Taxes

Chicago’s 2015 Budget Includes Tax And Fee Hikes

Gee, who could’ve anticipated new fee and tax hikes look to be in store for Chicago next year?

From Fran Spielman over on the Chicago Sun-Times website this morning:

[Chicago Mayor Rahm] Emanuel will campaign for re-election on a budget that raises $62.4 million through “targeted” tax hikes and closing “loopholes,” which amounts to the same thing.

People who live, work and play in Chicago will be paying more for everything from parking and vehicle leasing to cable television and stadium skyboxes…

(Editor’s note: Bold added for emphasis)

These individuals have been doing that for a number of years now. Hal Dardick pointed out over on the Chicago Tribune site:

As the Chicago City Council prepares to approve his latest budget Wednesday, Mayor Rahm Emanuel repeatedly has reminded voters that he didn’t raise city property taxes during his first four years in office.

But that doesn’t mean homeowners haven’t had to pay. Under Emanuel, vehicle stickers cost more. Cable TV and phone taxes went up. And water and sewer fees increased significantly…

Taken together, Emanuel’s hikes mean the typical Chicago family will pay about $481 more to the city next year than it did in 2011. That’s the equivalent of a typical Chicago homeowner paying 60 percent more in city property taxes, which are nearly $800 a year for city and library services on a $250,000 home…

(Editor’s note: Bold added for emphasis)

“Nearly $800 a year for city and library services on a $250,000 home”

In the Chicago neighborhood I recently moved out of, I’m not sure if any inhabitable houses at that price range with more than 2 bedrooms/1 bath even exists. So I’m guessing a number of my old neighbors- who already shoulder a significant tax burden for the city- will be somewhat pissed to hear of this “good news” coming out of City Hall.

That being said, it’s not exactly Chicago’s “financial reckoning day” we’re talking about here. But it’s probably not what Chicagoans want to deal with as the holiday season kicks-in.

As for the well-publicized pension crisis going on in the “Windy City,” Spielman added:

By December, 2015, the City Council must decide whether to raise property taxes — or find other new revenues — to fund a state-mandated, $550 million payment to shore up police and fire pension funds.

(Editor’s note: Bold added for emphasis)

So a property tax hike might also be coming down the pipeline.

One more thing. Regarding the ongoing manpower shortage in the Chicago Police Department? That doesn’t look like it’s going to be resolved in 2015. From the Sun-Times piece:

Once again, the mayor’s budget includes only enough money to keep pace with retirements. It also includes roughly $70 million in police overtime, down from $100.3 million in 2013 and a projected $95 million this year…

(Editor’s note: Bold added for emphasis)

“Crime is down!” Yeah, whatever.

As always, I’m glad to see Fran Spielman and Hal Dardick are on top of their game.

What does all this mean for Chicago residents/workers/visitors?

It’s probably wise to budget a good deal more money for anything city-related next year. Even more so in 2016 considering what could be in store with the city’s public pension mess and what Cook County is telegraphing these days (blogged about Monday).

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(UPDATE: The Chicago City Council approved Mayor Emanuel’s proposed 2015 city budget Wednesday by a vote of 46-4, and “puts off dealing with the city’s most vexing financial woes until after next year’s elections” according to the Tribune Thursday morning)

Sources:

Spielman, Fran. “Chicago City Council set to pass Emanuel’s $7.3 billion budget.” Chicago Sun-Times. 19 Nov. 2014. (http://politics.suntimes.com/article/chicago/chicago-city-council-set-pass-emanuels-73-billion-budget/wed-11192014-742am). 19 Nov. 2014.

Dardick, Hal. “Higher Emanuel fees and taxes add up.” Chicago Tribune. 19 Nov. 2014. (http://www.chicagotribune.com/news/local/politics/ct-emanuel-budget-2015-met-20141118-story.html#page=1). 19 Nov. 2014.

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Global Economy Flashes Warning Signals

I’m picking up on a growing number of “bad vibes” about the global economy these days.

First, Rich Miller reported on the Bloomberg website Thursday about the findings of the latest Bloomberg Global Poll of international investors:

The world economy is in its worst shape in two years, with the euro area and emerging markets deteriorating and the danger of deflation rising, according to a Bloomberg Global Poll of international investors.

A plurality of 38 percent of those surveyed this week described the global economy as worsening, more than double the number who said that in the last poll in July and the most since September 2012, when Europe was mired in a recession.

Much of the concern is again focused on the euro area: Almost two-thirds of those polled said its economy was weakening…

Europe isn’t the only source of concern in the global economy, according to the quarterly poll of 510 investors, traders and analysts who are Bloomberg subscribers. More than half of those contacted said conditions in the BRIC economies — Brazil, Russia, India and China — are getting worse, compared with 36 percent who said so in July.

(Editor: Bold added for emphasis)

Granted, it’s just a poll. But there’s also this from British Prime Minister David Cameron in a piece he penned that was published on The Guardian (UK) website Sunday:

Six years on from the financial crash that brought the world to its knees, red warning lights are once again flashing on the dashboard of the global economy.

