are capable of understanding that, if it is messaged well and communicated well.==
huh?
- Back of the envelope - Friday, Mar 13, 09 @ 11:46 am:
I’m looking at the two fees you cited and I am doubling them! But whatever. I’m sticking to my guns. Like Brandon.
- Laborguy - Friday, Mar 13, 09 @ 11:48 am:
Everyone is missing the most interesting fact here, which is that AG Madigan “walked back” her earlier strong statement against an income tax increase. Seems to me there might have been a conference call with the Speaker to find out what her position should be. This will be an ever-growing issue once Lisa announces she is running for governor. What policy positions will Lisa take vis-a-vi her fatrher, Speaker Madigan? Will she coordinate her messege with him? Will Speaker Madigan alter his legislative strategy to help accommidate AG Madigan’s political ambitions? I think reporters are going to start asking these types of questions more regularly and more loudly. Our AG better figure out how she is going to answer them, and quickly. Good job Rich. I hope you keep up the questioning.
- dave - Friday, Mar 13, 09 @ 11:57 am:
== huh? ==
Greg… start here:
http://www.cbpp.org/1-8-08sfp.htm
Pingback Extreme Wisdom » Blog Archive » Pat Quinn committing political suicide - Friday, Mar 13, 09 @ 12:11 pm:
[…] Over at Capitol Fax, Rich Miller is posting on Quinn’s push for a 50% increase in the income tax. This is political suicide. […]
- Scooby - Friday, Mar 13, 09 @ 12:17 pm:
Back of the Envelope, I had the income tax increase worth about $1 billion more than you do, but I think you’re essentially in the ballpark on the rest. And so you’re right that it’s not big enough to close the gap. I had heard that the fee increases along with the loophole closings were to be used to pay for the capital bill, so you still have about a $4-5 billion hole. That will either take massive cuts or I guess the other option is just to leave the Medicaid backlog where it is.
And if Quinn is really going to get burned by his political opponents he should sunset the tax increases for the day after the next inauguration. If somebody is going to beat him on the tax issue, then you might as well stick them with the same problem.
- Ghost - Friday, Mar 13, 09 @ 12:19 pm:
The problem created by blago is the myth that becaue he was corrupt, their is stuff left to cut in State governemnt. Blago had been gutting the State for years. Many areas of the State are running innefficnelty because of over cutting. There is not much left, Blago raided the place before he was ousted.
I would put in a license plate fee system similiar to colorados, based on the value and age of the vehicle. this way folks with lower incomes and modest cars will not be hit, but those with greater incom who are driving newer/more expensive vehicles will cary the burden.
- Irish - Friday, Mar 13, 09 @ 12:24 pm:
Thank you Rich for trying to educate the populace on why cut, cut, cut, doesn’t work. This article and your exercise with the QOTD on finding enough areas in the budget to cut illustrates that we cannot cut our way out of this mess. Yesterday’s post on what overtime cost IDOC when they reduced staff also plainly shows that it costs more to provide the same services with less staff than it does to leave the staff in place. If a study were done on the recent Park closings I know that would also show that there were no savings and in fact an increase in costs and loss of revenues by closing the sites. Illinois has one of the lower state income tax rates of any of the surrounding staes and they do not have the areas like Chicago and East St. Louis where infrastructure maintenance and poverty cause a drain on State Funds. The old adage is true, you get what you pay for and by not increasing income taxes in 20 years and adding new programs we have put ourselves in this mess. Thank you Pat Quinn for having the backbone to not only say the T word but actually act on it. And shame on Lisa for using this as a pre campaign issue. She should be careful it might just backfire on her, because I have not heard many people who are against a tax increase. Many wonder what took them so long. And as far as the Republicans are concerned their last two governors probably had the biggest construction programs in State history with “Build Illinois” and “Illinois First” which were the root of the no pension payments and other committments that put us into this situation. They have no room to criticize.
As a State employee I thank you for putting the facts out there. You won’t hear this kind of honest coverage in any other media outlet in the State.
