Illinoisans: Vote “No” on the Unfair Tax Amendment

By John Ruberry

I’ve mentioned this profound sentenced from a 2016 Chicago Tribune editorial several times here before at Da Tech Guy. “As a result, Illinois government,” the newspaper’s editorial board wrote, “is a massive retirement system that, during work hours, also offers some services.”

It’s actually worse than than that. Illinois is a racket where elected politicians, many of them legislators in gerrymandered districts created by longtime party boss Michael Madigan, rewards pals with unionized jobs. Those unions are public-sector unions such as AFSCME and SEIU, which plow campaign contributions from dues money into the coffers of Democratic politicians who protect unaffordable pension plans from any cuts. Okay, I know, in accordance with the state constitution pension benefits cannot be lowered. An amendment to that document to allow pension reform is vehemently opposed by Illinois Democrats. 

Instead the Dems are pushing what they call the Fair Tax Amendment which will allow for a state income tax with graduated rates, currently only a flat rate is prohibited. Eight states, including Florida, Nevada, Texas, and Tennessee, which coincidentally are popular destinations for escapees for Illinoisans, have no state income tax. Most Illinoisans, we are promised by the pols hawking the Fair Tax Amendment, will see a tax cut, albeit one that is a pittance. If what I call the Unfair Tax Amendment passes, the “rich” will pay more but mark my words. Springfield politicians are liars and the tax rates will reach down in a few years to the middle class and the working poor. That’s because the rich will leave and those left behind will get stuck with the bill. Oh, the others will leave too. Don’t forget, Illinois has lost population every year since 2014.

The Fair Tax Amendment is on the ballot for Illinois voters to decide in November.

As I’ve also mentioned here before, Michael Madigan, the state House speaker for 35 of the last 37 years, has had his fingers on every state budget, and every failed pension fix, for decades. Those “fixes” for the most part kinda-sorta solved the pension crisis for five years or so. Which means they solved nothing.

If you trust Madigan to fix Illinois’ pensions and finances then you are a fool. The Prairie State’s second-most powerful politician, another Chicago Democrat, Governor J.B. Pritzker, was arguably put into office by the Madigan machine. Illinois’ lieutenant governor, Juliana Stratton, first run for public office, a state House seat, was a victorious one. In a very expensive race Stratton defeated another Democrat who dared to cross Boss Madigan. The Boss of Illinois even convinced Barack Obama to go after Stratton’s opponent.

In a conference call on Thursday Stratton threatened Illinois residents with a twenty-percent across the board income tax hike if the Unfair Tax Amendment fails. In 2017 the General Assembly overrode Republican governor Bruce Rauner’s veto to raise income taxes by 32 percent. Still at the end of 2019, Illinois’ unfunded pension liability went up by $3.8 billion to nearly $140 billion. Well, that tax hike didn’t work. Keep in mind Pritzker’s heavy-handed COVID-19 lockdown, which has severely impaired state revenues, promises to provide more financial shocks. 

And I want to be clear, some Republicans, namely governors James Thompson, Jim Edgar, and George Ryan, deserve some of the blame for Illinois’ predicament. Democrat Rod Blagojevich, the recently freed convict who supports Donald Trump for president, was equally irresponsible in fiscal matters during his time as governor. Edgar supports Joe Biden over Trump. Man, oh man, is Illinois a crazy place.

Illinois cannot tax itself out of this human-made disaster. A Fair Pension Amendment, one that protects modest pensioners and Illinois taxpayers, is the best way out. Followed by a Fair Map Amendment. Madigan’s Picasso-like gerrymandering skills in drawing maps puts his lackeys in office in the General Assembly. For the most part the Illinois legislature functions like a private country club, one that allows a few Republican members inside to make it look genuine. Twice in the 2010s hundreds of thousands of Illinois voters signed petitions to put a Fair Map Amendment on the ballot. Twice an attorney with ties to Madigan successfully sued to block it

How adept at gerrymandering is Madigan? In 2014, GOPer Rauner won 101 of Illinois 102 counties and defeated the incumbent Democratic governor. But Madigan didn’t lose a single seat in the state House that year and he kept his supermajority in the lower chamber. Yes, I’m aware that the GOP gerrymandered districts in 1991. That’s wrong too.

