To Pass Tax Hikes, Pork Bill Increased Over $3 Billion after Unveiling

From WirePoints, reprinted with permission:

Illinois’ Reckless $45 Billion Capital Spending Binge

June 3, 20198

“Here’s one conclusion — the Illinois Legislature either has no real grasp of the financial situation in this state or simply doesn’t care. It is our suspicion that too many legislators simply don’t understand the financial reality the state and city face.”

–  “Champaign News Gazette Editorial, June 2, 2019

By: Mark Glennon*

When Governor Pritzker announced a $41.5 billion capital spending plan a couple weeks ago we thought it was surely just a pie-in-the-sky first offer – that economic realities and unpopular tax hikes needed to fund so massive a plan would chop it down to something reasonable.

Silly us.

The plan has now increased to $45 billion.

To get a sense of the enormity of that number, consider that it’s over twice the state’s combined annual revenue from personal and corporate income taxes.

It dwarfs all previous capital spending programs.

The Illinois Jobs Now capital plan under Governor Pat Quinn was for $18.0 billion in new projects and $11 billion of reappropriations from previous years. Governor George Ryan’s Illinois FIRST was for $12 billion.

The Build Illinois program under Governor Jim Thompson was $2.3 billion.

We understand the case for a capital program of some kind, but this is madness.

A spending binge so massive, prepared by proven incompetents and dumped on the General Assembly along with thousands of pages of other budget and spending matters inevitably will be loaded with pork and waste.

Even on sensible projects, spending will be excessive thanks to the absurd “prevailing wage” rules that govern all of it.

They drive costs far beyond what the private sector pays, which we’ve documented often.

The average, total, full-time-equivalent compensation under our prevailing wage laws, including benefits, for all job categories over all counties is $119,000. Public unions effectively set those numbers.

Their power is unchallenged in Springfield, which largely accounts for this capital bill.

How will Illinois pay for this?

That’s not entirely clear since nobody has had a chance to fully digest the legislation and disclosures so far have been horrible – cherry-picked numbers given to reporters.

The only good news is that the federal government apparently will reimburse Illinois for about $10 billion of the $45 billion (though Illinoisans pay part of that, too).

According to a Chicago Sun-Times summary, Illinoisans will see the

  • state’s tax on gasoline doubled;
  • higher vehicle registration fees;
  • an increase in video gaming terminal taxes;
  • charges on  sports wagering revenue;
  • license fees from casino and sports betting;
  • a tax on parking garages and lots; 
  • removal of the sales tax exemption on traded-in property valued above $10,000; and
  • an increase on the cigarette tax by $1 per pack.

Cook County municipalities would be allowed to add a 3-cent tax on top of the state-issued motor fuel tax.

However, the latest version of the bill apparently eliminated a real-estate transfer tax increase, a $1-a-ride fee for ride-sharing services and a tax on cable and streaming video services, which were in the initial proposal.

Much of it will also come out of the state’s general fund, putting more pressure the already desperate situation there.

And, no, that won’t be fixed by a new progressive income tax. Revenue from that has already been spoken for elsewhere several times over.

One way or another, though the tax increases may not yet be clear, the bill will have to be paid.

Where will the money be spent? 

According to a Capitol Illinois News summary, the plan would allocate

  • $33.2 billion for transportation projects including roads and bridges,
  • $3.5 billion for education infrastructure projects,
  • $4.3 billion for state facilities,
  • $1.2 billion for environmental conservation projects, and
  • $420 million for broadband expansion and
  • $465 million for health care and human services facilities.

We will have much more to say on this, the budget and the rest of this legislative session as facts become available.

It will take time for much of what was done to be exposed.

*Mark Glennon is founder of Wirepoints.


Comments

To Pass Tax Hikes, Pork Bill Increased Over $3 Billion after Unveiling — 6 Comments

  1. A gallon of regular gasoline is $2.39 over the border in Missouri.

    And they do have nice paved roads.

    Cheapest in Cook county is $2.98 currently, so add in another 19 cents, plus various local increases.

  2. A moving truck please for another compassionate conservative loser? Stay tuned…tic, tock, tic, tock, tic, tock, meeeeoooooooooowwwwwwwwwwww…

  3. Lowest Gas prices yesterday:
    Algonquin $2.99
    Crystal Lake $2.75
    Johnsburg $2.96
    Huntley $3.13
    Woodstock $3.01
    Harvard $2.99
    Richmond $2.92

    At the end of the month, these prices will increase a MINIMUM of 20 cents.

    In Wisconsin, most areas, you could find gas at $2.73 yesterday.

    While you are in WI getting your gas, you can also shop for your groceries (lower taxes).

    After July 1 of this year, Illinoisans who go to a neighbor state to purchase gas are removing from State revenue at least 42 cents for every gallon purchased.

    Remember when you buy gas in Illinois, some of the tax goes to fund McCormick Place and the RTA.

    Thank you Reick and DeWitte.

  4. How about the silly pricing scheme used by most all gas stations for decades.

    Instead of a simple price of $2.99, they price at $2.989 or instead of $2.65 they price at $2.649.

    The $0.001 difference is insignificant to we buyers of their product.

  5. Yup, I’ll drive to WI to save $4.00 on a fill up.

    And that .001 is costing me $0.02 per fill up.

  6. It appears Illinois called it’s own Suicide Prevention Hotline and got put on hold.

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