As I met world leaders at the G20 in Brisbane, the problems were plain to see. The eurozone is teetering on the brink of a possible third recession, with high unemployment, falling growth and the real risk of falling prices too. Emerging markets, which were the driver of growth in the early stages of the recovery, are now slowing down. Despite the progress in Bali, global trade talks have stalled while the epidemic of Ebola, conflict in the Middle East and Russia’s illegal actions in Ukraine are all adding a dangerous backdrop of instability and uncertainty…

(Editor’s note: Bold added for emphasis)

Cameron added the following, which I thought was pretty funny (disturbing?):

When we faced similar problems in recent years, too many politicians offered easy answers, thinking we could spend, borrow and tax our way to prosperity. Those were the wrong answers then; they are the wrong answers now. We are not going to repeat the mistakes of the past…

(Editor’s note: Bold added for emphasis)

Sound like any country you know?

Finally, exacerbating fears about global economic health was the following “shock” announcement. Mitsuru Obe and Eleanor Warnock reported on The Wall Street Journal website this morning:

Japan Falls Into Recession

Japan’s economy shrank for a second quarter in a row, after a sales-tax increase took the steam out of Prime Minister Shinzo Abe ’s bid to turn Japan into a global model of revival.

Mr. Abe, who has sought to revive the world’s third-largest economy after two mostly sluggish decades, is set to announce this week that he will delay plans to raise the nation’s sales tax next year and call elections in December…

“Two mostly sluggish decades”

Some really bright financial-types suspect Japan’s so-called “zombie economy” is what’s ultimately in store for America. While I have no doubt about a coming U.S. economic crash, I remain somewhat more optimistic for the country’s prospects upon emerging from the coming carnage.

Stay tuned…

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Cameron, David. “David Cameron: Red lights are flashing on the global economy.” The Guardian. 16 Nov. 2014. (http://www.theguardian.com/commentisfree/2014/nov/16/red-lights-global-economy-david-cameron). 17 Nov. 2014.

Miller, Rich. “World Economy Worst in Two Years, Europe Darkening, Deflation Lurking: Global Investor Poll.” Bloomberg.com. 13 Nov. 2014. (http://www.bloomberg.com/news/2014-11-13/world-outlook-darkening-as-89-in-poll-see-europe-deflation-risk.html). 17 Nov. 2014.

Obe, Mitsuru and Warnock, Eleanor. “Japan Falls Into Recession.” The Wall Street Journal. 17 Nov. 2014. (http://online.wsj.com/articles/japan-falls-into-recession-1416182404). 17 Nov. 2014.

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2015 Cook County Budget Holds Line On Taxes, Fines, And Fees- For Now

Cook County residents dodged a bullet this time around.

John Byrne and Hal Dardick reported on the Chicago Tribune website Friday:

Cook County Board President Toni Preckwinkle on Friday won easy approval for her $4 billion 2015 budget proposal that includes no new taxes, fines or fees

(Editor’s note: Bold added for emphasis)

For now. Byrne and Dardick added:

Preckwinkle earlier this year warned that the 2016 budget will be far more difficult to balance because debt payments will grow and the county will need to pay $144 million more into the county workers’ retirement system if she secures the pension fund changes she seeks from the General Assembly…

(Editor’s note: Bold added for emphasis)

Regular readers of Survival And Prosperity know I suspect those “new taxes, fines, or fees” are coming soon. I wrote back on May 22:

Last week, I blogged about the possibility of property and/or sales taxes going up soon in Cook County, Illinois. Dave McKinney and Brian Slodysko reported on the Chicago Sun-Times website on May 13 the hikes might occur as part of a pension “reform” bill.

Hal Dardick and Monique Garcia added on the Chicago Tribune website tonight:

Cook County Board President Toni Preckwinkle hit Springfield Thursday to try to build support for changes to the county pension plan that she says would halt its ongoing decline toward insolvency.

She met with Senate President John Cullerton House Speaker Michael Madigan, both Chicago Democrats, and also Republican legislative leaders. “I think she’s got a good chance to pass this bill,” Madigan said afterward…

Although Preckwinkle has not identified how she would pay for her plan, it calls for the county to put $144 million a year into the pension fund. If funded with property taxes, that would cost the average homeowner up to $65 more a year, starting in 2017, according to one internal county document the Tribune obtained.

Preckwinkle, however, said Wednesday that she has closed even larger budget gaps through cuts and other, smaller scale tax and fee increases without raising property taxes — while also lowering the county sales tax by a half-cent on the dollar…

(Editor’s note: Bold added for emphasis)

Yet, McKinney and Slodysko wrote last week:

County officials do not believe they can cut enough from the budget to cover the cost, the source said…

(Editor’s note: Bold added for emphasis)

Only a matter of time now before those hikes kick in. As I also noted in that May post:

What’s that line I keep repeating on this blog?

Higher fees, fines, and taxes. Less government services.

As much as I hate saying it, that’s what Chicago and Cook County residents should be preparing themselves for down the road.