Illinois government is a failure.

And one party does not have all the right answers. Yes, that includes Republicans. Which is why we need two parties.

The Fair Tax Amendment is really a public-sector worker pension plan bailout where millions of Illinoisans, who don’t have a fixed-benefit pension plan, will pay for ones who do.

As I wrote in my own blog last week, “If Illinois politicians are ever given an unlimited budget–they will exceed it.”

The cure for a heroin addict isn’t a larger dose of heroin.

Illinoisans: Vote “No” on the so-called Fair Tax Amendment. 

John Ruberry regularly blogs at Marathon Pundit.

Illinois should put itself under receivership over pensions

Blogger two years ago

By John Ruberry

“As a result, Illinois government is a massive retirement system that, during work hours, also offers some services.” Chicago Tribune Editorial Board in 2016.

“You never let a serious crisis go to waste.” Rahm Emanuel in 2009.

Last week the president of the Illinois state Senate, Don Harmon (D-Oak Park), sent a letter the state congressional caucus, a gerrymandered lot–more on that latter–asking for $41 billion in aid in response to the COVID-19 outbreak.

The devil is in the details–Illinois is a hellish place—and in that letter from Harmon is a request of $10 billion to fund its woefully-underfinanced public pension plans.

Illinois’ pension crisis goes back decades. In 1989 Governor Jim Thompson, a Republican, signed into law an annual compounded three-percent cost-of-living-adjustment for the state’s public pensioners. But the funding wasn’t there. His successor, Jim Edgar, another Republican, seemingly placed a fix into the system in 1994, “the Edgar ramp,” which started with low payments for the 15 years of his plan. But by that time, when the “ramp” was to kick in, Great Recession arrived. And there were “pension contribution holidays” before then. When the 2008 economic collapse hit Rod Blagojevich, who was as bad as math as Edgar and Thompson, was governor.

In the early 1990s pension payments consumed four percent of the Illinois budget–now it’s 25 percent. The state-controlled public pension plans are only about 30 percent funded.

All that time–except for two years–powerful Chicago Democrat, Michael Madigan, has been speaker of the state House.

According to the Illinois Policy Institute, 19,000 state pensioners collect more than $100,000 annually. On average these pensioners paid a paltry $160,000 into their retirement plans. What a great deal!

New Jersey and Kentucky have public pension funding issues that are as bad, or perhaps slightly worse, than that of Illinois. Will they be asking for pension bailouts next?

Cutting the three-percent COLA has been tried–it was ruled unconstitutional in a unanimous decision by the Illinois Supreme Court because of the pension guarantee clause in the state constitution. Repealing that clause is the smart thing to do but it’s a politically tall hurdle. Such an amendment would likely have to pass both chambers of the General Assembly. Thanks to Madigan, a skilled gerrymanderer who is also the chairman of the state Democratic Party, there are Dem supermajorities in both chambers. Two attempts by petition to effectively ban gerrymandering by way of a constitutional amendment was struck down in court. Allies of Madigan were behind the anti-Fair Map suits. The petition process to amend the Illinois constitution is deeply flawed. 

The organized labor wing of the Democratic Party, the public sector unions, won’t remain quiet if pensions are challenged. Hey there unions, you contributed to this problem too. In 2005 most public service unions signed on to that year’s pension holiday.

Last week Fitch lowered its bond rating for Illinois to BBB- with a negative outlook. That’s one level above junk.

I’m against an Illinois pension bailout by the federal government. For the most part. But if such aid comes in the form of an International Monetary Fund-style rescue package with conditions that Illinois cleans its fiscal house, such as dropping the 3-percent COLA and taking aim at the top pension earners, those six-figure retirees, I’m willing to listen. 

