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Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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The uniformity or consistency of services provided can’t compare to what it is for purchasing goods and products.
In Chicago it is not unusual for the government to cut services and increase the property tax levy claiming it is ‘fair’ to pay more and get less.
Yes, we are severely undertaxed. No increases in decades and property taxes are among the lowest in the nation. No doubt about it!
A LOT of comments on taxing/ confiscating more of citizens income but little to no discussion of the spending side, and it very likely will not be to shore up pensions based on recent history. Rather Priztker and Democrats main concern is propping up the +500k illegal aliens they enticed and worked to bing into the state, and how to provide continued freeloading for them as Federal handouts are cut. When DOGE starts removing fraud from Medicare, SSDI and SS, watch IL’s GDP drop.
They make the point that many states tax services. So are they going to check all the other states to see what else they can tax Illinois on. Just because another state does it doesn’t mean it’s a good idea, especially when you’re the state with the highest tax burden in the nation.
A statewide ‘flush tax’ may be more in keeping with Pritzker and Democrats. Imagine the stickers used on gas pumps for Pritzker being placed by urinals and on stall doors – totally befitting.
“Struggling” public services???!!What they mean is that they want even more money for the overpriced, underworked, pension sucking employees. Hard NO.
Then less money for services. The pensions will be paid either way.
You should explain your less money for services theory to the public union members. Do you think they will approve? Guessing not. Probably the response would be more along the lines of “You got yours, now get out of the way while I get mine.”
I don’t think unions would listen to either of us. Fortunately for us, their members make up only a small fraction of the overall voting population. If more of us want less spending the unions won’t be able to do anything about it.
From replies way down below it is nearly impossible for voters to get a fair representation by the way political boundaries are drawn. The pols choose the voters not the voters choosing the pols. IMO in the case of either party having a super majority there should be something like an arbitrator or like a referee so that one party who makes ALL the rules the bills can be scrutinized by an impartial committee before it becomes law. In Illinois Republicans or Independents rarely see their bills get to the floor for debate or even passed. Madigan in his heyday… Read more »
“IMO in the case of either party having a super majority there should be something like an arbitrator or like a referee so that one party who makes ALL the rules the bills can be scrutinized by an impartial committee before it becomes law” We already have that committee and it’s ALL voters. Otherwise you are asking for an impartial group of unelected people to decide something because you lost at the voting booth. Who exactly are these people? Old school communists would love your idea. “Just tell me: Who are these wise and benevolent people who are going to… Read more »
Look at what the electoral college does. A small group of people in every state can determine who is elected president. Total votes to any candidate does not determine who wins. Candidates concentrate on swing states which Illinois is not one of them. As to whom would be the arbitrators. A group of people in finance/religious-clergy/business owners both small and large would have the expertise to look over the proposed law. If something needs a tax increase the financial experts would ask to see what is the total cost both immediate and long term. Right now all these mandates or… Read more »
You are advocating for a deep state bureaucracy to be able to make those types of decisions. That’s what we have now in the federal government with all of the different agencies. It’s exactly what Trump is trying to stop. You want to replace voters and elected leaders with a bureaucracy of unelected people to make these decisions. Who do you think would choose these benevolent people? You really haven’t thought this through. Also, your analogy to the electoral college is completely wrong. The EC was created to balance the rights of the states and the federal government. The states… Read more »
Simple Democrats and Republican lawmakers. Indiana has county income taxes to offset the reliance on property taxes. Most counties in Indiana have a 1% county income tax which addresses one’s ability to pay not just the value of a property. As for most elected people very few are educated in finance. They just say whatever it takes to get elected and once in office voters have no idea what they will do. Their loyalties are to the “Party” and constituents 2nd. How many lawmakers that you voted for actually asked for your input via direct or by a survey? How… Read more »
The people threatened by less money for public services are not the taxpayers but the public employees. The ones you keep encouraging to demand more money.
I encourage everyone to negotiate for the most money they can get from their employer. I don’t begrudge employees exercising their constitutional rights to collectively bargain. I would like our elected leaders to not spend as much money on these contracts but the voters disagree with me.
