Delusional Illinois Democratic gubernatorial candidates promising the moon to citizens

The state of Illinois is in the worst financial mess of any state in the union. The state owes billions in unpaid bills to vendors - most of them small businesses. The pension system is underfunded and is a ticking time bomb getting ready to explode. The state income tax is among the highest in the nation, the recently "reformed" school funding formula heavily favors the Chicago public schools while shortchanging suburban and rural schools, and the state legislature proceeds as if nothing was wrong.

Democrats refused to enact any of Republican Governor Bruce Rauner's reforms, which included pension reform, tax cuts for the middle class, and property tax reform. Rauner, looking to change the "pay to play" culture in Springfield, stood firm for his reforms. But Democrats refused to vote a state budget for two years. In the end, Democrats got their way and passed a budget with a hefty increase in taxes.

In short, the state is broke. But you'd never know it by listening to the front runners for the Democratic nomination for governor.

To a candidate, they are pushing spending schemes that are not only unrealistic, they are delusional considering the state's financial condition. Universally, they would pay for the massive increase in spending by "taxing the rich." If only. With 10,000 residents leaving the state every month, and businesses fleeing the state for friendlier climes, it's an open question whether anyone rich enough to pay the tax increase will be left.

A recent debate among the candidates highlighted this disconnect from reality.

Chicago Tribune:

All of the candidates except Marshall favor replacing the state’s current 4.95 percent personal income-tax rate, which Democratic and Republican lawmakers raised last summer, with a graduated tax that would place a higher levy on higher incomes akin to the federal system. The change, which would require a voter-approved constitutional amendment, couldn’t be considered for at least two years.

Pritzker, Biss and Kennedy declined to specify the highest tax rate they would support on those making the most money, but Pritzker and Kennedy each said Illinois should adopt changes to the state’s tax code to grant additional tax credits to help the middle class until a graduated tax could be considered.

Among the top candidates, Biss is the only supporter of a financial transaction tax, known as the “LaSalle Street tax,” on individual transactions in Chicago’s financial and commodity exchanges. Such a tax, he said, could generate up to $8 billion.

But the transactions tax, long supported by the Chicago Teachers Union, is viewed as unlikely in an era of digitized trading in which exchanges could leave Chicago. The comment prompted a rebuke from Kennedy, who suggested Biss was trying to “promise something we can’t deliver.”

The major contenders also voiced wariness over state incentives and tax breaks to lure such companies as Amazon in its search for a second headquarters, though they didn’t offer specifics.

“It has become a race to the bottom, unfortunately, around the nation where municipalities and states are offering huge tax benefits to bring companies to their state,” Pritzker said. “Talent is what companies are looking for. We’ve got to invest in that.”

Biss said the incentive issue is central to “what kind of economy we’re trying to build” and that “large corporations that are famous enough to get a headline in the newspaper, that are big enough to hire the right lobbyists in Springfield, put their hands out. They get what they want.”

Said Kennedy: “I think bringing companies, buying them into the states is a terrible economic development philosophy.”

Chris Kennedy is the son of Robert Kennedy and is considered a long shot. This isn't Massachusetts and Illinois Democrats are not Kennedy worshippers.

But Kennedy is right. Granting individual corporations massive tax breaks to lure them to the state is a terrible idea. Why not cut business taxes and create an investment friendly business environment. You might not get the Amazon headquarters. But you might get 100 smaller entities that will create far more jobs.

But Democrats won't cut business taxes and it's doubtful they could cut taxes for the middle class or raise them on the rich. Most Illinois residents know that state government hasn't even tried to cut the budget, or reform the pension system that will cost taxpayers billions in the coming years. There won't  be an attempt to get a constitutional amendment changing the tax rate on the ballot - certainly not in 2018 or 2020, and it's extremely doubtful such an effort would succeed anyway.

You would think that reality, along with the state's financial woes, would restrain Democrats from making wild promises about health care, education, and infrastructure. Wrong. They are proceeding as if the state's coffers were full and penny pinching Rauner won't spend money because he's an evil white rich guy.

Rauner has his own political problems with a challenge from the right. State senator Jean Ives may not be a household name in the state - yet. But she is cashing in on Republican disillusionment with Rauner and anger that he gave in to Democrats on the budget. Put simply, Rauner has not delivered and many GOP voters in the state want to make him pay.

Rauner has, at least, a good chance of leaving office without going to jail - something that 4 of the last 7 Illinois governors failed to do. But the Democrats controlling the legislature know they have the upper hand and even if the governor is re-elected, it's likely that his second term wouldn't be any different from the first.