But receivership is best. Okay, let me dream a bit. As Chicago architect Daniel Burnham said a century ago, “Make no little plans; they have no magic to stir men’s blood.” I know, states are viewed as sovereign entities and cannot, as Detroit did in 2013, declare bankruptcy. But what if Illinois agrees to a strings-attached receivership deal? An emergency manager can be appointed. Pritzker, or whoever is governor if receivership comes about, can still handle the ceremonial stuff, such as ribbon cutting for a new bridge and placing bets with other governors when Chicago sports teams are playing for a league championship.

Oh, I’m thinking loans from the feds, not handouts.

As badly funded as Illinois’ pension plans are, many local government pension systems are in worse shape. Illinois municipalities and government agencies, unlike those in Michigan, cannot do so under current state law. That needs to change too.

On a personal note, several friends and relatives of mine are collecting state pensions. Money that was taken from their checks every two weeks for their retirement was instead spent on lord-knows-what. They deserve to be angry and that fury needs to be directed at every Illinois governor from Thompson through Blagojevich. And of course at the Where’s Waldo of Illinois failure, Boss Michael Madigan. He deserves the most rage.

Let me be clear: I don’t take my pension reform views lightly.

Prior to Harmon’s bailout request, the latest pension fix idea was a constitutional amendment to eliminate the Illinois flat income tax guarantee and replace it with a graduated one. That amendment will be presented to Prairie State voters in November. My guess is that it will fail. And even if the graduated income tax amendment passes, the additional revenue won’t be enough. Illinois, which has had negative population growth for six straight years, can’t tax its way of the mess.

John Ruberry regularly blogs from Illinois at Marathon Pundit

I oppose Trump’s commutation of Blagojevich sentence

By John Ruberry

“I didn’t cross any lines I didn’t break any laws,” disgraced former Illinois governor told Rod Blagojevich Fox Chicago’s Larry Yellen in his first interview after his 14-year prison sentence was commuted by President Donald Trump.

Blago did both, which is why I oppose Trump’s commutation. I’m also on the other side of the opinions of my conservative friends and relatives here in the Land of Lincoln. Two of them are lawyers who have tried cases in front of now-retired federal judge James Zagel, a Ronald Reagan appointee. One of those attorneys remarked to me that he was “a hardass with a tin ear.” When I pointed out that one of the counts that the Chicago Democrat was convicted was for was attempting to extort a children’s hospital, he conceded, “Yeah, that was a bad one.”

So is trying to sell a US Senate seat to the highest bidder. As is lying to federal agents.

“I will govern as a reformer,” is what Blagojevich declared in his first inaugural address. His idea of reform was replacing the crooks and ward heelers surrounding his predecessor, Republican George H. Ryan, with his own crew of corruption. Blago’s friend and top aide Christopher Kelly was one of them. Shortly before he was to begin his five-year prison sentence, Kelly committed suicide. Two of Blagojevich’s chiefs of staff served time. Tony Rezko, his political fixer and fundraiser, served several years in federal prison. While they may have willingly been on board Blago’s corruption express, the former governor aided in ruining several lives.

Rezko of course was a key fundraiser in the early years of Barack Obama’s political career. The fixer and his wife played a role in the purchase of the Obamas’ Chicago mansion, the transaction has never been completely explained.

“He honestly believes he did nothing wrong,” Yellen told Mike Flannery this weekend about Blago on Flannery Fired Up

On my own blog I explained my opposition to the commutation with one caveat. If Blago spills the beans on what he knows about his political adversary, longtime state House speaker and Democratic Party chairman Michael Madigan, I’ll give Trump’s move a second thought. There is a current federal investigation of Illinois corruption and Boss Madigan’s name keeps coming up. True, whatever Blagojevich knows probably falls outside of the statute of limitations, but it can’t hurt either. Illinois needs to be power-scrubbed and sand-blasted. Illinois needs much more transparency. 

And as I’ve said many times, one way to finally clean up Illinois is to have judges like James Zagel impose maximum sentences on crooked pols and public workers. Fear is a powerful motivator. The 28-year sentence that former Detroit mayor Kwame Kilpatrick received–he had his hands in a lot more pots than Blagojevich–is a good example.

John Ruberry regularly blogs at Marathon Pundit.