Excerpts from recent editorials in newspapers in Illinois
May 28, 2019
‘Let the people vote’ on pension reform too
Coming your way in November 2020: the option to change Illinois’ flat income tax to graduated rates.
Not coming your way in November 2020: a chance for tax relief and government spending reform. Not yet. And not likely unless voters demand it.
Democrats in Springfield have voted to put a referendum question on the ballot next year that, if approved by voters, would switch Illinois’ constitutionally protected flat income tax to a graduated one. Under the current proposal, rates would increase on those earning more than $250,000 a year. More important, the constitutional change would empower the legislature and future governors to change tax rates and income brackets whenever they wish. Which direction do you think those rates will head?
Supporters of the idea including the amendment’s House sponsor, Rep. Robert Martwick, D-Chicago, portray the change as a rescue operation. Hitting higher-income earners with a tax hike will fix Illinois’ problems and put the state “on a path to fiscal prosperity for this generation and for the next,” Martwick said during debate on the amendment. Gov. J.B. Pritzker made the proposal his top priority this legislative session. He’ll likely pour millions of his own dollars into a marketing campaign to convince Illinoisans to vote yes.
Funny how that amendment zoomed through the Senate, then the House, on a fast track when other proposals to term-limit politicians or fairly draw district maps have gotten buried year after year. When politicians want to reach into your pocketbook, things move at lightning speed.
But make no mistake: Switching to a graduated income tax is not going to save this state. Not even close. New revenue generated under the rates proposed — optimistically, $3.4 billion per year — doesn’t come close to paying down the massive debts Illinois lawmakers have piled up, including a $133.5 billion unfunded pension obligation that’s still rising. Worse, hitting high-income earners will have the reverse effect of driving more residents and businesses to flee Illinois. Why should they get soaked as punishment for decades of financial mismanagement in Springfield? Boca Raton, in income-tax-free Florida, beckons.
The good news is that this fight isn’t over. Lawmakers have until May 2020 to put a companion referendum on the ballot: Change the constitution’s pension clause, which the Illinois Supreme Court has interpreted so rigidly that even pensions acquired under questionable circumstances have been ruled constitutionally protected. Substitute teaching for one day helped qualify a union lobbyist for a state pension. Voters should be screaming to open up that pension clause.
The way out is real reform and it’s hiding in plain sight. The pension clause needs to be loosened. Benefits earned so far should and would be protected. But going forward, the legislature should be empowered to tweak those costly guarantees, such as 3% compounded cost-of-living-adjustments. The state of Arizona, with similar contractual language in that state’s constitution, managed to tie annual raises for pensioners to the local cost of living — closer to 1% or 2%, not compounded.
Arizonans did this with an eyes-wide-open legislature and in partnership with public employee unions. Arizona didn’t solve its pension crisis, but the state is on more solid footing.
Why should Illinois voters be denied the chance to vote on pension reform while they’re voting to raise billions of dollars in new income tax revenue? With great fanfare the governor demanded that the tax question be decided democratically. “Let the people vote,” Pritzker said.
Don’t forget that demand: “Let the people vote,” Pritzker said.
That same principle should be applied to reforming the pension clause of the constitution. Lawmakers have until May 2020 to do the right thing. They’ve put a graduated income tax on the ballot.
Tell your legislators you really do want to fix Illinois: When you vote on the income tax, you want to vote on a pension amendment too.
May 28, 2019
No Illinois lawmaker should take a dime from the video gambling industry
Voters deserve to have public policy set by legislators who aren’t getting cash from one side of the debate.
Gee, whiz, you folks in the video gambling business, could you hire us to be sales reps?
The money looks excellent, and we promise to write glowing editorials about video gambling and to fight any effort to tax it more.
Is that quid pro quo too close for comfort? Well, then, we have kids. Maybe you could hire one of our kids and hope nobody notices. And we’ll write glowing editorials about video gambling.
We’re joking, of course. But that, in a way, is exactly what’s happening right now in Springfield and at the county level. Elected officials are working for the video gambling industry — pulling in good money — and then, as legislators, participating in the big decisions about how to tax and regulate that very same industry.
Our worry meter is dialing up this week as big legislation involving the video gambling industry reaches a head in Springfield. Lawmakers are trying to slap together a last-minute package deal, Senate Bill 516, that would include legalized sports betting, more casinos and higher taxes on video gambling. The Legislature’s spring session is scheduled to end on Friday.
As a story in Tuesday’s Chicago Sun-Times by Jason Grotto of ProPublica Illinois and Dan Mihalopoulos of WBEZ Chicago spells out, financial links between lawmakers and the video gambling industry can pose the worst possible conflicts of interest, and it is for this very reason that a lot of folks opposed video gambling for years. The danger of dark influences has always been great.
With that in mind, allow us to make five points:
—State Senate Minority Leader Bill Brady, R-Bloomington, should not be working for the video gambling industry in any capacity. It’s not enough for him to say he will always act in the public interest, even as he takes a cut from video slot and poker machines. Boy Scout pledges do not reassure us.
—Senate Assistant Majority Leader Antonio Munoz’s son should not be working for the industry. Junior’s hiring by a business looking for friends in Springfield looks entirely suspect. This is a kid who left a city job — his dad is a Chicago Democrat — in which he repeatedly was suspended for failing to even show up. If the kid insists on keeping the job, maybe Dad should quit.
—No elected official — we’re looking at you, state Sen. Tom Cullerton and Cook County Commissioners Deborah Sims and Peter Silvestri — should be allowed to have a direct or indirect financial interest in video gambling. The history of gambling in this state and country is just too shady.
