“Jack, the Jobs Killer”

Capitol Fax Blog was not the only blogger to notice State Rep. Jack Franks’ massive tax increase bill.

His 2014 opponent, Steve Reick, did, too, on his blog Illinoyances.

Jack Franks

Jack Franks

Here’s part of his post, which you can find here:

Jack’s doing the same thing every politician does when it comes to increasing taxes.

He’s saying that by closing tax “loopholes”, he’s not raising taxes.

Here’s a hint: If you have to write a bigger check to the government while doing nothing different, it’s a tax increase…

Jack has spent his entire political career telling us that he’s never voted for a tax increase.

With this bill, what he’s proposed is merely a tax increase in sheep’s clothing.

He’s counting on you to not know the difference, or to not care.

Now that he’s into his 9th term and seeking his 10th (and the fully vested pension that goes with it), he probably has good reason to think that way.


Comments

“Jack, the Jobs Killer” — 26 Comments

  1. He is also suggesting to put a freeze on property taxes for seniors who have lived in their houses 30 years and to use the last sale price for the most a house can be taxed. McHenry County is in trouble because of high property taxes. Lowering the income tax has only caused problems and not solved the property tax problem.

  2. Yes Karma, You Democrats have really screwed things up. Again.

  3. Steve got this right.

    Anything that increases revenue to government is a de facto tax increase, and a bad idea.

    The problem is the level of spending, not insufficient revenue.

    I myself will be taking my tax deferred income/assets to Florida where no one in Illinois can touch it.

  4. Property taxes will never come down until we fix the way education is funded in this state.

    I’m writing a series of posts on my blog explaining the current system of education funding, and will be discussing how it can and should be fixed.

    Reliance on the property tax as a means of funding K-12 education is just another way for the state to skirt its responsibility:

    “The State has the primary responsibility for financing the system of public education.”

    Constitution of Illinois, Article X, Section 1

  5. I believe that was litigated and the language was found to be advisory only.

  6. The state as a major funding source for education is a means to be a mechanism to pull money out of the 11 county suburban area and send it to prop up Chicago Democrats.

  7. @Charles Nelson: You’re absolutely right, and it’s already being done.

    So long as the money is sent to the schools instead of being attached to the kid, it’ll continue being done.

    Here’s what I’ve written on the matter:

    https://illinoyances.wordpress.com/2015/08/31/education-funding-a-crumbling-foundation/

    https://illinoyances.wordpress.com/2015/09/01/education-funding-part-ii-the-big-sucking-sound-from-the-shores-of-lake-michigan/

    https://illinoyances.wordpress.com/2015/09/08/education-part-iii-ptell-giveth-and-ptell-taketh-away/

    https://illinoyances.wordpress.com/2015/09/11/education-part-iv-poverty-grant-and-ptell-subsidy-why-do-they-matter/
    Parts V-? will discuss property taxes and alternatives to current methods of spending.

    But as long as the state can pawn off the bulk of education spending and unfunded mandates onto the property tax payers, it’s never going to get better.

  8. @cal: Then it’s high time it stopped being advisory and became what every other Constitutional provision is meant to be: The Law.

    That’s not going to happen with the current crop of characters running the show in Springfield.

  9. Well just to add to the never ending list of how to save money in public education.

    1. Pensions.

    Too much taxpayer money goes to people not working which does nothing to educate a child.

    2. Mandatory Fees from Employees to Labor Unions as a Condition of Employment.

    When a labor union is present, the employee is forced as a condition of employment to pay fees to that union, and the union in turn has LOTS of money, which has created a very large special interest organization which has no effective counter (the Illinois Policy Institute & Better Government Association are not dedicated to public education only, the PTA is more in agreement with than a counter to the union, the Illinois Association of School Boards and Principals Association and School Business Officials Association aka the Alliance is not much of a counter).

    3. Hit the Where it Hurts Most.

    The next problem is if the primary source of education funding is changed from local property taxes to state income taxes, most the collar county taxpayers would see their educational services cut, and be told the only way to make up the difference, is to hike property taxes.

    4. Money Flows to School District Monopoly Irregardless of Anything.

    The next problem is the school districts have a monopoly on the taxpayer dollars allocated to the district, the district receives the money irregardless if a given child attends the public schools or a private school, irregardless of how satisfied the customer is with the service.

    Through Federal and state aid, the property tax poor school districts already see considerable funding.

    There already exists a lot of money for public education; arguably enough; no one even adds up all the different sources; for instance the state contribution to the TRS pension fund is left out of public education expenditures.

    5. Capital Projects and Bonds.

    Another main problem with education funding is capital projects such as new schools.

    The entire way that construction occurs and bonds issued often is rife with excess profits, for instance, this frequently occurs when the negotiated bond process is chosen of the competitive bid process during bond issuance.

