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Illinois Democrats Seek To Tax Their Way Out Of Fiscal Mess


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2015 May 28, 6:55am   28,490 views  73 comments

by zzyzzx   ➕follow (7)   💰tip   ignore  

http://news.investors.com/ibd-editorials/052715-754539-democrats-in-springfield-avoid-cuts-seek-taxes-instead-to-close-budget-gap.htm

States: Illinoisans voted in November to end a generation of cronyism, corruption and financial malfeasance by electing Republican reformer Bruce Rauner as governor. Now, just six months later, the empire is striking back.

In this case, the Death Star is the teacher unions. At their behest, the state House and Senate are preparing to send Rauner a bloated $36 billion budget that they know is $3 billion out of balance.

Our sources in Springfield, however, say that the legislature is using budget gimmicks and the real spending gap is far more. Democrats approved a spending plan that thumbs its nose at the cuts Rauner requested.

It's a brazen power play by House Speaker-for-life Michael Madigan.

He knows that his brinksmanship violates a constitution that makes clear "appropriations for a fiscal year shall not exceed funds estimated by the General Assembly to be available during that year."

In other words, the budget must balance. But the wily speaker is trying to trap the governor into a fiscal corner in which the only way out is a tax increase.

Madigan wants a return to budget business as usual in Illinois, a state with some of the nation's highest property, business and sales taxes, one of the worst credit ratings and a pension mess that rivals that of California for its severe underfunding.

Moody's recently downgraded Chicago bonds to junk status. Does anyone in his right mind think tax increases are the answer to Illinois' financial Hindenburg?

Actually, the Democrats thought they could tax their way out of the disaster back in 2012. So they raised income taxes by one-third and corporate taxes to the fourth-highest in the nation.

It was the biggest tax hike in Illinois history, and guess what? The fiscal crisis got worse, because the solons in Springfield spent all that extra money, too. Tax hikes, as Ronald Reagan used to say, were like giving an alcoholic another bottle of booze.

Rauner has sought common-sense pension reform, workers' compensation repairs (the state has lost 300,000 manufacturing jobs in the last 15 years) and a property tax freeze. He proposed to negotiate with Democrats, but they rejected all of these changes.

The state Supreme Court has also made budget-balancing much harder by declaring unconstitutional a plan, which the legislature already approved, to trim pension costs. The unfunded pension liability is now estimated at more than $100 billion. More than 5,000 teachers and other education officials get annual pensions that top $100,000, and many retire at age 60.

#politics

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72   marcus   2015 Aug 5, 12:58pm  

zzyzzx says

It's called a 401K.

But if a 401K can build enough equity to pay for retirement, then a pension could too. The only difference is the pension is forced savings and forced employer contribution. Salary is going to be less.

What you're missing, is that is it's left to the individual, and they don't plan well, the govt is going to have to pay some minimal cost of living for these folks betweensay age 75 and 95 (if they live that long) anyway. Better to include it in their pay, as something the worker can't touch.

73   zzyzzx   2015 Aug 5, 1:02pm  

marcus says

What you're missing, is that is it's left to the individual, and they don't plan well,

And the government does???

Freedom = responsibility.

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