Gov. J.B. Pritzker is going down the right road in seeking to further tax video gambling to raise an additional $90 million to help fund a much-needed $41.5 billion capital bill. The state’s roads and bridges are crumbling, and Illinois’ tax rate on video gambling is among the lowest in the country. The industry’s lobbyists, bouncing all over Springfield, are doing their best to block the tax hike even as they seek to rake in more money for the industry by trying to increase minimum bets from $2 to $4 and increase the maximum number of gambling machines at each location from five to six. Did we mention that Illinois already has more video gambling machines outside of casinos than any other state?
Video gambling laws in Illinois favor the industry, not the people of Illinois or taxpayers. The state does not even set aside money in licensing and administrative fees to cover the costs of policing the industry, which is what the fees were intended to do.
Who’s looking out for you when elected officials, even if only a handful, are directly or indirectly on the payroll of the video gaming industry?
May 27, 2019
Moline Dispatch and Rock Island Argus
Governor, sign these good government bills
We were pleased to see last week that Illinois lawmakers had sent Gov. J.B. Pritzker a pair of good government bills that merit his signature.
The two unrelated but important bipartisan bills are:
—HB2265, which would require Illinois middle schools to create and include a much-needed unit on civics education. The class would be created by educators and funded by private donations.
—HB348, which would give township voters, via referendum, the power to dissolve township governments in McHenry County, but has the potential to be expanded to include other communities in this government-heavy state.
While the two bills do not, on their face, appear to have much in common, both present opportunities to improve Illinois government and the body politic.
Quality civic education in our schools, for example, is an essential building block of a healthy democracy and an engaged and thriving state and nation.
For us, the central question regarding whether to include civic education is this: How can our children become good citizens and choose good leaders to represent our nation if they do not know what it is that makes our nation a great one?
Countless studies and surveys show the terrible consequences when schools no longer teach children about government and good citizenship.
Those same studies also show that civic education works best when it begins -- with age-appropriate lessons, of course -- just as soon as children begin going to school. Like many researchers, we, too, believe civic education should continue throughout a student’s entire K-12 experience.
Sadly, during the last decade, most schools across the nation, including here in Illinois, trimmed these essential lessons entirely from the public school curriculum. So when Illinois created a pilot program to put civic education in high school classrooms a few years ago, we embraced it as a welcome first step.
The new middle-school bill, which we support, takes another important step by establishing a semester-long civics course for sixth-, seventh- and eighth-graders. The Robert R. McCormick Foundation has pledged $3 million to finance the cost of incorporating the course into the curriculum, thus ensuring that the new class is not another unfunded mandate that local communities cannot afford.
State Rep. Dave McSweeney’s township consolidation bill also was conceived as pilot program that could later be expanded to improve Illinois government. He argues, persuasively, that townships are a good place to begin looking at either elimination or consolidating government functions.
The Barrington Republican knows what he’s up against in trying to cut back on township governments in a state that boasts more government units than anywhere else in the nation. Townships are an especially tough nut to crack. Even talking about finding ways to cooperate to provide local government services more cheaply is guaranteed to bring angry township officials out in droves, with guns blazing, as Henry County leaders have discovered.
That makes approval of this bill all the more impressive, since it is the second time a measure like it will make its way to the governor’s desk. A similar bill was approved by lawmakers during Gov. Bruce Rauner’s tenure. But the GOP governor wouldn’t sign it because it didn’t apply to the whole state. We, too, believe that voters everywhere in Illinois should have the power to determine how they are governed. But a statewide measure faced far more difficult odds. Besides as this middle-schools civics bill shows, there is merit in making big changes incrementally.
We trust the governor, too, will see the merits and reach for his pen.
May 27, 2019
(Decatur) Herald & Review
State shouldn’t dictate diversity
Illinois has a storied history of overreaching pending legislation. The latest example is a bill that would force publicly traded companies headquartered here to have corporate boards deemed “diverse” by the state.
The House version would fine companies up to $100,000 if a board doesn’t have one African American person and one woman. The Senate would add a requirement for a person who is a Latino.
If this seems a little paint by numbers, it is. But the problem is not the goal.
Boards of directors by and large are notoriously very male, very white and often of an older age bracket -- a kind of time warp to an earlier era.
We know today that any organization is stronger if there’s diversity -- in terms of gender, age, race, religion, sexual orientation, politics and ideas -- at all levels. Yet state lawmakers shouldn’t be the ones dictating whatever their definition of “diversity” is.
The Securities and Exchange Commission since 2009 has required companies to disclose whether diversity was considered by nominating committees for directors. The 2002 Sarbanes-Oxley Act, created in the wake of Enron, mandates independent directors.
These rules allow for shareholders to push for change and diversity if they want. Customers can do the same when they buy products or services. That’s the free market.
Not only is a state-mandated quota based on gender or race seemingly in conflict with the equal protection clause of the U.S. Constitution, it’s not practical. After all, a company can be legally incorporated in one state but headquartered in another.
About 60 percent of Fortune 500 companies are incorporated in the tiny state, attracted by a pro-business tax structure, the specialized Chancery Court devoted to corporate issues and an easy system for incorporating and avoiding liabilities. Apple, Google, General Motors and Coca-Cola are all technically Delaware companies, even though the home offices are in California, Detroit and Atlanta.
Something called the “internal affairs doctrine” means they play by Delaware rules.
This became an issue last year when California passed legislation requiring a certain ratio of women on company boards. Bloomberg pointed out the measure is on shaky ground from a constitutional standpoint. “It’s not clear whether another state can, legally, tell them what to do,” the story said.
The lawmakers should focus on practical ways of making our state a better place to do business. Companies can just go somewhere else to see what that’s like.