Daily Links for April 1

April 1, 2014

QUOTE OF THE DAY

Chicago Tribune: Rahm’s proposed pension fix calls for tax hikes and benefit cuts

Mayor Rahm Emanuel is proposing to raise property taxes and cut retirement benefits for some city workers to start digging out of a massive pension debt he inherited.

But the proposal the mayor and his top aides outlined late Monday would not address huge pension shortfalls for Chicago police, firefighters and teachers. Nor would it deal with the city’s most immediate, pressing financial problem: a state requirement to pay a whopping $600 million more toward police and fire pensions next year, a provision that could lead to a combination of tax increases, service cuts and borrowing.

Even as Emanuel vowed to put his pension proposal on paper in the coming days so it can be considered by state lawmakers, the changes face an uncertain future. Although Emanuel aides say the proposal comes out of talks with more than 30 city unions, not all of them are on board. A lawsuit is all but certain, especially after one group of unions issued a statement calling Emanuel’s concept “an unconstitutional approach that makes onerous cuts to the pension benefits of nearly 50,000 active and retired public servants.”

Key Findings

State income tax systems have significant variation in structure, rates, deductions, and exemptions, including 9 states with no income tax on wages and 8 with flat income taxes.
North Carolina became a flat tax state, moving from three brackets to just one. Massachusetts, another flat tax state, reduced its rate slightly.
Kansas, North Dakota, Ohio, and Wisconsin all made across-the-board income tax rate reductions relative to 2013 rates.
Minnesota added a high-earner tax bracket of 9.85 percent on income over $152,540 for single filers.

Income taxes are a major, and often complicated, component of state revenues. Furthermore, unlike sales or excise taxes which individuals pay indirectly, income taxes are levied directly on individuals, meaning that income taxes figure especially prominently in any discussion of tax burdens and public policies.

Republican congressional candidate Bobby Schilling is running against two opponents in the November election – one an incumbent congresswoman and the other a map of electoral districts favoring Illinois Democrats.

What happened in Illinois after the decennial census in 2010 is a mirror image of most of the rest of the country, where Republican legislatures doing the map-drawing helped the GOP retain a majority in the House of Representatives despite losing the national popular vote.

With solid majorities in the state House and Senate as well as control of the governor’s mansion, the Democrats had complete control over the Illinois redistricting process in 2011. They used it to defeat Schilling and three other Illinois Republican congressmen in 2012, solidifying their vise grip on President Barack Obama’s home state.

The federal minimum wage has left three-person families below the poverty level since 1980. It’s also well shy of the peak of its buying power almost half a century ago.

Is the current $7.25 hourly minimum fair? Is now the time to raise it, and, if so, by how much?

There is no objective answer. It depends on the political slant of lawmakers or the views of economists being asked.

Illinois officials are making a final push to enroll residents in the state’s Health Insurance Marketplace.

People who don’t already have health insurance must sign up by midnight Monday or face federal tax penalties under the Affordable Care Act.

After that, only people with limited special circumstances will be able to get coverage that meets the federal law’s requirements. Those without insurance can be fined either 1 percent of their income or $95, whichever is greater, when they file 2014 federal taxes.

Republicans are the party of the rich, right? It’s a label that has stuck for decades, and you’re hearing it again as Democrats complain about GOP opposition to raising the minimum wage and extending unemployment benefits.

But in Congress, the wealthiest among us are more likely to be represented by a Democrat than a Republican. Of the 10 richest House districts, only two have Republican congressmen. Democrats claim the top six, sprinkled along the East and West coasts. Most are in overwhelmingly Democratic states like New York and California.

The richest: New York’s 12th Congressional District, which includes Manhattan’s Upper East Side, as well as parts of Queens and Brooklyn. Democrat Carolyn Maloney is in her 11th term representing the district.

A leading healthcare expert poured cold water on the administration’s recent Obamacare enthusiasm, saying that three quarters of those signed up will face higher premiums than under their previous insurance.

“Out of people that have signed up about three quarters will find premiums higher than previously with other insurance,” Dr. Toby Cosgrove, CEO of the Cleveland Clinic said on Fox News Sunday.

“Hospitals are going to be paid less for what they do,” Cosgrove continued. “And we also know insurers are paying less too. We have to become more efficient in how we deliver care which is a big change for health care providers.”

With a vote looming in the U.S. Senate, Gov. Pat Quinn and U.S. Sen. Dick Durbin, D-Ill., joined union members and workers in Chicago today to push for a hike in the minimum wage.

Today in Federal Plaza, Quinn and Durbin joined Americans United for Change, which is on an 11-state tour pushing for an increase to the federal minimum wage.

Nancy Salgado, who has two children, spoke through tears explaining how she’s struggled to make ends meet while working now at McDonald’s in Logan Square

Governor Chris Christie’s move to reduce New Jersey’s pension payment to help close a mid-year budget gap has Moody’s Investors Service concerned that the state is approaching the limit of steps to trim spending.

The second-term Republican is cutting $694 million of spending to balance the budget for the year through June. That includes $94 million from recalculating the required pension contribution as a result of revised actuarial assumptions, Baye Larsen, a Moody’s analyst in New York, said in a report last week.

While the fix will help balance budgets through fiscal 2018, pension costs will be higher in later years as a result, according to Moody’s. New Jersey securities tend to have higher yields than those of similarly rated states because of the burden, said Daniel Solender, director of munis at Lord Abbett & Co. in Jersey City.

After having former governors George Ryan and Rod Blagojevich go to jail, some results from the Paul Simon Public Policy Institute shouldn’t surprise anyone. Of 1,001 registered voters polled, 89 percent say corruption is somewhat common in the state.

Those surveyed don’t have a much higher opinion of the federal goverment, as 79 percent said corruption is common.

“These are sad numbers,” said David Yepsen, director of the institute. “No wonder so many people don’t vote and participation in civic affairs seems limited. It’s unhealthy for a society to have such little confidence in the integrity of government. It makes Illinois an unattractive place to live.”

CARTOON OF THE DAY

Print Article

Key Findings

illinoispolicy

Rideshare drivers and customers to Chicago City Council: don’t kill these jobs

State Sen. Don Harmon’s progressive tax plan would hurt middle-class Illinoisans