I’d say that probably applies to all Americans, come to think of it.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Byrne, John and Dardick, Hal. “Preckwinkle wins easy approval of $4 billion budget.” Chicago Tribune. 14 Nov. 2014. (http://www.chicagotribune.com/news/ct-cook-county-budget-met-1115-20141114-story.html). 17 Nov. 2014.

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Flee Chicago By The End Of 2015?

April 7, 2015.

That’s the date of the next Municipal Runoff and Supplementary Aldermanic Election in the wake of the February 24, 2015, Municipal General Election in the city of Chicago, Illinois.

And that would be the ideal deadline for moving out of the “Windy City” if I still lived there due to the likelihood of fees, fines, and taxes being hiked (even more than they already have) shortly thereafter, along with additional government “belt-tightening.”

If not April 7, definitely by the end of the year. Hal Dardick reported on the Chicago Tribune website right before the weekend:

Mayor Rahm Emanuel and aldermen won’t grapple this fall with the financial reckoning the city faces over its underfunded police and fire pension systems, budget officials acknowledged Thursday.

Instead, the Emanuel administration plans to take advantage of a state law that gives it until December 2015 to decide to make changes to its property tax levy. For years, both the current and former mayor have been saying property taxes would have to be hiked or services drastically cut to come up with the extra $550 million.

By the end of next year, the February city elections and any potential April runoffs will be history. Delaying a decision also will buy the city more time to get the General Assembly to enact pension changes that could significantly reduce the required payments to the two retirement funds..

(Editor’s note: Bold added for emphasis)

Fine. So the Illinois General Assembly votes to allow the City of Chicago to “kick the can down the road” on its pension fund payments. The well-publicized crisis isn’t going anywhere, as the public sector retirees are still owed their money.

(Editor’s note: Check out this graphic on the Tribune website showing Chicago’s pension debt rank compared to the 25 largest U.S. cities and Puerto Rico. It’s disturbing.)

And how about that “Sword of Damocles” hanging over the city’s head in the form of long-term debt it’s on the hook for? Fran Spielman reported on the Chicago Sun-Times website on July 26, 2013:

The new round of borrowing brings Chicago’s total long-term debt to nearly $29 billion. That’s $10,780 for every one of the city’s nearly 2.69 million residents. More than a decade ago, the debt load was $9.6 billion or $3,338 per resident.

(Editor’s note: Bold added for emphasis)

Remember- those figures were from a year ago. Updated numbers should be out shortly.

Yep. If I hadn’t departed the city like I did last year, I’d be making plans to leave Chicago by the end of 2015 at the latest.

But that’s me. I understand individual circumstances vary, and there are residents who can’t leave or choose not to.

Despite what others may think, I have an idea this group can still weather the coming storm if they’re really up to the task. I’m guessing it will be somewhat harder though residing in a city already burdened with significant financial problems when challenging times arrive.

More about this in future posts…

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Dardick, Hal. “Chicago’s day of reckoning over pensions delayed.” Chicago Tribune. 1 Aug. 2014. (http://www.chicagotribune.com/news/watchdog/ct-rahm-emanuel-budget-hole-met-0801-20140801-story.html). 5 Aug. 2014.

Spielman, Fran. “City of Chicago’s cash cushion plummets, debt triples, arrests drop, water use rises.” Chicago Sun-Times. 26 July 2013. (http://www.suntimes.com/21552920-761/city-by-the-numbers-cash-cushion-plummets-debt-triples-arrests-drop-water-use-rises.html). 5 Aug. 2014.

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NY Times Bestselling Author Brad Thor ‘Very Fearful’ Of Terrorist Attack In U.S.

Any readers ever hear of best-selling author Brad Thor? I first heard his name mentioned on TheBlaze website back in the spring. At that time, Thor- who’s brand-new thriller Act of War was just released Tuesday- announced he was moving his family from Chicago, Illinois, to Nashville, Tennessee, because of violent crime and high taxes.

I spotted Thor’s name again on Glenn Beck’s site last night. Erica Ritz wrote:

After 9/11, New York Times bestselling author Brad Thor was one of a select group of individuals asked to assist the United States government in “war gaming” the next move of radical jihadists.

Why? Because he and other thriller writers had demonstrated an uncanny ability to predict events years before they occur. Thor warned of the NSA spying scandal in his book “Black List,” and predicted the release of five of the most dangerous Guantanamo Bay detainees seven years ago in “The First Commandment.”

So where does Thor believe we are headed next?

He told listeners of The Glenn Beck Program yesterday:

What chilled me was Dick Cheney recently saying that within the next six years, we’re going to see a terrorist attack on American soil worse than 9/11. You know, with two-thirds of our border agents changing diapers and trying to feed these children coming across the border, that doesn’t leave many to guard a border that- even at 100-percent strength- people were still getting through. I’m very concerned that the enemies of the United States are exploiting- because they exploit every opportunity to get bad actors into the country. And we already know Iran has lots of bad actors already in the country- Agents that are in place, waiting to be activated should the Iranians trigger them and tell them to activate.