    6. Those That Know Don’t Tell

    The Superintendents could spend a month of Sundays explaining how to save costs in public education if they were put on the trial stand and told tell us all the ways save money starting with the biggest savings, and if we find out you tell even one lie or half truth or omit pertinent information you are going to jail (obviously that’s not going to happen).

  10. Reforming hiked pensions should be the priority if more money is desired for public education.

    It should be the priority of Jack Franks wants to lower property taxes.

    Ironically, Illinois State Representative Jack Franks voted for plenty of legislative pension benefit hikes to underfunded pensions.

    The biggest single financial problem in this state is underfunded teacher and administrator pensions.
    The multi billion dollar state contribution to the teacher and administration plan is not even counted as education funding in per pupil spending.

    Here is the state contribution to the TRS pension fund over the last 45 years:

    1970 – $0,057,783,000
    1971 – $0,060,117,000
    1972 – $0,058,575,375
    1973 – $0,091,979,900
    1974 – $0,100,018,071
    1975 – $0,130,723,094
    1976 – $0,138,551,600
    1977 – $0,156,976,400
    1978 – $0,175,069,000
    1979 – $0,188,641,596
    1980 – $0,212,697,717
    1981 – $0,231,871,230
    1982 – $0,154,969,147
    1983 – $0,144,437,110
    1984 – $0,188,905,000
    1985 – $0,214,356,000
    1986 – $0,237,981,000
    1987 – $0,257,304,000
    1988 – $0,216,849,000
    1989 – $0,232,438,000
    1990 – $0,263,507,000
    1991 – $0,262,504,000
    1992 – $0,238,175,000
    1993 – $0,269,896,000
    1994 – $0,266,077,000
    1995 – $0,267,146,000
    1996 – $0,330,073,976
    1997 – $0,385,129,987
    1998 – $0,466,948,418
    1999 – $0,572,950,673
    2000 – $0,639,298,949
    2001 – $0,724,007,792
    2002 – $0,814,739,766
    2003 – $0,929,709,762
    2004 – $5,361,851,773
    2005 – $0,906,749,310
    2006 – $0,534,305,256
    2007 – $0,737,670,628
    2008 – $1,041,114,825
    2009 – $1,451,591,716
    2010 – $2,080,729,055
    2011 – $2,170,918,489
    2012 – $2,406,364,156
    2013 – $2,703,312,213
    2014 – $3,438,382,892

    +++++++++++++++++++

    Some or all of the $5.3 Billion in 2004 was borrowed when the General Assembly and Governor Rod Blagojevich issued pension obligation bonds with Public Act 93-0002 (PA 93-0002), which was House Bill 2660 (HB 2660), signed on April 7, 2003.

    House Sponsors:
    Rep. Michael J. Madigan – Gary Hannig – Kenneth Dunkin.

    Senate Sponsors:
    Emil Jones, Jr. – Donne E. Trotter – Patrick Welch – Don Harmon and Mattie Hunter.

    ++++++++++++++++++++++++++++++++++++++

    Quinn issued pension obligation bonds also, in two different years.

    Public Act 96-0043 (PA 96-0043), Senate Bill 1292 (SB 1292), signed July 15, 2009 by Governor Pat Quinn.

    Senate Sponsors:
    Donne E. Trotter – Jacqueline Y. Collins – Kwame Raoul – Mattie Hunter

    House Sponsor:
    Kevin A. McCarthy

    TRS received $2,089,268,000.
    +++++++++++++++++++++++++++++++++++++

    Public Act 96-1497 (PA 96-1497), Senate Bill 3514 (SB 3514), signed January 14, 2011 by Governor Pat Quinn.

    Senate Sponsors:
    John J. Cullerton – Donne E. Trotter

    House Sponsors:
    Barbara Flynn Currie – Kennneth Dunkin

    Public Act 96-1497 mandated the issuance of new pension bonds totaling $4.096 billion, resulting in $3.7 billion after expenses, distributed among the 5 state pension systems (TRS, SERS, SURS, GARS, JRS).

    Of that, $2,000,918,489 was appropriated to TRS for FY 2011.

    http://www.auditor.illinois.gov/audit-reports/compliance-agency-list/retirement-systems/trs/fy12-trs-comp-full.pdf

    +++++++++++++++++++++++++++++++++++

    The result….the TRS pension fund is around 40 percent funded, meaning it’s about 60% underfunded.

    TRS is a train wreck.

    Borrowing money is not a fiscally prudent way for the state to contribute money to a public sector pension fund, even if the scheme worked.

    For all those who want to blame the state for not making its full annual contribution to the pension fund, explain part of the reason the state was not able to make its full annual contribution is because some of the money was diverted to salary hikes, which hikes the pension, which was already underfunded.

    Another reason was legislative pension benefit hikes, which hikes the pension, even as the pension fund was already underfunded.