- steve schnorf - Friday, Mar 13, 09 @ 12:34 pm:
Envelope, I have only one caveat with your analysis. There are probably about 12 million registered vehicles, and the license fees on some of them are fromm the $100s to the $1000s per year.
- Kevin - Friday, Mar 13, 09 @ 12:36 pm:
They would not neccasarily have to raise the corporate tax rate if they make the tax some sort of secondary tax. Secondary tax probably being personal property replacement tax just like C-Corporations, S-Corporations, Partnerships/LLCs, and Trusts. In essence the personal property replacement tax is based on income but is excluded for the 8 to 5 ratio mandated in Acticle IX Section 3. The exclusion of the personal property replacement tax is in Section 5. The replacement tax is only different from an income tax in it the name they gave it.
Currently, S-Corporations and Partnerships/LLCs pay a 1.5% personal property replacement tax and no income tax as the income passes through to the Shareholder/Partner/Member. C-Corporations pay a 2.5% personal property replacement tax in addition to a 4.8% income tax (8 divided by 5 times the 3% individual income tax rate) for a combined rate of 7.3%.
Also, if they raised the individual income tax rate to 4.5%, they could lower the replacement tax percentage to 0.1% which would leave that cominded overall tax rate to C-Corporations remain at 7.3%. Otherwise, C-Corporations would be paying 9.7% in overall taxes based on income.
- Leave a light on George - Friday, Mar 13, 09 @ 12:55 pm:
“There is not much left, Blago raided the place before he was ousted.”
Ghost, I’m with you to a point. Yes, we need an income tax increase to fund just the basics. However, not only did Blago raid the joint those he sent to raid are still in place. Quinn has got to get rid of them before before the new tax money starts to flow. Otherwise they’ll just continue with their old ways of patronage and feathering their own nests.
- Ghost - Friday, Mar 13, 09 @ 1:05 pm:
There are definelty a few people who need to be cleaned out, Adams and crew etc. But these to me are not really cuts, since most of the positions need to be staffed.
- Capitol View - Friday, Mar 13, 09 @ 1:09 pm:
paying past due bills should be our highest obligation and first priority in where new revenues should go. We not only have old bills, we have substantial borrowing to pay other past due bills earlier this year.
Dollars from drivers should go to the Road Fund for long overdue road and bridges projects. But GRF should go first to the overdue bills, to end the era of Illinois state government being the biggest deadbeat in our entire economy.
- fed up - Friday, Mar 13, 09 @ 1:10 pm:
Quinn doesnt have a leg to stand on he is part of the problem he supported Blago in 06 when he knew damn well Blago was corrupt. Did he open his mouth or want off the ticket nope he kept his mouth shut and kept cashing the paychecks. They can raise taxes when they actually make real changes. IE getting rid of Lt Govs office, combining the treasarur and comptrollers office, it is a joke to raise taxes when there is so much waste and corruption. Quinn can get voted out with the man he respects so much Rolando Burris. He was silent about blago and then was afraid to stand up for the state in the Burris fiasco after being told to shut up by the citys black alderman. yeah he has shown himself to be a real leader.
- cynically anonymous - Friday, Mar 13, 09 @ 1:24 pm:
Ghost - if by Adams and crew you mean DHS, there are a whole lot of positions that were created by the previous administration that definitely would not have to be staffed…and if that’s true for other agencies that got “top loaded” with folks earning over $100K annually - it may be a drop in the bucket - but enough of those drops will fill the bucket.
- Pot calling kettle - Friday, Mar 13, 09 @ 1:27 pm:
Cassandra said: “Looks like the middle class will be losers here but not sure who the winners will be.”
The middle class is already losing as the state slowly falls into disrepair.
I make right in the range that will pay a few hundred more and I am happy to pay it IF it is used to staff the prisons at appropriate levels, fix the infrastructure, increase funding for education (K-12 and higher ed), and bring the DNR back up to par. I am going to be watching very closely where that money goes, as are most Illinoisans (I hope). If the tax increase passes, Quinn’s chances in 2010 will rest on how that money is spent. If it can be construed by any primary or general election opponents as wasted, he’s toast. If he can show pictures of school construction and clean parks, he’ll be fine. Not much time to do all that, so it should be an interesting year.