I am very fearful that we could see some sort of terrorist attack in the United States…

As am I, Mr. Thor. As am I…


“Brad Thor Act Of War”
TheBlaze TV Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Ritz, Erica. “Bestselling Author Brad Thor, Who Predicted NSA Spying Scandal and Controversial Prisoner Exchange, Shares What He Fears Is Next for America.” TheBlaze. 9 July 2014. (http://www.theblaze.com/stories/2014/07/09/bestselling-author-brad-thor-who-predicted-nsa-spying-scandal-and-controversial-prisoner-exchange-shares-what-he-fears-is-next-for-america/). 9 July 2014.

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Chicago’s Monthly Phone Tax To Rise 56 Percent?

New and higher fees, fines, and taxes. Less government services.

That’s what Chicagoans should expect going forward considering the city’s fiscal health and who’s running the show.

Fran Spielman reported on the Chicago Sun-Times website last night:

After playing cat-and-mouse for days, Mayor Rahm Emanuel’s administration came clean Thursday: Chicago wants to raise the monthly fee tacked on to hardline telephone and cell phone bills by 56 percent — to $3.90…

(Editor’s note: “After playing cat-and-mouse for days, Mayor Rahm Emanuel’s administration came clean Thursday…” Beautifully worded; bold added for emphasis.)

Spielman continued:

Instead of simply asking the General Assembly to renew a $2.50-a-month surcharge due to expire July 1, cash-strapped Chicago is seizing the opportunity to get more money — by asking state lawmakers to raise the cap to “the highest monthly wireline surcharge imposed by any county or municipality” in Illinois.

The highest monthly telephone tax around the state is the $3.90 imposed in Putnam County. Under the bill Emanuel is hoping to push through in the waning days of the Legislature’s spring session, Chicago would be empowered to match that $3.90 — and go higher if any other city or town goes first.

The new and higher tax would apply to both cell phone bills and wireline phones, according to a summary sheet of the legislation distributed by City Hall. The bill would also empower the city raise the fee imposed on prepaid cell phones from the current “seven percent of the transaction amount” to nine percent…

According to Spielman, a 56 percent increase in the monthly phone tax would generate an additional $50.4 million for the City’s coffers.

John Byrne, Monique Garcia, and Ray Long added on the Chicago Tribune website Thursday:

Emanuel’s late push for a measure that would allow the City Council to raise 911 fees by as much as $1.40, which could bring the monthly charge on landline and cell phone bills to $3.90 a month, cleared its first hurdle in the Senate.

Senate President John Cullerton, D-Chicago, said the increase was needed because the current $2.50 fee isn’t raising enough money to pay for operating the city’s emergency response center, forcing the Emanuel administration to dip into other pots of money to keep it running. How much more the fee hike would bring in depends on whether aldermen vote to increase the fee and to what level.

The city collected about $90 million last year through the current $2.50-per-month phone fee, Emanuel spokeswoman Kelley Quinn said. This year’s budget for the Office of Emergency Management and Communications is $123 million. Quinn did not directly answer whether the mayor wants to raise the 911 fee to an amount that will bring in more revenue than the city needs to cover the OEMC budget or how the city would use any extra revenue

Let’s see. Assuming the City of Chicago collects the same amount ($90 million) as last year from their monthly phone tax, adding the projected $50.4 million from a 56 percent hike totals just over $140 million. That’s enough to pay for OEMC operations plus tax- although something tells me that’s probably not where all the money would be steered to.

(Editor’s note: Bold added for emphasis)

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Spielman, Fran. “Emanuel seeks 56 percent hike in telephone tax.” Chicago Sun-Times. 29 May 2014. (http://politics.suntimes.com/article/chicago/emanuel-seeks-56-percent-hike-telephone-tax/thu-05292014-434pm). 30 May 2014.

Byrne, John, Garcia, Monique and Long, Ray. “Emanuel makes late push to raise 911 fees paid by those own landlines, cell phones.” Chicago Tribune. 29 May 2014. (http://www.chicagotribune.com/news/politics/clout/chi-emanuel-makes-late-push-to-raise-911-fees-paid-by-those-own-landlines-cell-phones-20140529,0,6958184.story). 30 May 2014.

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Study: Chicago Worst U.S. City For Total Travel Tax Burden

“It’s no secret that the city of Chicago is looking anywhere for new revenue sources to plug its $63.2 billion shortfall in government-pension funding, health insurance and other debt.

But city leaders should be careful not to squeeze travelers too hard.”

-Hilary Gowins Yelvington, Editor at the Illinois Policy Institute, in a May 29, 2014, blog post on IllinoisPolicy.org

There’s no question Chicago is a favorite destination for business and pleasure travel.

However, the findings of a recently-released study of travel-related taxes for major U.S. cities makes me wonder how many prospective visitors are steering clear of the “Windy City” due to the high level of such expenses.