    And we can go on and on.

  11. 2014

    Unfunded pension liabilities for IL public retirement system $104.6 Billion

    State universities retirement system 46.5% funded

    Teacher Retirement system 44.2% funded

    State employee retirement system 36.9% funded

    The public pension funds use overly optimistic return assumptions between 7.5% and 8.25%.

    The assumed rates are nowhere near the risk free rates.

    So either,

    A. Fund managers take greater risks to hit the targets or

    B. The targets wont be hit

    This is the reason moody’s downgraded Chicago to junk status.

    State government has approximately $37 Billion in debtand has the lowest credit rating and worst funded pension system among the 50 states.

    The average homeowner pays 6 layers of government in IL, some as high as 18. There are almost 8500 local government units with 6026 empowered to raise taxes, the highest in the U.S.

    Thanks to the 1870 constitution, which was in effect until 1970, it limited what counties and cities could borrow.

    However when the need for more money arose the government created new government authorities.

    For example, that is why there are 800 drainage districts most of which levy taxes.

  12. Steve: Just what do the taxpayers gain insofar as seeing reduced spending by School Boards by funding schools with taxes derived via property tax versus funding from taxes collected by the state?

    I propose that the problem is not where the money comes from, the problem is we spend too much!

    Legislators and those who want to be Legislators need to pay attention to what Mark has written.

    Illinois cannot ‘turnaround’ without a change to our
    Constitutional mandated pension system, elimination of Prevailing wage laws; changes to State torte law, Workman’s comp revisions and the end of ‘collective’ bargaining in the public sector without the use of mandatory arbitration.

    Why are we paying Teachers to recruit people for Obamacare?

  13. Here is the General State Aid (GSA) Appropriation for recent years.

    FY 2008 – $4,454,500,000
    FY 2009 – $4,581,561,600
    FY 2010 – $4,600,305,100
    FY 2011 – $4,600,305,100
    FY 2012 – $4,448,104,514
    FY 2013 – $4,286,752,500
    FY 2014 – $4,442,198,260
    FY 2015 – $4,425,273,600
    FY 2016 – $4,632,188,200

    GSA is funding from the State of Illinois to the local school districts.

    Notice how GSA state funding for education is not growing much.

    Notice how the state TRS teacher and administrator pension funding is growing rapidly.

    Both should be counted as education funding, but the state and most people don’t count the pension contribution as education funding, because many don’t want taxpayers to know the true cost of public education in Illinois because then when Illinois is compared to other states, Illinois would rank higher in terms of spending more money, and many want more money for public education for more salary and benefit hikes and pet projects.

    They are not being honest with the taxpayers.

    Now if you add both GSA & Pension Contribution you will find we in fact are spending more on public education over the years, a lot more, but the money is going to pensions, not educating children, and that’s due to all the pension games that have been played for the last 45 years in terms of legislative benefit hikes and salary hikes and diverting pension funding to hikes salaries (which hikes pensions) and the whole time pensions were already underfunded.

    That taxpayers have been duped by politicians and special interest groups.

  14. Here is the GSA Appropriation + Pension Contribution for recent years.

    FY 2008 – $5,495,614,825
    FY 2009 – $6,033,153,316
    FY 2010 – $6,681,034,155
    FY 2011 – $6,771,223,589
    FY 2012 – $6,854,468,670
    FY 2013 – $6,990,064,713
    FY 2014 – $7,880,581,152

    So as you can see when GSA + Pensions is combined state public education funding has steadily increased in Illinois.

    It’s just that the state pension contribution, which is made “on behalf” of the school districts, is not included in state education funding when the figures are reported.

    +++++++++++++

    And here is the link to the GSA appropriation (funding from state to school districts) from the previous post.

    http://www.isbe.net/funding/pdf/gsa-historical.pdf

  15. By the way to state the obvious to many but not some casual observers, the above is just state funding fo for public education (pre kindergarten – 12th grade) and does not include local funding (largely derived from property taxes) and Federal funding.

    And there are other buckets of money that flow from the state to school districts in addition to General State Aid, but GSA is the largest.

    The state government, school districts, politicians, the press, unions, etc. can portray a more accurate picture to the public about the amount of money being spent on public education, but choose not to do so.

    Hide and seek, catch me if you can.

  16. One of the points Reich makes, and Senate Republicans have made, is that Chicago benefits at the expense of the rest of the state, from the current public education funding formula.

    +++++++++++++

    That neutralizes to some degree Chicago residents having their state income tax dollars used to fund the TRS teacher and administrator pension fund, as Chicago has a separate pension fund for teachers and administrators, and the state either doesn’t make a contribution or makes a much smaller contribution to the Chicago Teachers Pension Fund (CTPF) compared to TRS.

    There are now talks including the current Governor of the state making an annual contribution to the CTPF.