And voters will be looking. Tax forms arrive in the mail just before the primary election.
- Cassandra - Friday, Mar 13, 09 @ 1:27 pm:
But wait…families making about $80k are poor enough to get Medicaid but rich enough to pay several hundred more in more state income taxes? Could we have a little consistency here.
- Rich Miller - Friday, Mar 13, 09 @ 1:39 pm:
===families making about $80k are poor enough to get Medicaid but rich enough to pay several hundred more in more state income taxes? ===
You’re talking about families that can’t afford to spend thousands and thousands of dollars per year, for whatever reasons, on health insurance getting a little assistance that they hep pay for via a state program, versus a few hundred dollars a year.
Your logic sucks.
- North by Northwest - Friday, Mar 13, 09 @ 1:50 pm:
It would be nice not to have to raise taxes in a recession, but states like Illinois have this pesky constitutional requirement to balance their budgets. And unfortunately, we’ve had 20 years of hidden deficits and smoke and mirrors in Illinois from irresponsible governors and an irresponsible legislature. The debts are sky-high, the state is a deadbeat, and the two-year deficit is $20 million.
So Madam Attorney General, what is your solution?
At least Quinn is apparently going to offer a host of reforms–spending cuts, big pension reform (long overdue), and a more progressive tax code.
- Anonymous45 - Friday, Mar 13, 09 @ 1:51 pm:
Rich: Call your dentist and ask for some tylenol with codeine and some antibiotics too. RUFF!!
- George - Friday, Mar 13, 09 @ 2:28 pm:
Families at $80k don’t get medicaid. They get All Kids, and pay premiums.
Its this idea that the benefit they receive is on a sliding scale - pay based on what they can afford. They make more, they pay more for All Kids.
Kinda like taxes - you make more, you pay more.
So, Cassandra, it is actually the exact same logic.
- Fan of the Game - Friday, Mar 13, 09 @ 3:03 pm:
I’m not sure I understand the concept here. I am likely being thickheaded but I want to make sure I understand before I comment. The facts as I know them:
1. Gov. Quinn wants to raise the state income tax to a flat rate of 4.5% for everyone.
2. He also wants to triple the personal exemption.
3. The increase of the exemption would ensure that those making less than $56K would not see an increase in the taxes they pay.
4. This would force those who make more to pay more. This effectively circumvents the constitutional requirement for a flat tax.
Is this the way it is? The original article I read said the governor wanted to increase the tax rate for those making over $56K, but that didn’t seem right to me.
- George - Friday, Mar 13, 09 @ 3:20 pm:
Your facts are correct, Fan.
- Cassandra - Friday, Mar 13, 09 @ 3:26 pm:
Allkids is Medicaid.
And I’m the one who is for universal affordable health care, with government subsidies remember.
My point here is that the cutoff should be at or closer to $80,000 or $100,000, not $56,000 for an average family. How do you fairly gauge what constitutes a reasonable standard of living for a middle class family today. Politicians have apparently forgotten how much it costs to live in the real world now, especially if you don’t have free retiree health care and a defined benefit pension waiting. And even more so if you have to pay your own health insurance and for the kids’ college.
As to the flatness of the proposed tax, I guess it’s flat because everybody gets the same amount of deduction. I imagine Quinn’s people decided that would take care of any constitutional challenge, since deductions are not prohibited by the state constitution.
- Ann O'Namus - Friday, Mar 13, 09 @ 3:39 pm:
My tinfoil hat isn’t working today, so somebody explain this for me. How does one deduce a broad Madigan-family conspiracy from a phrase teased out of a far-reaching discussion of mortgage failures, where she is doing no more than acknowledging an obvious political reality? Or will the state senators all be thrilled to pass a tax increase that their Republican opponents will hammer all Dems with at the next election, while running ads that also picture them with Blago?
