Friday, February 22, 2008

Clarification

Last week, I reported about revenue ideas, specifically mentioning an income tax increase. Thanks to commenters, I realize the need to clarify two things:

First, such business groups as the Taxpayers Federation of Illinois and the Civic Committee of the Commercial Club of Chicago said last year they could swallow a state income tax increase if Illinois also — or first — enacted reforms to control such costs as public employee pensions and retiree health care benefits. In last week's post, I mentioned the portion about the Taxpayers' Federation of Illinois willing to support an income tax increase but did not mention the other side of the equation – its belief in the need to take steps to address the structural deficit. See David Eldridge's comments at the bottom of this post. (I also wrote about both sides of the equation last spring.) And more background can be found in the Civic Committee's full December 2006 report that suggests raising money by increasing income taxes and expanding sales taxes while also cutting costs and reforming the education funding system.

Second, both groups recommended increasing the personal income tax rate from 3 percent to 4 percent, which is not the same thing as a 1 percent increase. See Cal Skinner's comment at the bottom of this post. (More context: The Civic Committee's report also recommended increasing the corporate income tax rate from 4.8 percent to 6.4 percent and expanding the state sales tax to apply to consumer services.)

Be specific, please
State legislators would have to be more specific in the state budget when they requested money for projects within their districts under a measure that sailed out of the House today. They would have to spell out who requested the money, what it's for and whom it would benefit. Sponsor Rep. Patricia Reid Lindner, an Aurora Republican, called it a good government measure aimed to make the budget-making process more transparent, as opposed to the common practice of slipping in vague descriptions of rather hefty grants for local projects, a.k.a. pork.

The measure received 99 supporting votes and one in opposition, but a few members voiced concerns about whether the rules would actually work as intended. Rep. David Leitch, a Peoria Republican, was the lone “no” vote because the requirement could draw out the process if simple errors were made in the state budget, he said. For instance, a drafting error prevented the state from awarding a grant to a cancer center in his district even though it had received legislative approval. “You're absolutely correct. We should provide a description. We should provide transparency. But this would be a very impractical way to accomplish your worthwhile goal.”

The measure now goes to the Senate, where lawmakers predict it will have a tougher time getting approved.

1 comments:

JB Powers 9:00 AM  

Continuing issue with the Civic Committee and the Taxpayers Federation...why not perform the reforms first, then consider if a tax increase is necessary.

Shift from defined benefit to defined contribution pension, require state employees to work past age 51 (say age 60 as a starter), lease the lottery, tollway and McCormick place...then see if you still need a tax increase.

JBP

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