There’s good reason for this. The state income tax is flat (i.e., regressive) and one of the lowest in the country, at only three percent… and has been kept that way for years, placing political advantage over good sense, as the state has run a chronic structural deficit.
The current economic meltdown has exacerbated that situation to the point where it’s no longer possible to ignore or “fix” with accounting shell games. The state was facing an $11.5 billion deficit for FY 2010 alone. That’s nearly as large as California’s, and nearly twice as bad when measured per capita. Thus, Gov. Pat Quinn (the successor to our illustrious indicted Gov. Blagojevich), who as I have written before is a reformer and basically decent guy who therefore could never have made it to the governor’s office through conventional means, has proposed a painful but fair and prudent solution: some budget cuts (about $1.3 billion, including some layoffs and furloughs), accompanied by a modest tax increase—bumping the corporate rate from 4.8 to 7.2 percent, and the personal rate from 3.0 to 4.5 percent (with the automatic exemption increased from $2000 to $6000 per person).
Now, you might think that with a Democratic governor, a Democratic state senate, a Democratic state assembly, an obvious emergency on their collective hands, and broad public support, it wouldn’t be too hard to get this passed, right? But this is Illinois.
The only real alternative is massive, draconian budget cuts that would throw tens out thousands out of work, and slash or eliminate all kinds of vital state services, like health care, child care and more. The loss of funding would have huge ripple effects: I personally know people at a local disability-oriented nonprofit that relies on state funding for about a third of its revenue, for instance, and stands to lose all of that money (and have to eliminate jobs and services itself) unless there’s a budget solution. Long story short, far from the state providing any stimulus in the midst of a recession, it would instead tank the economy even further and faster.
The public understands this choice. That’s why they filled the state house to overflowing, to the point where the doors had to be closed to new entrants. All on behalf of one message: avoid draconian budget cuts, and raise our taxes instead!
The politicians, on the other hand?…
Well, an increase did get through the Senate, but no one seems able to get anything done in the lower chamber. It’s a standoff.
What’s going on? Well, let’s take a mile-high look at how things work in this state. You have to understand that Illinois has one of the most unregulated campaign finance systems in the country, so politics here is even more rife with cronyism and nepotism than most other states. Pat Quinn has never been much for playing those games, though, so he has few political chips to cash in. Thus, there’s lots of speculation about who’s going to run against Quinn in next year’s gubernatorial race, and nobody’s anxious to go out on a limb to help him look effective.
There’s been lots of buck-passing, natter about how the Dems in Springfield can’t get a budget passed without Republican cooperation, but that’s largely disingenuous. House speaker Mike Madigan is a veteran of hardball politics who knows how to twist arms to get things done… and if he really wanted this budget passed, it would be. But the thing is, one of the people considering running against Quinn next year is the state Attorney General, Lisa Madigan… the speaker’s daughter.
Lisa’s actually one of the decent ones herself—if she hasn’t been as proactive and progressive an AG as I’d hoped when I campaigned for her eight years ago, she’s at least been competent and honest in the job. It would be a shame to see her go head-to-head with Quinn, forcing a good public servant to go to waste either way; and the smart money is betting she’ll probably decide instead to take a shot at Senator Roland Burris (the appointed successor to Barack Obama), who as it turns out was way more entangled with Blago than he admitted before being sworn in. But she hasn’t made any official announcement, and wont for several weeks yet. When she does, lots of other dominoes will start falling, as other local pols decide with offices to run for. But until then, her dad’s not going out on any limbs to help a potential opponent look good… never mind the potentially devastating effects on the state.
(And to spread the blame around fairly: the Republican minority, and a fair number of recalcitrant Dems as well, could do an end run around Madigan’s influence simply by announcing support for what has to be done, rather than demagoguing about a “50% tax increase.” I wouldn’t hold my breath, though.)
Quinn has shown a willingness to compromise on the details, but he’s not hiding what the effects will be if there’s no increase at all. Yet the legislature adjourned yesterday for an early weekend without having voted on a budget. They’ll reconvene on Monday, though. There’s plenty of time to work things out, right? After all, the new fiscal year doesn’t start until Wednesday.