I must be using the wrong kind of foil, because I can’t read LM’s mind that easily.
- George - Friday, Mar 13, 09 @ 3:40 pm:
Cassandra - here is where your logic falls off:
Remember, every child is able to get All Kids, regardless of income. It isn’t capped at $80k. You are arbitrarily drawing a line at $80,000.
Families that make $300k or $1 million are still eligible for All Kids. They just pay a lot more, and in effect subsidize the program.
Where All Kids is free is if your income is below the poverty line.
What Quinn is essentially doing with the exemptions is saying nobody gets taxed on any income below the poverty level.
It is actually a near identical structure.
- George - Friday, Mar 13, 09 @ 3:46 pm:
Ann - its not a cooky conspiracy. Its been pretty much the understood reality of what the Madigan plan was for many years now.
Go back and look at comments on this blog from last year about Speaker Madigan trying to pass an income tax increase (Mike Smith’s proposal, e.g.). Look at posts about Madigan’s numerous comments about the need for an income tax increase.
Everyone has known that the Speaker wants to get an income tax increase passed BEFORE his daughter becomes governor - that way, she can ride in and get the benefit without doing any of the tough work.
- Ken - Friday, Mar 13, 09 @ 4:23 pm:
Democrats made this mess. Democrats will raise taxes. Look for businesses and people to leave the state for lower tax states. That means lower revenue. We are headed in the direction of California. Isn’t it wonderful living in such a blue state. Sure makes me feel blue.
- Justice - Friday, Mar 13, 09 @ 4:39 pm:
The more things change the more things stay the same. Ugh! I have had it!!!
- Milorad's microphone - Friday, Mar 13, 09 @ 4:42 pm:
More importantly, what does Drew Peterson think?
- Niles Township - Friday, Mar 13, 09 @ 4:43 pm:
Wish Rod would just crawl back into that hole, and stay there! The state has moved on, you should too (at least until Pat puts you behind bars).
- Niles Township - Friday, Mar 13, 09 @ 4:44 pm:
Pat Fitzgerald, that is.
- Anonymous - Friday, Mar 13, 09 @ 4:48 pm:
Irish - the analysis yesterday of overtime shows the OPPPOSITE of what you claim. The cost of overtime was $30 million plus. The cost of keeping 4000 employees in places would have been over $200 million! Reducing staff and supplementing with overtime actually saved the state a bundle. Probably even more when you take health and other benefits into account.
- Princess - Friday, Mar 13, 09 @ 4:49 pm:
Statement from ol’ Rod. Pfft. Princess’ statement back to Blago: ” I think a few bills outta my pocket more each month is well worth being rid of you.”
- dupage dan - Friday, Mar 13, 09 @ 4:55 pm:
I certainly hope that come election time people don’t forget that Pat Quinn was cutting while raising taxes. Lisa Madigan is engaged in demagoguery by saying tax hikes are wrong. Of course hikes are wrong! What else can be done but cut as much as you can and then raise the taxes? It stinks, it sucks but there it is. I would hope a good republican can come out the horror that is the GOP here come the next gov election but would rather vote for someone who cares more for the state than for his career than for a game player like Lisa Madigan, even if it means voting for a democrat. Get ready for the Madigan buzz saw. It’s comin’.
- The Doc - Friday, Mar 13, 09 @ 4:56 pm:
Ah yes, all of this on Friday the 13th - how appropriate.
IL needs new revenue streams. Desperately. And a relatively modest income tax rate increase seems reasonable and appropriate, given the fiscal crisis. Yeah, the timing sucks, but there’s never a good time to increase taxes, fees, and fines, unless you’re Mayor Daley, at which point raising taxes and the like is a moral mandate.
I do sincerely hope that Quinn frames this issue in a context that all can easily grasp, and that appropriate budget cuts and elimination of programs are implemented in a fair manner.