Also, public employees are also taxpayers. They exchange their labor for wages and pay taxes on those wages. They pay property taxes on their home and sales taxes on the goods they purchase. Soon they will pay taxes on the services they utilize.
Private employers, yes. Public employers, nope. Even Franklin Delano Roosevelt warned against this during the Great Depression. He knew what would happen eventually.
The public employers are essentially the taxpayers. AFSCME and other public sector unions are organized against the taxpayers.
They are organized to negotiate as is their constitutional right. The people of Illinois wanted them to have that right so what you, I, or FDR believe to be fair is irrelevant.
First time you go to golf course, you’ll find that they’re taxing golf carts!
Tax, tax and more tax. This is what is driving people to leave the state. Some of the highest taxes in the country and not the change of a nickel. Spending is the real problem, so deal with it or lose more residents.
More destructive proposals from millionaire union shill Ralph Martire. This proposal is simply to create more tax revenue to fuel existing and additional new overspending is all this is. That’s all it ever is. If Martire’s Center For Tax & Budget Accountability was truly what its name suggests, it would be arguing for budget restraint and calling out examples of over spending and waste. I have no idea where the “accountability” part comes in.
For more info on the grossly misnamed Center For Tax and Budget Accountability see this link
https://www.influencewatch.org/non-profit/center-for-tax-and-budget-accountability/
If we could harness and tax all the hot air that most of the politicians in this state spew out daily we would have a massive surplus. I’m thinking of a 12″ diameter flexible hose attached to the mouth and none of us would ever need a furnace again plus no more winters. Financial problem solved. Bad news is our A/C’s will be on year round.
This is a crock! The $2 billion would NOT benefit the citizens of Illinois – Pritzker would waste it ALL on ILLEGAL ALIENS healthcare, housing & education! Sick of Illinois LEGAL citizens taking a backseat/back of bus to ILLEGALS! SEND PRITZKER & JOHNSON to jail for breaking federal laws. Soon there won’t be ANY companies or businesses in the state.
what would tax on services do for state competitiveness, especially with already one of highest corporate tax rates…….I’m sure CTBA/Martire, IEPI & crew are concerned in JBs “they’re so tired of all the winning” ZERO growth Illinois!!
Better for the state to tax services rather than physical goods. I can buy goods out of state but much harder to move my home when having plumbing work or landscaping done on my house. The state needs more revenue and this is just one of the taxes that will eventually be implemented.
Why are you so disingenuous? You say “rather than” when you really mean “and”. The services tax isn’t in lieu of sales tax, it’s in addition to sales taxes.
$2 billion to be wasted by the incompetent politicians that are running the state into the sewer. Thank you democrats for your gross failure to do your job.
Thank the voters to they ran it into the ground also. When they hear free free free oh goody nothing is free people.
If Mayor Stacy Gates Johnson, Toni Taxwinkle, & Gov Corpulent could they would tax orgasms! Mark my words it’s only a matter of time before Chicago & IL does just that.
They will. Didn’t you see they are talking about legalizing prostitution?
So much for any pretense of “progressive/ equitable” taxation?……that was sooooo yesterday!!!…(we wouldn’t want a CTU/Brando to miss a $dime$ of his $5.5m gaurenteeted pension for being a CPS teacher for 4 yrs, etc)😅🤑😅🤑😅
Start taxing services and companies that don’t move will all be licensed lottery sales locations.
Companies won’t move out because we tax services. Those companies collect the service tax while the regular user of the service pays it. Yes it’s extra work to collect and remit the tax but if you’re running a service business you aren’t going to abandon your clients and stop providing the service just because you have to perform extra work. If this pushes a business to leave Illinois I’m sure another business would be happy to gain some new clients.
Mostly not true, PPF. Sales taxes ultimately are paid by a mix of the seller and buyer, depending on the industry and how competitive it is. Less of those services will be consumed, too, hurting the sellers. Where it is the buyer bearing the tax, they will have yet another reason to flee.