    Once again, not addressing the more important problem that the hiked pensions are not affordable to taxpayers.

  17. Simple solution immediately available:

    Abolish tif’s. California did it.

    New taxpayer school funding formula sans tif take is simulative to economy and would redistribute state funding (because local Chicago school funding will cease to be diverted to developers via local politicians via tif mechanism).

  18. @mark @numbers guy: You’ve both hit the nail on the head, Illinois spends a lot more on education, primarily on pensions and administration.

    Consider this comparison among Illinois, Florida and Indiana:

    Florida: State/local split for funding: 38% state/50% local (FL doesn’t have an income tax); 2013 average cost per student: $8,400 (of which $5,100 was for instruction); Education policy grade from Report Card on American Education: B

    Indiana: State/local split for funding: 63% state/29% local; 2013 average cost per student: $9,600 (of which $5,500 was for instruction); Education policy grade from Report Card on American Education: B+

    Illinois: State/local split for funding: 35% state/57% local; 2013 average cost per student: $12,100 (of which $7,300 was for instruction); Education policy grade from Report Card on American Education: C

    The only silver lining for Illinois is that once the system completely collapses, which it will if we continue down the path we’re on, we’ll have the opportunity to pick up the pieces and do things the right way.

    We can start with the following:

    1. Reform the public pension system, up to and including amending the Constitution to remove the guarantee language;

    2. Give local school boards the ability to negotiate salaries and pensions with their teachers and administrators without the shackles of state law;

    3. Eliminate the funding of school systems and enact “backpack funding”, putting families in charge of their kids’ education. There are some very exciting things going on in Arizona and Nevada (http://www.edchoice.org/school-choice/programs/nevada-education-savings-accounts/) that Illinois should consider;

    None of these will get done without getting rid of the deadwood in Springfield, up to and including Jack Franks.
    (If you want to drill down into the education policy grades given to Florida, Indiana and Illinois and see how they compare, go to: https://illinoyances.wordpress.com/2015/07/30/how-should-illinois-pay-for-education/

  19. I’m not aware of any McHenry County drainage districts that levy taxes.

  20. @mark: And don’t forget this little tidbit: While the rest of the state’s homes are assessed at 1/3 of their value for property tax purposes, in Cook County, they’re assessed at 10%.

    The reason given is that with all the commercial and industrial properties in the county, the burden can be shifted from residential to commercial properties.

    Until Cook County residential property is assessed at a level more in line with the rest of the state, there’s no rational justification for sending money from McHenry County to the Chicago Public School system.

  21. There’s no suggestion to send additional money to any school district in Illinois until pensions are reformed, until collective bargaining is reformed, until retiree healthcare is reformed, until the issuance of bonds is reformed, until the state and school districts are more transparent, and other reforms are enacted.

    And if it’s even possible for a United States governmental body to be more messed up than the state of Illinois, it’s Chicago Public Schools.

    ++++++++++++

    There are only 2 drainage districts in McHenry County, as follows.

    +++++++

    Greenwood Drainage District 1.

    Per the Illinois Comptroller Data Warehouse in 2015 it received an appropriation of $6,778 (from the state?) and the contact is the McHenry County Treasurer, Glenda Miller.

    +++++++++++++++

    Hebron Drainage District.

    In 2013 it received an appropriation of $17,449.

    The CEO / Commissioner / Purchasing Agent contact is Mel Von Bergen & the CFO contact is Glenda Miller.

    +++++++++++++++++

    Although there are a lot of drainage districts statewide, at least in the collar counties, they don’t spend much money, no pensions, so doesn’t seem to be a priority.

    Illinois is not failing because of drainage district finances or expenditures.

    ++++++++++++++++++++++++++++++++++++++++

  22. Lennie Jarratt at the Heartland Institute is working on education reform.

    There are plenty of others working on education reform but he is one of the more cost conscious ones and very aware of the pension problem.

    He’s from Lake County so he’s aware of high property taxes for public education.

  23. For non-political people who would like to understand how tif districts divert billion$ of taxpayer dollar$ to developers via politicians without any meaningful oversight or regulation, there is a free seminar coming in Woodstock Library October 20th.

    Click on link ad at left column of this blog to reserve seats.

  24. @cal: That’s true.

    However, I pulled the tax bills for 2 properties of similar value, one in Chicago (FMV: $261,740)and one in McHenry (FMV: $255,360), both of which are owned by friends of mine.

    After applying the state multiplier to the assessed valuation and deducting the homestead exemption, the Chicago property had a net taxable value which was $15,000 LESS than the McHenry property, which had a lower fair market value.

    Multiplying the taxable value by the respective rates (6.808% in Chicago, 10.790112% in McHenry) resulted in a tax bill in Chicago of $4,380 and $8,536 in McHenry.

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