Shane Downey wrote on The Business of Travel- the official blog of the Alexandria, Virginia-based nonprofit Global Business Travel Association- back on April 15:

The GBTA Foundation – the education and research arm of GBTA – annually tracks the tax burden imposed on business travel throughout the country. The study examines hotel lodging, car rentals and restaurant meal taxes in the top 50 U.S. destination cities, which are regularly used to fund local projects unrelated to tourism and business travel…

In the travel tax study, the top 50 U.S. markets are ranked by overall travel tax burden, including general sales tax and discriminatory travel taxes…

And where did travelers incur the highest total tax burden, factoring in general sales taxes and discriminatory travel taxes?

From the FOX News website Tuesday:

1. Chicago- $41.04/day

• The Windy City could just as easily be called the Spendy City; it’s at the top of the GBTA study for the third year in a row. Travelers will dish out 16 percent ($16.85) per day in hotel tax, along with $14.16 for a rental car (its overall 24.82 percent rate, the highest in the ranking, includes a $2.75 flat tax). Another study put Chicago’s 10.75 percent downtown restaurant tax at the top of all major U.S. cities…

Over 41 bucks a day. Wow. And top of the GBTA study for three years in a row now. Not something the City of Chicago should be proud of.

A part of me says, “Reign in these taxes, and business travel and tourism would really be booming in Chicago.”

But only after violent crime and the “city leaders” who sanctioned such high levels of taxation are dealt with first, of course.

Probably won’t see that happening anytime soon, however.

You can read the rest of that GBTA post on their website here.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Bachelor, Blane. “10 worst cities for travel taxes.” FOX News. 27 May 2014. (http://www.foxnews.com/travel/2014/05/27/10-worst-cities-for-travel-taxes/?intcmp=obnetwork). 29 May 2014.

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Illinois House Speaker Michael Madigan Vows To Get State Income Tax Hike Made Permanent

The Illinois House of Representatives approved a $35.7 billion state spending plan yesterday which didn’t factor in funds from a 2011 temporary income tax hike being made permanently available. I surmised Tuesday:

So does this mean Illinois Democrats have abandoned their push to make the temporary income tax hike permanent? I doubt it. This is “Madiganistan,” after all. And what Mike wants, Mike gets.

I wouldn’t be surprised to see some sort of maneuvering being carried out to eventually land these funds. Perhaps another “temporary” increase in such taxes sometime after the November 2014 election, with buzz words such as “fiscal emergency” and “for the children” being used to justify the measure?

Monique Garcia, Ray Long, and Maura Zurick reported on the Chicago Tribune website last night:

Speaker Michael Madigan acknowledged the budget proposal would leave unfinished business and vowed to spend the summer and fall working to get the income tax hike made permanent to provide more money to run state government. The approach also ensures the governor’s race will continue to be framed up by opposite positions on a tax hike Democratic Gov. Pat Quinn and Republican challenger Bruce Rauner have staked out.

“My expectation is that this issue will be taken into the general election and I think the governor will be supportive of an extension of the income tax increase through the general election,” Madigan said. “My expectation is that Mr. Rauner will be against. So you’ll have a clear line of division going into the election. And people can make their choice.”

(Editor’s note: Bold added for emphasis)

Hmmm. Should Governor Quinn be re-elected, one more buzz word I suspect Illinoisans might hear before legislative action is taken by the Democrats to make the income tax hike permanent is “mandate,” as in “Illinois voters have given us a mandate to make the temporary income tax hike permanent during this fiscal emergency. Remember- it’s for the children!”

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Garcia, Monique, Long, Ray and Zurick, Maura. “State budget would put off tough decisions until after election.” Chicago Tribune. 27 May 2014. (http://www.chicagotribune.com/news/politics/clout/chi-state-budget-would-put-off-tough-decisions-until-after-election-20140527,0,6506902.story). 28 May 2014.

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Illinois Democrats Abandoning Attempt To Make Temporary Income Tax Hike Permanent?

“In his election-year budget speech Wednesday, Gov. Pat Quinn called on lawmakers to make permanent the 67 percent temporary income tax increase they approved in 2011…

Quinn’s budget speech was the first time he directly addressed what should be done about the pending expiration of much of the temporary tax increase. When lawmakers approved raising the state’s personal income tax rate from 3 percent to 5 percent, they stipulated that the rate should drop to 3.75 percent on Jan. 1, 2015…”

-The State Journal-Register (Springfield), March 26, 2014

There’s news coming out of Springfield that the Democrats are preparing an Illinois state budget that accounts for the expiration of the temporary income tax hike they approved in 2011. Doug Finke reported on The State Journal-Register website last night:

House Democrats are preparing a new state budget that allows most of the temporary income tax increase to expire on schedule at the end of the year.

“Today we’re going to have our (budget negotiators) working toward a middle-of-the-road budget that would be consistent with the revenue estimates which have been adopted by the House,” House Speaker Michael Madigan, D-Chicago, said Monday. “The income tax increase would not be extended.”

From an Associated Press piece earlier today:

House Speaker Michael Madigan emerged from a Memorial Day caucus meeting and told reporters he was dropping the idea of making the 5 percent income tax permanent — and crafting a budget blueprint that holds the line on spending but is not the “doomsday” plan the House overwhelmingly rejected Friday.