Then support an increase in income taxes Mark. Or support taxing retirement income. The money is going to need to come from somewhere Mark. You have been whining about everyone leaving the state but you also note that we are not producing a true balanced budget. The state needs more revenue and it will get it one way or another.
No, it won’t get the money from somewhere. That’s a fundamental point we disagree with. Attempts to raise taxes now will raise a few bucks only initially, but backfire as more employers and people flee.
Yet when the state raised the income tax overall revenue increased. As JB and dems raised taxes more revenue came. into the state coffers.
Are you actually making the claim that taxing services wouldn’t increase state revenue? That’s laughable.
“Attempts to raise taxes now will raise a few bucks only initially, but backfire as more employers and people flee.”
You’ve been making that argument for a long time. Population has remained relatively flat and revenue has increased. Most people don’t leave their family and friends because they need to pay a tax on haircut. You’ve admitted yourself that you aren’t leaving because you and your family live here.
Yes we disagree and so far I’ve been the one on the correct side of the prediction. More taxes will be raised and pensions will be paid first.
Wrong. Take a look at personal income tax revenue results after the big hike in 2017. Shrinking revenue. In FY2019, the last year before pandemic distortions, total personal income tax collections were $22.6B. Last year, $25.6B. Adjusted for inflation that’s a shrinkage of $2B. Yes, the income tax increase of 2017 gave an initial bump up, especially because the temporary tax increase had expired, but tax increases always help in the short run because you can’t do anything about them. I have always written that it takes years, however, for people and companies to move after they decide they should.… Read more »
I wasn’t wrong Mark. Not once did I say more revenue would be collected when factoring inflation. Nice try in moving the goal post. It’s funny. I’ve have read many articles on this site but I have yet to see you write an article discussing how the states pension debt has actually reduced when you factor for inflation. That’s ok, I’ll go ahead and apply your logic to our pension debt and show how the debt has actually declined. In FY 2019 the state had pension debt around $137 billion and most recently they have around $144 billion. Adjusted for… Read more »
You are partly right on one point, which is that inflation reduced the pension debt substantially in recent years and that we haven’t mentioned that. But it is only for the past 4 years or so, when inflation totaled around 22% and pension debt stayed flat. But it’s certainly not true for the longer term. Since 2002 when the problem really became apparent, pension debt is up over 400% while inflation is up just 77%. On the rest of it, you have badly misstated my predictions. I’ve haven’t predicted housing prices would decline, though I wrote often about how badly… Read more »
PPF owned yet again.
You have used the “it’s happening” line as if Illinois was not going to be able to meet their obligations any time soon. If your intent is that Illinois is lagging behind other states then we agree.
Thanks for providing clarity around your opinion. It sounds like we are on the same page. Illinois will continue to raise taxes until the voters decide otherwise.
So you’re sending us a big, fat contribution now?
I would think about it if your mission was to force a true balanced budget where we stopped borrowing from pensioners. Instead your plan is to steal from them. That breaks one of the commandments, so, that’s gonna be a NO from me dawg. Thou shalt not steal Mark.
PPF wont contribute to anything. Takers gotta take take take.
100% correct Mark.
Get a hobby, and even more so, a life. You’re already on comment 2,000 today.
PPF is sitting behind a desk at the DMV suckling off of the taxpayer funded teat. The phone next to him is continuously ringing but never answered while he does his second paying job. The one for the union: spamming websites that tell the truth about the Public Sector Union graft and thievery.
They couldn’t afford me.
How about NOT spending our tax dollars on people that are illegally in the country!
Hear Hear!!! I’m down with cutting spending and will support candidates that run on that platform. Unfortunately the rest of the voters don’t seem to want these types of candidates.
You have it backwards, bruh, the companies won’t leave, but the clients and buyers will.
I’m not the one stating business would leave so not sure why you think I have it “backwards”. Follow the thread debtsor as you clearly responded to the wrong person.
