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PI Original
by Adam Doster
Fri Aug 27, 2010

Elgin's Education Funding Quandry

School officials across the state are wary of Gov. Pat Quinn's new property tax relief proposal. Given the General Assembly's budget woes, it's hard to blame them.

Quick Hit
by Adam Doster
Thu Aug 26, 2010

A Mandated Tax Swap?

Gov. Pat Quinn has disappointed progressives by entirely dropping his emphasis on the need for fundamental tax reform, instead calling for a small 1 percent increase in the state's low income tax rate. Talking in front of the Illinois Bureau of Farmers, he added another caveat to his preferred plan: Quinn wants the legislature to pass a bill requiring schools to reduce property tax bills before they could receive additional state support via any income tax increase. Ralph Martire of the Center for Tax and Budget Accountability thinks this new plan "misses the point." From an email:

Education funding in Illinois is below the level needed to provide an adequate quality education as defined by the nonpartisan Education Funding Advisory Board. Not only that, but the state’s poverty grant is insufficient to fund the programs needed to overcome the education problems caused by poverty, and state and federal funding of special education is woefully inadequate to cover the huge unfunded mandate foisted on local schools to meet the needs of their special ed students. And this is by no means a comprehensive list of the woeful state of education funding here in Illinois. So even if the state puts a little more money into schools as Quinn proposes, it will come nowhere near the level needed to obviate any portion of the property tax revenue schools currently rely upon.

This spring, the Education Funding Advisory Board recommended that districts bump up the per pupil foundation-level spending by $2,000 a year. HB 174, on the other hand, would bring in $6 billion annually to pay for high-quality education (among many other obligations) while doubling the state's property tax credit for homeowners.

Quick Hit
by Micah Maidenberg
Wed Aug 25, 2010

Daley On TIF Talk: "Everybody Wants To Raid Something"

Chicago Mayor Richard Daley unleashed a barrage of insults against the financial acumen of unnamed state legislators at a press conference on the North Side yesterday. As noted by the Chicago News Cooperative's Dan Mihalopoulos, the mayor didn't specifically identify State Rep. John Fritchey, the Chicago Democrat who's now running for a seat on the Cook County Board of Commissioners. But Daley's remarks came two days after Fritchey announced that he'd introduce legislation in Springfield calling for non-appropriated funds stationed in the city's TIF districts to be returned to local taxing bodies at the end of each fiscal year. If passed, the bill would send roughly $535 million back to the Chicago Public Schools, which like many government bodies is struggling with deep budget deficits. But in what the News Cooperative characterized as "caustic" remarks, Daley told reporters this in discussing the TIF program and state legislators:

Everybody wants to raid something. I’m not going to listen to state government for financial advice. I’ll tell you one thing: The city of Chicago should not listen to the federal or state government for financial advice. We would be bankrupt today. We [should] not listen to them, your state senators or representatives. No way. Look what they’ve done with the state budget and now they’re telling us what to do with the city budget. No way.

While the top mayoral aides have not specifically ruled out declaring a TIF surplus and sending those dollars back to various city and county-based taxing bodies, Daley's comments yesterday are in line with his recent full-throated defense of how his administration uses and controls TIF dollars, including grants to profitable downtown corporations. With three public hearings about the Daley Administration's 2011 budget scheduled to start next month and a Fritchey aide recently telling Progress Illinois the representative will introduce the TIF surplus legislation within a few days, the issue appears to be coming to a head. But with the TIF program, Daley seems content with the status quo.

This post has been updated to correct how much would be sent back to CPS in TIF funds if Fritchey's bill was signed into law.

Quick Hit
by Adam Doster
Tue Aug 24, 2010

Savage: Illinois' Low Income Tax Way Too High

In a piece that leans heavily on analysis from the Institute for Truth in Accounting, Sun-Times financial columnist Terry Savage provides readers with some useful data about how much debt Illinois has accrued in recent years and how that might impact the average taxpayer. Her off-handed comment near the end of the article about the state's income tax, however, is a bit questionable:

Expect an increase in state income taxes. I'm not saying that's a good solution. In fact, I think it will be counterproductive in the long run. I actually believe that if we cut our state income tax in half, we'd create enough economic growth, and more, to make up for the difference.

On what data is Savage relying to make that bold prediction? Of the 41 states that impose an individual income tax, Illinois' 3 percent rate is the lowest in the nation. Only in supply-side fantasy land would dropping that rate even further lead to massive gains in economic growth. For more context about Illinois' income tax debate, check out the primer we published earlier this month.

PI Original
by Josh Kalven
Mon Aug 23, 2010

Daley's TIF Empire Gets Targeted In Springfield

Flanked on Sunday by Chicago Public Schools parents and the Chicago Teachers Union, State Rep. John Fritchey rolled out an ambitious package of proposals aimed at taking hundreds of thousands of dollars out of Daley's "piggy bank" and returning them to cash-strapped local schools.

Quick Hit
by Josh Kalven
Fri Aug 20, 2010

A Call For TIF Reform In Rockford

Last year, we closely covered efforts in the Chicago City Council to make the mayor's tax increment financing (TIF) system more transparent.  In his latest post on his Rockford Register-Star blog, Ted Biondo is taking up a similar cause in response to Rockford's off-budget TIF network:

TIFs advisory groups should be under the Open Meetings Act. TIFs should also be on-budget, so the citizens know how the successful TIF’s money is spent and where - on developments within the TIF or adjacent TIFs. Without tansparency, how do we know where any of this money is spent?

Good to see awareness of this issue spreading. If you're new to the TIF issue, be sure to read the first half of Biondo's post, in which he clearly lays out how TIF districts operate.  His earlier post on the history of TIF is also worthwhile.

Quick Hit
by Josh Kalven
Wed Aug 18, 2010

Brady Exaggerates Estate Tax's Effect On Illinois Farms

At a press conference yesterday, GOP gubernatorial challenger Bill Brady framed his proposal to repeal the Illinois estate tax as a boon for the state's agricultural economy (watch his comments here):

BRADY: Argiculture is a sustaining part of our economy.  But like the rest of businesses throughout this state, it can't fall to the whims of Gov. Quinn's higher income taxes and fees.  It struggles as well with the double taxation on gasoline and the estate tax penalty that penalizes so many people in Illinois.

Conservatives love to argue that the estate tax is squeezing the life out of small businesses and family farms in this country.  But as the following chart shows (via Wonk Room), only a tiny percentage of the estates eligible for the tax actually fall into these categories:

Learn more about Illinois' most progressive tax here.

Quick Hit
by Adam Doster
Fri Aug 13, 2010

The Fiscal "Conservatism" Of Mark Kirk

U.S. Rep. Mark Kirk won't vote for unemployment benefits or education and Medicaid funding because he says it's fiscally irresponsible. Yet the GOP U.S. Senate nominee voted for and wants to see extended the Bush-era tax cuts on Americans who earn more than $1 million annually, which will blow the deficit up by $36 billion in 2011 alone and by $700 billion over the next decade. Here's a telling Washington Post graphic comparing the tax cuts available for high-earners in both the GOP and the Obama administration's proposal, using data from the nonpartisan Joint Committee on Taxation. If Kirk gets his way, each millionaire will save over $103,000 per year!

That's money, of course, that could fund investments in education, infrastructure, and green energy. Or, for that matter, unemployment benefits.