I also worry about the affect this increase will have on state businesses, seeing as how a number of companies have fled our borders despite a relatively low corporate tax rate and throwing gobs of tax credits and TIF dollars around.
We’ve heard Quinn speak at length about helping families and workers, but not so much about the employers. That needs to change.
- Gina - Friday, Mar 13, 09 @ 5:11 pm:
Say goodbye to Suburban Rep’s Walker, Froehlich, Crespo etc.. if this tax raise goes thru.
If Quinn raises taxes with Madigan’s backing, I predict the GOP will pick up 10+ House Seats in 2010.
- zatoichi - Friday, Mar 13, 09 @ 5:17 pm:
Quinn (and anyone else in the Gov’s chair) faces a no win situation. No matter what he does it will not be enough and too much at the same time for different groups. If the revenue keeps dropping, at some point the state’s checks start bouncing because there simply are not enough bucks for all the things people want. Costs keep raising no matter how much you like it. We just got an 18% health insurance hike. What do we drop or no longer pay to cover that cost? The politicians can jockey for whatever position they want and throw any sound bite out they need to look good. It will not change until those pesky hospitals, schools, social service agencies, road contractors, state parks, and many other service providers start to close and their employees (who are not state employees) move to unemployment because the bills cannot be paid and then off the tax roles. Some serious choices must be made which are going to anger many people. Madigan can dance and jockey all she wants, someone has to step up and make a long string of very tough decisions. I can’t wait to see who will step up and who will simply complain.
- dupage dan - Friday, Mar 13, 09 @ 5:21 pm:
The Doc,
I agree there is no good time. Businesses will likely be hurt. As a state employee I want to do my part as long as I feel it is doing some good. It is imperative that businesses feel as tho we are in a temporary situation and that proper measures are taken so that the burden is spread evenly. Loss of business will only make this worse.
- Justice - Friday, Mar 13, 09 @ 5:24 pm:
Rich, I seem to have another poster using my nickname? If they are bright and witty, no problem. I had hoped to keep my nickname until after blago was sent to prison at which time I would change it to “Very Happy.”
- BIG R.PH. - Friday, Mar 13, 09 @ 5:43 pm:
Ah yes Tax and Spend, Spend and Tax. That’s the Democrats way!
You voted for it and now you got it. Just wait to the Obamanator gets thru with his little “vision of the future”.
Has anyone thought about looking at our neighboring states to see what there corporate Taxes are?
In this day and age how hard would it be for a corporation to set up an “office” across the border. And if you are going to force corporations to make that choice what will stop them from setting up shop in Florida, Delaware or Nevada (For all you tax & spenders those are corporate tax free states where they actually promote business instead of penalizing it)
How about this proposal:
Higher education (that would be college or university level) instead of the blank check they get now go to the student and give them a voucher for 20% less than what you are paying on average now and tell them to go find an education and if the price is less they can pocket the difference. Watch them head to the community colleges. $2 Billion easy
Secondary and Grade School Education. What are we spending now $8000/kid? Here is a voucher for $5000 per kid. It costs $4000 at a parochial/private school. The private schools clean up and the taxpayers save another $2 Billion.
Pensions. Cap them or tax them! And if they are saying that 56K is now rich there is your cap and/or tax target. There is another $2 Billion.
Medicaid. How about DHS actually gets off their lazy butts and investigates these people. I’m tired of watching these folks drive up in their Escalades, talking on their I-Phones and whipping out their Medicaid/All Kids cards and getting health care for free. Their is about $4 Billion right there.
Looks like problem solved.
The last one to leave can turn out the lights!!
- North of I-80 - Friday, Mar 13, 09 @ 5:52 pm:
Ken - we are headed toward Michigan. Same pattern of Dem leadership in Gov office, legislature, big city mayor & uncontrolled spending…. all fixed by increased taxes.
- Bobs yer - Friday, Mar 13, 09 @ 9:35 pm:
For the past 7 years, Illinois (mostly Chicago) Dems have had free reign to spend money on flakey causes. If Gov. Quinn is bringing any wisdom to the table now, he will re-evaluate the worst of these to bring back fiscal sanity. We’ll see.