“We’re going to call upon the agencies and those that receive appropriations from the Legislature to live within their means,” said Madigan, a Chicago Democrat. “We understand the way this is… Let’s take a good hard look at it and get the job done.”

So does this mean Illinois Democrats have abandoned their push to make the temporary income tax hike permanent? I doubt it. This is “Madiganistan,” after all. And what Mike wants, Mike gets.

I wouldn’t be surprised to see some sort of maneuvering being carried out to eventually land these funds. Perhaps another “temporary” increase in such taxes sometime after the November 2014 election, with buzz words such as “fiscal emergency” and “for the children” being used to justify the measure?

Stay tuned…

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Finke, Doug. “House Democrats work on budget without tax increase.” The State Journal-Register. 26 May 2014. (http://www.sj-r.com/article/20140526/NEWS/140529531/). 27 May 2014.

“Illinois Democrats give up on tax-hike extension.” Associated Press. 27 May 2014. (http://www.chicagobusiness.com/article/20140527/NEWS02/140529846/illinois-democrats-give-up-on-tax-hike-extension#). 27 May 2014.

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Cook County Homeowners Could See Property Tax Hike To Pay For Pension ‘Reform’

Last week, I blogged about the possibility of property and/or sales taxes going up soon in Cook County, Illinois. Dave McKinney and Brian Slodysko reported on the Chicago Sun-Times website on May 13 the hikes might occur as part of a pension “reform” bill.

Hal Dardick and Monique Garcia added on the Chicago Tribune website tonight:

Cook County Board President Toni Preckwinkle hit Springfield Thursday to try to build support for changes to the county pension plan that she says would halt its ongoing decline toward insolvency.

She met with Senate President John Cullerton House Speaker Michael Madigan, both Chicago Democrats, and also Republican legislative leaders. “I think she’s got a good chance to pass this bill,” Madigan said afterward…

Although Preckwinkle has not identified how she would pay for her plan, it calls for the county to put $144 million a year into the pension fund. If funded with property taxes, that would cost the average homeowner up to $65 more a year, starting in 2017, according to one internal county document the Tribune obtained.

Preckwinkle, however, said Wednesday that she has closed even larger budget gaps through cuts and other, smaller scale tax and fee increases without raising property taxes — while also lowering the county sales tax by a half-cent on the dollar…

(Editor’s note: Bold added for emphasis)

Yet, McKinney and Slodysko wrote last week:

County officials do not believe they can cut enough from the budget to cover the cost, the source said…

(Editor’s note: Bold added for emphasis)

Stay tuned. It’s only a matter of time before Chicago and Cook County politicians get around to raising property taxes on a regular basis, if you ask me.

What’s that line I keep repeating on this blog?

Higher fees, fines, and taxes. Less government services.

As much as I hate saying it, that’s what Chicago and Cook County residents should be preparing themselves for down the road.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Dardick, Hal and Garcia, Monique. “Preckwinkle hits Springfield on pension plan.” Chicago Tribune. 22 May 2014. (http://www.chicagotribune.com/news/politics/clout/chi-preckwinkle-hits-springfield-on-pension-plan-20140522,0,4698464.story). 22 May 2014.

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Thursday, May 22nd, 2014 Entitlements, Fiscal Policy, Government, Taxes No Comments

Cook County Property, Sales Tax Hikes Coming Soon?

Property and/or sales taxes could be going up soon in Cook County, Illinois, as part of a pension “fix.” Dave McKinney and Brian Slodysko reported on the Chicago Sun-Times website last night:

Officials are putting the finishing touches on a Cook County worker pension reform bill that is soon expected to emerge in Springfield, the Chicago Sun-Times has learned.

The bill will cut retiree benefits and require workers to pay more toward their pension funds. But it will not address an estimated $144 million in new annual revenue that’s needed to fully fund the pension accounts in 20 years, a source with knowledge of plan said Tuesday.

That decision would be made by the Cook County Board following November’s gubernatorial election, officials with knowledge of the plan said.

But the money will likely be raised through a tax hike — either a sales tax hike, a property tax hike, or a combination of the two — in Cook County, the source said.

That’s because county officials do not believe they can cut enough from the budget to cover the cost, the source said…

(Editor’s note: Bold added for emphasis)

Survival And Prosperity readers shouldn’t be surprised to hear this. I blogged back on April 10:

For a while now (last time being earlier this week), I told my girlfriend we were lucky to have escaped the fiscal debacle and revenue grab going on in the city of Chicago.

At the same time, I pointed out that as Cook County residents we’re still on the hook for the same type of nonsense.

Brian Slodysko reported on the Chicago Sun-Times website yesterday afternoon:

Hoping to ward off another credit rating downgrade, Cook County Board President Toni Preckwinkle said Wednesday that she will soon present a plan to reform the county’s underfunded pension system.

And she’s leaving the door open to hiking property, sales and other taxes.

When asked repeatedly about the possibility of tax increases, Preckwinkle responded: “We’re looking at all the options. Everything is on the table.”