Will some people leave because services are taxed? Sure, some will but most won’t and additional tax revenue will be added even if a small percentage leave. The state needs more money so more taxes will be raised.
As a personal service provider, I can attest this tax will severely impact service companies and would be enough to relocate to a neighboring state. Unbeknownst to IL legislators, apparently, Chicago is not the only home to accountants, artists, consultants, musicians and attorneys. If service is taxed in Illinois, either we eat the tax, or we lose customers because pricing is too competitive to just “add it to the tab.” This is just one more example of complete incompetence. The absolute insanity of pensions and legislatures to continue to think that there is an endless money supply is coming at… Read more »
Like always it is NEVER a spending problem only a REVENUE problem.
Cash only for many services will become more common if this passes.
Illinois has the 5th highest GDP of all the states, and compared to countries, a GDP similar to Turkey, The Netherlands, or Saudi Arabia. If Illinois were a country, by GDP it would be in the top 20 in the world. So Illinois is very rich state. Fabulously rich. The fact that the state is in so much debt just shows how absolutely corrupt the Democrats are. Illinois’ GDP also explains why the Marxist leaders are happy when the productive people who oppose them leave the state. There’s more than enough money leftover in the state for them to steal… Read more »
You’re right Ataraxis. Illinois is “fabulously rich” and that means we have plenty more in taxes that can be raised.
Keep screaming for more taxes PPF. Hasn’t the fact that neither the city, nor CPS, and indirectly the CTU, want to make the pension payment shown you that they will always want to keep every last dollar for themselves? It doesn’t matter how much money the taxpayers give them, they will never want to give it up in order to pay pensioners. Surely the Fed COVID windfall is ample demonstration. Sooner or later it will become clear that your nemesis is not the taxpayer you accuse of stealing from pensioners. The problem is the public unions who will always look… Read more »
We are taking about the state PP. Try to keep up. The state has vast taxing authority and taxes will be increased since the voters don’t want to cut spending. Once again you display how misinformed you are on pensions. The unions have zero power in funding those pensions. They’ve sued the state and lost. They are only guaranteed their checks and not a certain level of funding. Why do you remain so ignorant on this matter after you’ve been educated repeatedly? The problem is the voters won’t elect leaders that support cutting. Unions represent a small fraction of the… Read more »
I got proposals for some painting recently, one comes with a discount for cash payment.
BOHICA
It’s Happening!
More taxes will be raised and the longer we wait to produce REAL balanced budgets, the more taxes that will come in the future. Today it’s service taxes while tomorrow will eventually be a progressive tax, taxing retirement income, a real estate transfer tax to get more dollars before people move out, etc…. The state has vast taxing authority and it will not be afraid to use it.
Now tell me again how Illinois won’t be able to raise more in taxes again.
don’t forget the proposed tax on mileage, internet gambling, hooking, etc, etc. All to go along with a ga-zillion new spending bills and or funding formula bills— EBF for transportation, EBF for higher ed, TIER 2 “fix”, etc, etc, etc. ZERO cuts to all the ARPA-COVID spending……All while the state can’t produce an ACFR for two years running??, good luck with your REAL balanced budget…..what business in their right mind or a young couple looking for a place to raise a family would choose “their so tiered of all the winning” ZERO growth Illinois?
Of course they’re afraid to use it. How do you think we got here? They are cowards and always make the easy choice, which in Illinois means kicking that can down the road.
They are afraid of any backlash and not the tax itself. That’s why we wait to raise taxes until the politicians can shrug their shoulders and say “we tried” but the courts said this item or that item must be paid. That’s why when everyone tells me that the state can’t raise any more in taxes I point out all the taxes that are at their disposal. You are correct that they won’t proactively increase them to align with their spending habits but they will eventually be forced to raise them as we have been witnessing. How did we get… Read more »
With half the races in Illinois (and nearly all held by Democrats) having no opposition candidate, it’s a bit rich to say that they really care what voters thinks. Politicians in Springfield are disposable entities with a short shelf life. The leaders of the Dem Party make the decisions and tell the elected official how to vote. And if you don’t vote the party line, you will be replaced. Voters have very little say actually. There’s facade of democracy in the state. Much like Russia or North Korea, sure, you say that elections were held and votes were counted, but… Read more »
They care about the voters that show up. The ones that show up keep putting them in office. If they are running unopposed that’s because the opposition knows the platform doesn’t align with those voters. That means the voters are getting exactly what they voter for. You and others are free to run if you don’t like it.
