Thread: Doomsday Arrives for State of Illinois; Insane Tax Hike Prop

Monday, February 22, 2010

Doomsday Arrives for State of Illinois; Insane Tax Hike Proposals; Watchdogs or Warthogs?

In a flash of recognition that readers of this blog understood years ago, a nonpartisan group proclaims 'Doomsday is here for the state of Illinois'. http://www.suntimes.com/news/maxedout/2 ... 22.article

It will take a massive tax increase -- and $2 billion more in cuts -- to reach solvency, group says.

To become solvent, the state must enact the largest tax-increase package in Illinois history, whack another $2 billion from already starved government programs and wrest major financial concessions from the state's unionized work force, a nonpartisan government watchdog contends.

In a new analysis of Illinois' "horrific" finances, the Civic Federation lays out the painful choices awaiting Gov. Quinn and the Legislature as they stare down an epic $12.8 billion budget deficit that has choked the flow of state cash to public universities and schools, transit systems and social-service agencies to the point of economic collapse.

"Doomsday is here for the State of Illinois," said Laurence Msall, the organization's president.

The Civic Federation recommends that the state income tax be increased from 3 percent to 5 percent for individuals, that retirees' pension and Social Security checks be taxed for the first time at the same rate as workers' paychecks, and the tax on cigarettes be raised by another $1 per pack. The group also favors getting rid of $181 million in corporate tax breaks.

But AFSCME Council 31, state government's largest union, has shown no interest in having its members -- who have accepted furloughs and deferred pay increases -- pay more toward their pensions and health care or in establishing what is known as a two-tier pension system where new employees would receive a less-generous retirement package than existing workers.

"Since this proposal to slash $2 billion exempts education and health care, it would mean reducing human services and public safety," AFSCME spokesman Anders Lindall said. "We think that's reckless, especially in a recession that's driving demand for public services up, not down."

House Minority Leader Tom Cross (R-Oswego) has taken a tax increase off the table, instead pressing for budget cuts and pension reforms and noting the state's fiscal crisis bloomed under seven years of Democratic-crafted budgets that Republicans didn't vote for.

Watchdogs or Warthogs?

Any group calling for income and corporate tax hikes is a warthog not a watchdog.

I side with the republican minority leader Tom Cross who has taken a tax hike off the table. Balancing the budget deficit must come 100% from union salaries, union pension plans, and union membership.

The state's number one priority should be to eliminate programs entirely, privatize everything that remains, and kill defined benefit pension plans for all public workers.

The state's number two priority should be to eliminate programs entirely, privatize everything that remains, and kill defined benefit pension plans for all public workers.

The state's number three priority should be to eliminate programs entirely, privatize everything that remains, and kill defined benefit pension plans for all public workers.

Civic Federation Calls For Big Tax Hikes

The Sun Times says Only big tax increase can dig out Illinois http://www.suntimes.com/news/commentary ... 22.article

The respected Civic Federation put it on the line today: Illinois desperately needs a major income tax increase to clean up the financial mess it's in.

That's called leadership.

Nobody likes higher taxes, especially at this time of year when we're all filing our tax returns.

But the State of Illinois is maxed out.

Leadership or Insanity?

Leadership is calling for a new way of doing business. Leadership is not calling for more tax and spend.

Tax hikes benefits unions and big government, two things that desperately need to shrink dramatically.

Tax hikes will drive away businesses, shrink growth, and cripple already overburdened taxpayers. The proposal is not leadership, it is insanity.

Overburdened Taxpayers

Tax hikes should not be in the equation.

Workers are taxed enough. The goal should be to reduce taxes, not hike them.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot. ... inois.html

'Doomsday is here for the state of Illinois'

It will take a massive tax increase -- and $2 billion more in cuts -- to reach solvency, group says

February 22, 2010

BY DAVE McKINNEY Sun-Times Springfield Bureau Chief

SPRINGFIELD -- To become solvent, the state must enact the largest tax-increase package in Illinois history, whack another $2 billion from already starved government programs and wrest major financial concessions from the state's unionized work force, a nonpartisan government watchdog contends.