(Editor’s note: Bold added for emphasis)

Slodysko and McKinney were the only ones talking about the proposed pension “fix” on the local news sites I visited this morning.

Which is kind of sad, if you ask me.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

McKinney, Dave and Slodysko, Brian. “County pension reform headed to Springfield.” Chicago Sun-Times. 13 May 2014. (http://politics.suntimes.com/article/springfield/county-pension-reform-headed-springfield/tue-05132014-714pm). 14 May 2014.

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Wednesday, May 14th, 2014 Entitlements, Fiscal Policy, Government, Taxes No Comments

Gallup Poll: 1 In 4 Illinois Residents Say It’s The Worst State To Live

“Well, if they’re in Illinois today, they’re probably so much in love with Illinois that they’re not going to leave.”

-Illinois Speaker of the House Michael Madigan (D- Chicago), while pitching the idea of raising income taxes on Illinois millionaires back on March 20, 2014 (Source: Chicago Tribune, March 21, 2014)

I’m blessed to be surrounded by lots of good people here in the state of Illinois. I was reminded by that fact yesterday while cheering on athletes at the Special Olympics (Illinois) Spring Games over in Mount Prospect (a far northwest suburb of Chicago).

Yet, many Illinoisans just aren’t enamored of their home state.

Justin McCarthy wrote on the Gallup website last Thursday:

When asked to rate their state as a place to live, three in four Montanans (77%) and Alaskans (77%) say their state is the best or one of the best places to live. Residents of Rhode Island (18%) and Illinois (19%) are the least likely to praise their states…

Illinois has the unfortunate distinction of being the state with the highest percentage of residents who say it is the worst possible place to live. One in four Illinois residents (25%) say the state is the worst place to live, followed by 17% each in Rhode Island and Connecticut.

Throughout its history, Illinois has been rocked by high-profile scandals, investigations, and resignations from Chicago to Springfield and elsewhere throughout the state. Such scandals may explain why Illinois residents have the least trust in their state government across all 50 states. Additionally, they are among the most resentful about the amount they pay in state taxes. These factors may contribute to an overall low morale for the state’s residents…

(Editor’s note: Bold added for emphasis)

“One in four Illinois residents (25%) say the state is the worst place to live”

Can’t say I’m too surprised to hear this.

At the same time, I’d like to know what, if anything, those Illinois respondents that feel that way are doing about the situation.

Even with a renewed embrace of civic duty and engagement on their part, I fear the Ubi Est Me? (“where’s mine?”) brigade and legions of disgusted and indifferent voters in the state are just too many at this point, sealing the “Land of Lincoln’s” eventual fate.

According to Gallup, the results were based on a special 50-state poll conducted from June through December 2013, where interviews were conducted with at least 600 residents in each state.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

McCarthy, Justin. “Montanans, Alaskans Say States Among Top Places to Live.” Gallup.com. 24 Apr. 2014. (http://www.gallup.com/poll/168653/montanans-alaskans-say-states-among-top-places-live.aspx). 28 Apr. 2014.

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Monday, April 28th, 2014 Corruption, Government, Taxes No Comments

Illinois Graduated Income Tax Plan To Be Voted On Tuesday

Next week, the Illinois Senate looks to be taking up the issue of income taxes. Rick Pearson reported on the Chicago Tribune website this morning:

A key Democratic state senator said Thursday he will seek a vote Tuesday on his controversial plan to ask voters to amend the state constitution to replace Illinois’ flat-rate income tax with a graduated tax based on the amount of income earned.

“We understand it is a difficult choice, but we’re simply asking that the voters be allowed to weigh in and make a decision about tax policy and how Illinois should tax income,” Sen. Don Harmon of Oak Park said during an appearance between proponents and opponents of the plan before the Tribune editorial board…

(Editor’s note: Bold added for emphasis)

Opponents claim a graduated income tax would just be a substitute for the expiring temporary income tax hike Illinois Democrats pushed through at the beginning of 2011. I blogged back on January 13, 2011:

The legislation that was pushed through by Democratic lawmakers, who have controlled Illinois state government since 2003, hikes the 3 percent personal income tax rate to 5 percent until 2015, when the rate is supposed to drop to 3.75 percent…

As for the chances of the graduated income tax becoming reality? Pearson added:

Prospects for achieving a three-fifths vote of senators in the Democratic-controlled chamber are considered good, getting the same super-majority in the Democratic-led House is believed questionable at best…

Still- any Illinois readers out there not liking the proposed changes should contact their state legislators ASAP.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Pearson, Rick. “Illinois graduated income tax vote next week.” Chicago Tribune. 25 Apr. 2015. (http://www.chicagotribune.com/news/politics/clout/chi-illinois-graduated-income-tax-vote-next-week-20140424,0,3929251.story). 25 Apr. 2015.income tax

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Illinois Policy Institute: ‘Illinois Is Exporting Its Higher-Income Earners’

From time to time, I’ll talk about the Illinois Policy Institute, a Chicago-based non-partisan research organization that works “to make Illinois first in economic outlook and job creation.” The last time I blogged about the Institute, they had just released a report about Illinois having the most units of local government of any state in the country.