Also, if you don’t like the gerrymandering, then organize and get more than 50% of the statewide vote before the 2030 election. Then your side can draw the maps. I’m sure you won’t draw them to your advantage.
I love your circular logic. In November 1996, the people of the State of Illinois voted for a Democrat majority in the General Assembly. They voted specifically for Democrats to gerrymander the legislative maps so greatly that an opposition party could never ever again win a majority of seats in the general assembly again. And that majority in November of 1996 also believed that Democrats should forever be able to change those maps at anytime should the opposition party appear to be gaining any sort of traction or majority so as to specifically disadvantage them in the future. This is… Read more »
Here is an article from Forbes on the 1970 Constitution that is referred to here as the voters voted for this. In the article the 1970 constitution was ratified by 57% with a turnout of only 37%. The kicker is it was a “special” election in December right before Christmas. It was passed not only because of the pension clause (not Santa Clause) but because of the other things like 18 year old could vote and capital punishment/election of judges/cumulative voting for the legislature. All but the pension attachments could be voted for only in an up or down vote.… Read more »
Unfunded pension liabilities are a struggling public service? Who knew except the smug beneficiaries?
Our “civic leaders” at work. Just raise taxes. No preconditions or reforms. The Civic Federation arm-in-arm with Ralph Martire and his CTBA. Extending the sales tax to services would be sensible but only in a revenue-neutral way. This is not that. It’s a tax increase that will backfire.
What a joke that CTBA & IEPI are referred to as “civic groups” by reporter.
So disappointing that CTBA & IEPI pass as legitimate “civic groups” in press, academia, etc but not WP or IPI? So disappointing Ferguson/ Civic Fed signed onto the CTBA machine lobbying train. Seems BGA has as well with their BGA/CTBA “Pension Hub” site.
Why would shifting taxes from sales to services be “sensible?”
Actually, I have an open mind about it and still want to hear it debated further, but generally I think this: The proper state and local tax burden is a broad mix of income, sales and property taxes. The sales tax should broad but low, and we indeed have a service economy now, making the sole focus on goods outdated. But let me emphasize again that any expansion into services should be revenue neutral. That is, cut the tax on goods sufficiently to cancel out the new tax on services. No net new tax increase.
The state isn’t going to make much money taxing people’s $20 haircut or $50 lawn care service. The real money is in the professional services market where contract values are tens if not hundreds of thousands of dollars. A 10% tax on these services would add up to real money but would likely accelerate the state’s bleeding of professionals to other surrounding states.
They could tax the lawsuit settlements?
They do already. While Illinois doesn’t tax settlements for personal injury or workers compensation, settlements that result from punitive damages, lost wages, emotional damages are taxed. Those multi-million dollar settlements that Chicago pays are taxable income to the recipients. Of course that money also comes from the taxpayer so it’s more of a 4.95% discount for the state.
Taxes on retail sales are much simpler than on services, since the former usually leaves a record of goods bought and sold. It’s easy for many service providers to give a discount for cash, or only accept cash. And, as debtsor notes nearby, the big money is in “professional” services, and somehow I imagine lawyers and accountants will get exempted from any new tax. There’s a handy state-by-state summary of service taxes here. New Jersey and West Virginia don’t tax fees paid to lawyers, and there is no information for other states. One good idea: Kentucky, Pennsylvania, and Connecticut tax… Read more »
Right about that land value tax. It’s a topic that has interested me for decades. It’s usually laughed off first by conservatives, who initially see it as socialist and anticapitalist. It’s anything but that. Transitioning over to it has always seemed like the hard part to me.