Category Archives: Illinois Finances

FIFTEEN AN HOUR – NOT THE SAME

11 Monday Feb 2019

Posted by in Economy, Illinois Finances, Politics

≈ Leave a comment

I was born and raised about 265 miles south of Joliet and we go back to see relatives a few times a year. My grand niece is a fifth grade teacher. Her school system is getting some support from one of the few coal mines in the state. The starting pay in her school is $34,702 per year. Starting pay for Minooka grade school is $42,073.

The pay scale for state workers is the same in Chicago as in Cairo. A state senator or representative is the same anywhere in the state. The Democrats in Springfield want to raise the minimum wage to $15 per hour. In most of the upper part of the state $30,000 is going to get the wage earner off of any state aid but into food pantries or living at the parent’s home. Try raising a family on that much. Granted it will not get that high until 2025 and inflation will have raised the actual cost-of-living.

One proposal is for the minimum wage to be based on a geographical tier. The farther south a wage earner lives the less the minimum would be or the longer it would take to reach that $15 per hour. Both are sound and fair proposals since the living costs are less in the south end of the state. A fair living in northern Illinois is what is called living high off the hog in southern Illinois.

One complaint about a-shoe-fits-all approach is the businesses will have trouble earning a profit when the labor costs rise. The obvious solution is to raise prices a little. Most places can do that but a manufacturing business I brokered a deal on might not be able to compete. Others in the area are competitive because their labor costs are close to those in Indiana, Missouri, and Kentucky.

Will a tiered system for minimum wage be enacted? Maybe this is because the poor don’t contribute to campaign chests or are politically active. Two other reasons are pay for state workers. Tiering state workers would cause union unrest. I know of no state which does that but it would make good sense for Illinois. The other reason is if the legislature tiered the other workers, wouldn’t we think it was a great idea to tier our senators and representatives salaries?

One cost savings to the state should be a reduction in state aid to those making minimum wage. Savings would be partially in rent, food and other subsidies. I doubt any additional revenue will come from taxing the higher wage because it will probably be offset by a reduced net income from businesses.

With all the pluses and minuses involved, I believe we should fully support the raises and hopefully on a geographically tiered salary schedule.

Quit Wasting Our Money

26 Saturday Jan 2019

Posted by in Drugs, Illinois Finances, Politics

≈ Leave a comment

Every Illinoisan knows the state is in deep financial trouble so why would we want to do a capital bill. This morning I heard Republican Senator Sue Rezin wants to push through a capital bill to be paid for by a tax on recreational marijuana. The announcer said she wanted the money to not be kept at the state level but to go all the way down to the townships.

That idea isn’t hers alone. In fact, it is another ploy to get people to want to pass an ill-advised marijuana law. There are many reasons we don’t need thousands of legally drugged out people on the roads (there is no roadside test.), cooking my food, carrying a gun, or any of a myriad other concerns. Ask people in Colorado and some will be honest enough to quote the increased deaths, wrecks, emergency room visits, and users. New evidence shows edible marijuana causes psychological problems including murder during rages.

If the inane law were to pass, the money should go to putting the state in a better financial condition, not incurring another expense. When the Republicans and the Democrats want to join together to tax and spend, Illinois is in danger of bankruptcy. Getting into this mess was bi-partisan and apparently not getting out of the mess is also bi-partisan.

As in most, if not all, states, Illinois legislators have money to give for local projects. (It’s the same aldermanic practice in Chicago.) In Grundy County, our townships already have lots of tax money for roads, bridges, and winter time. The more political entities involved in spreading grants around, the more that will be wasted on unnecessary projects.

Many of the people who want to pass a recreational law are the same people who argued against riverboat gambling and a Chicago casino on moral and religious grounds. Now those same people want to tax a product they were against. They think that the money will go into the state’s treasury for good use. Their moral roots should also be against unpaid debts and potential bankruptcy.

We already have tens of thousands using the drug today illegally and thousands using it for medical purposes. The medical community has shown specially modified (all marijuana is modified) marijuana without THC gives the same results. Hemp products can give the same results without a high.

If the legislature passes a recreational bill, every tax dollar must go to pay down unpaid bills and then pension shortages. We must not continue to waste money for political gain. When Springfield gets it head straight and forgets politics and getting re-elected, I believe our elected and appointed officials can fix the problems.

Responsibility or Party Ideology

19 Saturday Jan 2019

Posted by in Illinois Finances, Politics

≈ Leave a comment

Another View
The January 16 episode of Chicago Tonight had a segment about Illinois Governor Richard Ogilvie. He was a one-term governor whose Republican administration was faced with many crisis level problems. The most critical was the lack of money in the bank. Government employees couldn’t get a check because the state was literally bankrupt. The state borrowed money to solve the immediate problems but a long term solution would require doing something that was and is an anathema to the Republican Party — an income tax. He went against his party’s philosophy to save the state and its people. Putting the state on a firm financial footing cost him the election. Later governors did what their party ideology demanded so they would have a shot at re-election.