There are things that every level of government are responsible for. States should first make sure that bad guys are kept away from society, then make sure roads and bridges are built and maintained, and always use its police powers to protect the citizens. The State should not attempt to duplicate the functions of the Feds.
The first educational initiative of the Blago dems was to give tuition breaks to illegal immigrants. Why? Can we still afford this?
The Blago dems then passed a bunch of social and health care programs to benefit Emil Jones and his crew. Why? Can we still afford this?
Blago also implemented a bunch of arbitrary spending programs, such as the free mass transit for seniors. Why? Can we still afford this? Could we ever?
If the new Governor raises taxes without cutting out all the ‘goo-goo’ stuff wrongfully implemented, duplicative of federal programs and benefitting only the most nonproductive, he will fail.
Think about it gov. Undo the stupid spending of the last 7 years, or be identified with those who made it happen.
- dave - Friday, Mar 13, 09 @ 10:00 pm:
== Look for businesses and people to leave the state for lower tax states. That means lower revenue. We are headed in the direction of California. ==
Ugh. You do know that Illinois has one of the lowest tax burdens in the country, right?
- Mighty M. Mouse - Friday, Mar 13, 09 @ 10:07 pm:
===- Scooby - Friday, Mar 13, 09 @ 12:17 pm:
And if Quinn is really going to get burned by his political opponents he should sunset the tax increases for the day after the next inauguration. If somebody is going to beat him on the tax issue, then you might as well stick them with the same problem.===
March might come in like a lion and go out like a lamb, but come the middle of March Gov. Pat Quinn would love to pull a Houdini and get the elephant in the room (income tax increase) to “disappear.”
- ahem - Saturday, Mar 14, 09 @ 6:24 am:
Pat Quinn is doing the right thing: dealing with reality, which seems to be an impossibility for Blago. Blago should muster some of that “testicular virility” and shut his pie hole. We can only hope that the slammer will eventually shut it for him, at least for a while. Regarding the Illinois income tax, I never thought it was that much of a bite from my income; let them raise the rate. According to the Trib story that I saw, each resident’s share of the deficit is $10,000.00, which is insane.
- THE CARDINAL - Saturday, Mar 14, 09 @ 8:17 am:
Someone stealing your moniker is just wrong! Same with raising taxes that are not going to be enough to fund education and get the burden off property taxes. Take the hit once get the money you need and leave us alone for the next ten years. Fix the roads and buildings while your at it. Just no wasteful special interest spending
- wordslinger - Saturday, Mar 14, 09 @ 9:20 am:
Businesses move out of Illinois because of state taxes? Really? What kind of businesses, and where do they go?
I read on another thread that you can’t get high-speed Interent or decent cell phone service in Southern Illinois. Not a lot of businesses looking to relocate to areas with no infrastructure.
- David - Saturday, Mar 14, 09 @ 12:51 pm:
First a short note to Rod: “Shut up and go away. You’re not in charge anymore.” And to Pat: “As a State employee I pay my own pension contribution - It sure as hell better land in my account.”
- Tax Opponent - Saturday, Mar 14, 09 @ 4:51 pm:
But to make it fair, start taxing pension payments to the retired.
- prahn - Sunday, Mar 15, 09 @ 9:02 am:
The Doc,
I agree with your statement. The timing is not the best; however, when is? We all have to do our part in helping our Gov. turn this state around, get us back in some black ink.
The business sector is great concern. I agree with you, Quinn needs to propose something in the way of helping grow small business in our state. It’s hard enough for anyone to start up a new business anywhere in the state, and even harder if you’re already in business trying to cut pay checks.
Maybe in all of the governments cuts we can find some help for them.
- Crickets - Sunday, Mar 15, 09 @ 5:14 pm:
on your most recent post, Rich, that’s an AP story, not a Trib story (about Burris @ the southside parade); staff cuts must have prevented the city’s largest paper from sending their own reporter.