I happened to stop by their website the other day and something disturbing caught my eye. On March 27, Michael Lucci, the Institute’s Director of Jobs and Growth, talked about the state’s tax structure driving away businesses. He wrote:

There’s no telling how many businesses have left or expanded elsewhere over the years.

Caterpillar Inc. announced this week that it will expand in Georgia, AM manufacturing is leaving for Indiana and OfficeMax Inc. famously decided on Florida over Illinois.

That’s exactly what millions of people are doing. On net, 1.25 million more people have left Illinois than entered since 1985. Not only that: The average taxpayer who leaves Illinois earns $65,400. The average taxpayer who enters Illinois earns $56,700.

It’s clear what is happening. Illinois is exporting its higher-income earners, who are also job creators and investors…

(Editor’s note: Bold added for emphasis)

Regular readers of Survival And Prosperity shouldn’t be too surprised at these findings.

Back on January 9, I talked about a press release associated with United Van Lines’ 37th Annual Migration Study, which found Illinois was the number two outbound state for a second year in a row in 2013.

And on February 27, I discussed a February 14 Crain’s Chicago Business piece that said Cook County lost about 13,000 residents with six-figure household incomes to other places during the Great Recession.

Regrettably, the politicians and their mouthpieces will keep peddling the spin about how individuals and businesses are tripping over themselves to move into the state. Meanwhile, the exodus from the “Land of Lincoln” will likely continue for the foreseeable future.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Lucci, Michael. “Illinois’ recipe for exodus: 7 different tax structures proposed for 2015.” Illinois Policy Institute. 27 Mar. 2014. (http://www.illinoispolicy.org/illinois-recipe-for-exodus-7-different-tax-structures-proposed-for-2015/?utm_source=outbrain). 17 Apr. 2014.

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Shocking: Illinois ‘Pole Tax’ Fails To Bring In Projected Revenue

How many times have we seen politicians push some new controversial tax (often a “sin” tax), telling consitutents tons of new money will be coming in if its implemented.

And how many times has this turned out not to be the case, with actual revenue collected nowhere near what was “projected.”

Still, the dubious tax remains on the books as yet one more financial burden on the citizens.

Enter the Illinois “Pole Tax.”

From The State Journal-Register (Springfield, Illinois) website on August 18, 2012:

Strip clubs in Illinois will have to hand over a share of their revenues, starting in 2013, to help fund programs to prevent sexual assault and counsel victims under a law signed by Gov. Pat Quinn on Saturday.

The measure establishes a new tax on the clubs that will raise up to $1 million a year, helping to reverse several years of funding cuts for rape crisis centers. The legislation has also sparked debate over how strong of a link can be drawn between strip clubs and violent crime, and whether those businesses should pay out to fight the problems…

The law, which takes effect Jan. 1, will place an annual surcharge on strip clubs that have live nude dancing and permit alcohol. Businesses could pay $3 per customer or pay a graduated amount based on their sales. The money will go to a special fund devoted to preventing sexual violence and counseling its victims…

(Editor’s note: Bold added for emphasis)

Fast forward to this morning on the same website, which now reads:

Illinois officials say a strip club tax has generated less than 40 percent of the money that was expected when the surcharge was approved.

The Springfield bureau of Lee Enterprises newspapers reports the “pole tax” raised about $380,000 in 2013. That’s far less than the $1 million predicted when the measure passed the General Assembly in 2012…

(Editor’s note: Bold added for emphasis)

Like with other sin “taxes,” one might wonder if the Illinois “Pole Tax” is really about restoring funding for rape crisis centers in the state, or is actually meant to drive out the “nudie bars” from Illinois.


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Come to think of it, I wonder how much money Cook County raked in with its $25 per-gun tax on firearm purchases after a full year of being on the books. That “Violence Tax” went into effect on April 1, 2013.

Hal Dardick reported on the Chicago Tribune website back on October 31, 2012:

The gun tax would raise $600,000, Budget Director Andrea Gibson said…

We’ll see, as I suspect someone will be publicizing that actual number soon.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

“Illinois strip club tax will fund rape crisis centers.” The State-Journal Register. 18 Aug. 2012. (http://www.sj-r.com/x1167780465/Illinois-strip-club-tax-will-fund-rape-crisis-centers). 16 Apr. 2014.

“Strip club tax brings in much less than expected.” Associated Press. 16 Apr. 2014. (http://www.sj-r.com/article/20140416/NEWS/140419556). 16 Apr. 2014.

Dardick, Hal. “Preckwinkle drops bullet tax, keeps gun tax.” Chicago Tribune. 31 Oct. 2012. (http://www.chicagotribune.com/news/local/breaking/chi-preckwinkle-drops-bullet-tax-keeps-gun-tax-20121031,0,3962662.story). 16 Apr. 2014.

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Wednesday, April 16th, 2014 Firearms, Fiscal Policy, Government, Taxes No Comments


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