We know many of the founding fathers were concerned what could happen with political parties from their experiences in and with the English parliament. The hope was the dissidence from trying to write the constitution would disappear in a few years. Not only did it not, it became stronger.

The financial difference today between the Democratic Party and the Republican Party seems to be the Democratic Party wants to help the common people and raise taxes. The Republicans want to help the rich and businesses with tax cuts.

Today we have a rapidly growing National debt that was well on its way to being eliminated until President George W. Bush (Dick Cheney) put through a massive tax cut which couldn’t be reversed by Obama because of the Great Recession. When the economy turned around, Obama had a Republican Congress. The debt continues to increase. Then President Donald Trump came along and cut taxes again. Now the debt meters are turning at an unreadable speed. With the rest of the world running up debt, too, our situation could become unmanageable. A tax increase is a necessity!

Illinois has a new Democratic Governor who has a philanthropic history of helping people with his vast wealth. The previous governor had great wealth but thought a state was like running a business. The state was not in good financial shape when he came in and he left it in a much worse shape because he didn’t want to renew the expired tax.

The question for Illinois is if Governor Pritzker can get the state’s financial condition on a sustainable path. During his first term, he must devote his administration’s effort to paying off the hundreds of millions in unpaid bills, reversing the growing pension debt, and spending some funds on critical infrastructure repairs. The latter must be really critical repairs with nothing going to political back scratching projects. Debt first, everything else second.

Pritzker must be like Ogilvie and solve Illinois’ financial problems first and not pass the problems on to the next governor.

Illinois Taxes Not Too High

17 Tuesday Apr 2018

Posted by in Illinois Finances, Illinois Taxes

≈ Leave a comment

Tags

Using my trusty 2015 reference book, I find Illinois does not have the highest income tax rate. Our current rate is 4.95%. The rate is modified because of all the deductions reducing the taxable income other states don’t have. Some states have a graduated tax so for this comparison. I used married, filing jointly, and $70,000 from the federal adjusted gross income.

These are the twenty-seven states with taxes higher than ours: Alabama – 5%. Arkansas – 7%, California – 8%, Connecticut – 8%, Delaware – 6.6%, Georgia – 6%, Hawaii – 7.6%, Idaho – 7.4%, Iowa – 8.98%, Kentucky – 5.8%, Maine – 7.95%, Massachusetts – 5.15%, Minnesota – 7.05%, Mississippi – 5%, Missouri – 6%, Montana – 6.9%, Nebraska – 6.84%, New York – 6.45%, North Carolina – 5.75%, Oklahoma – 5.25% Oregon – 9.9%, South Carolina – 7%, Utah – 5%, Vermont – 6.8%, Virginia – 5.75%, West Virginia – 6.5%, and Wisconsin – 6.27%. Many of those lower than us are suffering through budget crisis as are some of the above. Some of the lower ones have other sources of income from oil, gas, and mining.

Some of the above rates are based on AGI, others on gross. Most have no deductions or exemptions.

Our current Governor wants to reduce our rate to 4.70% when we still have a billion in overdue bills. The challenger wants to try to amend the Constitution to allow a graduated tax. Both ignore the pension debt.

The best way to change the tax income is to tax all state pensions at the current rate when the checks are sent out. This would mean those living in or out of Illinois would pay the tax. The pensions were earned here and should be taxed here. Taxing pensions is legal. It only takes guts from the people we send to Springfield! It would raise taxes on my family also.

State Finance Debacle

02 Friday Mar 2018

Posted by in Illinois Finances

≈ Leave a comment

Tags

As someone who straddles the political fence, this is my thoughts on how Illinois’ financial mess could be fixed or at least eased somewhat. I think the pain should be spread among all of us. Political mismanagement by both parties has created this mess and both need to clean it up.

Among the state’s problems is an almost nine billion backlog in bills and a hundred billion pension debt. (It supposedly goes up with bad or good economics.) To solve the backlog, paying the bills should be first priority over all non-emergency infrastructure repairs and any new projects until bills are current.

The pension fix may require a quick decision from the Illinois Supreme Court or an amendment to Article XIII, section 5, so all state pensions over $40,000 would be subject to state taxes. The tax would be added to the mandated yearly payment. Additionally no new retiree shall be entitled to more than one state pension. Teachers, for instance, need to be allowed to get full Social Security as 43 other states allow as compensation for their pension being taxed. They pay into Social Security in their private sector jobs but can’t receive full, if any, Social Security if they stay in Illinois. Many teachers are burned out and retire at forty-two after 20 years and most by fifty-two after 30 years.

Everyone knows that our State needs massive infrastructure repairs and new facilities so I think the state gas tax should be raised fifteen cents before Congress raises it twenty-five cents. Until we go to Oregon’s mileage based tax, revenues will decrease due to high fuel efficiencies and electrics. As I close in on a million miles driven, I think it is a fair tax.

These ideas should be a basis for righting the ship of state.