In a new analysis of Illinois' "horrific" finances, the Civic Federation lays out the painful choices awaiting Gov. Quinn and the Legislature as they stare down an epic $12.8 billion budget deficit that has choked the flow of state cash to public universities and schools, transit systems and social-service agencies to the point of economic collapse.

"Doomsday is here for the State of Illinois," said Laurence Msall, the organization's president.

The Civic Federation recommends that the state income tax be increased from 3 percent to 5 percent for individuals, that retirees' pension and Social Security checks be taxed for the first time at the same rate as workers' paychecks, and the tax on cigarettes be raised by another $1 per pack. The group also favors getting rid of $181 million in corporate tax breaks.

Those tax increases, which would generate more than $8 billion, should come only if the state first can persuade its unionized employees to pay more toward their pensions and health care, cut pension benefits for new workers and reduce overall spending by $2.1 billion to 2007 levels. Medicaid programs and elementary and secondary schools would be spared from those cuts to avoid sacrificing federal stimulus dollars, Msall said.

"This is an economically reasonable approach to a horrific situation," he said.

But AFSCME Council 31, state government's largest union, has shown no interest in having its members -- who have accepted furloughs and deferred pay increases -- pay more toward their pensions and health care or in establishing what is known as a two-tier pension system where new employees would receive a less-generous retirement package than existing workers.

"Since this proposal to slash $2 billion exempts education and health care, it would mean reducing human services and public safety," AFSCME spokesman Anders Lindall said. "We think that's reckless, especially in a recession that's driving demand for public services up, not down."

The Civic Federation's recommendations would enable the state to pay down the $12.8 billion deficit by more than $10 billion by June 2011, but $2.1 billion in red ink would carry over for at least another year under the group's plan.

The report's release comes as Quinn prepares to launch an online site Wednesday to begin soliciting public input on what should be included or left out of his fiscal 2011 budget proposal, which he'll unveil March 10.

Quinn's office declined comment on the Civic Federation report but expressed interest in "working with the group during the upcoming budget debate."

Ground Zero in that debate is the Illinois House. Speaker Michael Madigan has insisted that his GOP rivals sign on to any tax increases and has begun calling them "dropouts" for what he regards as their inflexibility on finding new revenue.

"I don't do predictions," Madigan spokesman Steve Brown said, when asked about the Civic Federation plan and the chances any of it might pass. "I think the speaker has supported a cigarette tax increase. I think Democrats supported starting down the road to a two-tier pension system, but the 'dropouts' have done nothing."

House Minority Leader Tom Cross (R-Oswego) has taken a tax increase off the table, instead pressing for budget cuts and pension reforms and noting the state's fiscal crisis bloomed under seven years of Democratic-crafted budgets that Republicans didn't vote for.

Told of the Civic Federation's recommendations, Cross spokeswoman Sara Wojcicki withheld judgment on the report but offered no signs that Republicans are prepared to move off the dime on any tax increases this spring: "I'm not sure much has changed."

Msall, with the Civic Federation, said that if lawmakers leave Springfield without getting out of the state's budgetary black hole, everyone in Illinois will suffer.

"It's not sustainable to continue to ignore your vendors. It's not sustainable to ask your schools, local governments and homes for the developmentally disabled to go out to the market to borrow" because the state isn't fulfilling its funding promises, Msall said. "A failure to effectively address this crisis in a comprehensive form will result in not only lost opportunities but in greater pain."

http://www.suntimes.com/news/maxedout/2 ... 22.article

Get rid of all those illegal aleins in that state and it would save a bunch of money in benefits and medical aid and welfare and other social programs for people that DO NOT deserve them.

But instead the tax payer will take another hit on their pockets.