 

The state of Illinois is in the worst financial mess of any state in the union. The state owes billions in unpaid bills to vendors - most of them small businesses. The pension system is underfunded and is a ticking time bomb getting ready to explode. The state income tax is among the highest in the nation, the recently "reformed" school funding formula heavily favors the Chicago public schools while shortchanging suburban and rural schools, and the state legislature proceeds as if nothing was wrong.

Democrats refused to enact any of Republican Governor Bruce Rauner's reforms, which included pension reform, tax cuts for the middle class, and property tax reform. Rauner, looking to change the "pay to play" culture in Springfield, stood firm for his reforms. But Democrats refused to vote a state budget for two years. In the end, Democrats got their way and passed a budget with a hefty increase in taxes.

In short, the state is broke. But you'd never know it by listening to the front runners for the Democratic nomination for governor.

To a candidate, they are pushing spending schemes that are not only unrealistic, they are delusional considering the state's financial condition. Universally, they would pay for the massive increase in spending by "taxing the rich." If only. With 10,000 residents leaving the state every month, and businesses fleeing the state for friendlier climes, it's an open question whether anyone rich enough to pay the tax increase will be left.

A recent debate among the candidates highlighted this disconnect from reality.

Chicago Tribune:

All of the candidates except Marshall favor replacing the state’s current 4.95 percent personal income-tax rate, which Democratic and Republican lawmakers raised last summer, with a graduated tax that would place a higher levy on higher incomes akin to the federal system. The change, which would require a voter-approved constitutional amendment, couldn’t be considered for at least two years.

Pritzker, Biss and Kennedy declined to specify the highest tax rate they would support on those making the most money, but Pritzker and Kennedy each said Illinois should adopt changes to the state’s tax code to grant additional tax credits to help the middle class until a graduated tax could be considered.

Among the top candidates, Biss is the only supporter of a financial transaction tax, known as the “LaSalle Street tax,” on individual transactions in Chicago’s financial and commodity exchanges. Such a tax, he said, could generate up to $8 billion.

But the transactions tax, long supported by the Chicago Teachers Union, is viewed as unlikely in an era of digitized trading in which exchanges could leave Chicago. The comment prompted a rebuke from Kennedy, who suggested Biss was trying to “promise something we can’t deliver.”

The major contenders also voiced wariness over state incentives and tax breaks to lure such companies as Amazon in its search for a second headquarters, though they didn’t offer specifics.

“It has become a race to the bottom, unfortunately, around the nation where municipalities and states are offering huge tax benefits to bring companies to their state,” Pritzker said. “Talent is what companies are looking for. We’ve got to invest in that.”

Biss said the incentive issue is central to “what kind of economy we’re trying to build” and that “large corporations that are famous enough to get a headline in the newspaper, that are big enough to hire the right lobbyists in Springfield, put their hands out. They get what they want.”

Said Kennedy: “I think bringing companies, buying them into the states is a terrible economic development philosophy.”

Chris Kennedy is the son of Robert Kennedy and is considered a long shot. This isn't Massachusetts and Illinois Democrats are not Kennedy worshippers.

But Kennedy is right. Granting individual corporations massive tax breaks to lure them to the state is a terrible idea. Why not cut business taxes and create an investment friendly business environment. You might not get the Amazon headquarters. But you might get 100 smaller entities that will create far more jobs.

But Democrats won't cut business taxes and it's doubtful they could cut taxes for the middle class or raise them on the rich. Most Illinois residents know that state government hasn't even tried to cut the budget, or reform the pension system that will cost taxpayers billions in the coming years. There won't  be an attempt to get a constitutional amendment changing the tax rate on the ballot - certainly not in 2018 or 2020, and it's extremely doubtful such an effort would succeed anyway.

You would think that reality, along with the state's financial woes, would restrain Democrats from making wild promises about health care, education, and infrastructure. Wrong. They are proceeding as if the state's coffers were full and penny pinching Rauner won't spend money because he's an evil white rich guy.

Rauner has his own political problems with a challenge from the right. State senator Jean Ives may not be a household name in the state - yet. But she is cashing in on Republican disillusionment with Rauner and anger that he gave in to Democrats on the budget. Put simply, Rauner has not delivered and many GOP voters in the state want to make him pay.

Rauner has, at least, a good chance of leaving office without going to jail - something that 4 of the last 7 Illinois governors failed to do. But the Democrats controlling the legislature know they have the upper hand and even if the governor is re-elected, it's likely that his second term wouldn't be any different from the first.