Meanwhile, just to underscore how screwed up things are around here, we see completely the opposite dynamic at the Cook County level. Cook County government is huge, larger than most state governments. And it’s larded with waste—sweetheart contracts, cost overruns, and mysterious jobs with outdated descriptions behind their budget lines. One of the few reformers on the County Board, Mike Quigley, was just promoted to Congress by the voters to take the place of Rahm Emanuel (which is a definite improvement). But the Board president… well, that’s Todd Stroger, another politician who owes his career to family ties. His father John, the previous Board president, won the Democratic primary in the last election despite having had a debilitating stroke… and then, before the general election, the party conveniently slotted Todd into his father’s place on the ballot.
Todd is not particularly competent, nor particularly popular… and he’s grown less so since forcing through a sales tax increase for Cook County residents—making the tax burden around here even more regressive, and boosting local sales taxes to 10.25%, the highest in the country. In the face of a public outcry, the rest of the Board had second thoughts and voted to roll back the increase—and Todd actually vetoed the measure.
Todd doesn’t have much public support on this, because unlike Quinn’s situation there’s no evidence that he ever even tried to make any hard choices to balance the budget. There are already politicians lining up to run against him next year, including some really good ones like Chicago alderman Toni Preckwinkle… but the full roster of competitors won’t be clear until we see the fallout of Lisa Madigan’s choice.
And let us not forget about city politics. One of the things that distinguishes Preckwinkle on the City Council is that she was one of only five aldermen (out of 50) to vote against the parking meter privatization debacle foisted on the city by mayor Daley.
Richard M. Daley is the son of the late Richard J. Daley, and between father and son (sensing a pattern here?) they’ve presided over the city of Chicago for 41 of the past 54 years. Somehow, mysteriously, Daley seems to have a knack for making inane statements, favoring cronies, cozying up to developers, and proposing (and executing) hugely expensive public boondoggles… yet still getting a rubber stamp from the City Council, and from the voters every four years.
However, the parking meter story may just be the thing that finally comes back to bite him. Here’s what happened in a nutshell: the city was facing a budget problem too, but not wanting to touch taxes, Daley decided to sell off the rights to the revenue from the city’s parking meters. The entire deal was worked out behind closed doors over a period of months, and presented as a fait accompli to the Council on a Monday, to be voted on on Wednesday. It passed, and the meters were leased—for 75 years—for $1.2 billion.
Now, privatizing public assets for a quick buck isn’t good policy in general; it just passes problems along to future generations rather than solving them, all while dodging accountability. But this turned out to be even worse, as diligently reported by the local free paper, the Chicago Reader. First, the joint venture (headed by Morgan Stanley) that won the contract promptly doubled (at least) the rates citywide, and expanded the chargeable hours. It also started replacing traditional meters with one-per-block pay boxes, making it (A) harder to find a legal space while driving, (B) more time-consuming to pay (a real inconvenience in inclement weather, not uncommon in Chicago), and (C) more expensive to add time to a meter once you’re there. In the meantime, it proceeded to do a terrible job at customer service, failing to update the terms on working meters or to fix broken ones, resulting in lots of inappropriate tickets.
Then, it turned out that the city let itself get taken for a ride, since the city’s own inspector general (a Daley appointee!) reported that the actual value of the deal was roughly a billion dollars more than the city got for it.
Then it turned out that the consulting firms the city used, that recommended the whole plan in the first place, made a bundle off it, and vetted the bidding process, also happened to have tight relationships (read: conflicting interests) with the winners.
It’s so bad that the state AG, Lisa Madigan (to bring things full circle), has opened an investigation “to determine if consumers have been defrauded.” And the public anger continues—unlike most of Daley’s escapades, this is something that affects almost everyone in the city, across demographics and neighborhoods, in really obvious ways. It may cool down before the 2011 elections… but then again, it may not.
When I tell friends and family from elsewhere about state and local politics here, they react with incredulity—”they didn’t really do that, did they?” Well, yeah, they did, and do, all the time. Self-serving and short-sighted: that’s how things are run around here. When times are good and money is flowing, lots of people (too many) are willing to look the other way. In times of crisis like these, though, all the ugliness rises to the surface, and it’s impossible not to notice.
Personally? I don’t really mind paying a fair price for parking—if the money’s actually going into the public purse. And I have no problem paying an extra 1.5% income tax… if it means my state isn’t bankrupt next week. I just wish more of the folks actually running the show could share that basic comprehension of how not to cut off one’s nose to spite one’s face.Tags: Chicago, Cook County, Illinois, Lisa Madigan, Mike Madigan, Pat Quinn, taxes, Todd Stroger