by Ashley Muchow Found this cartoon from Jack Higgins of the Chicago Sun-Times from a couple weeks back. Unfortunately, its “ticking time bomb” metaphor is all too accurate a description of Illinois’s state pension fund. See the Institute’s proposed solution to address the state’s $83 billion unfunded pension liability.
by Ashley Muchow According to the Civic Federation, the City of Chicago is $2.4 billion behind on its pension contributions. In fiscal year 2009, Chicago pumped $423.9 million into its Municipal, Laborers, Police, and Fire pension funds. Using GASB standards, the Civic Foundation found that the city was $566.5 million short of what should have been contributed. So why...
Earlier today, President Obama announced a plan to freeze civilian federal employee pay for two years. The pay freeze “applies to all Executive Branch workers — including civilian employees of the Defense Department, but does not apply to military personnel, government contractors, postal workers, members of Congress, Congressional staffers, or federal court judges and workers.” The pay freezewill also “not...
by Wesley Fox Illinois along with California have massive budget shortfalls in 2011. In order to help states deal with budget crises, University of Pennsylvania Law Professor David Skeel argues states should be able to go into bankruptcy. Local governments have been able to declare bankruptcy in order to settle debts since the 1930s, but states have...
by Ashley Muchow History has shown us that increasing the top margin personal income tax rate has done little to impact tax revenues. Indeed, over the past 60 years, tax revenues as a percentage of GDP have averaged just under 19.5 percent even when the top marginal tax rate has fluctuated from its 92% peak in...
by Wesley Fox According to the Chicago Tribune, the Illinois Department of Corrections is $95 million behind on its bills. Many prison vendors have not been paid in months. Some have stopped extending credit to correction centers, and two havestopped doing business with the Department of Corrections altogether. If Illinois does not start paying its bills on time, more...
by Wesley Fox While several of Illinois’s neighbors are moving towards cutting taxes to help promote economic growth and job creation, Governor Quinn is pushing hard for an increase in the individual income tax rate to help “solve” Illinois’s budget problems. If he is successful, Illinois may be the only state in the region that will...
by Ashley Muchow The holidays are just around the corner–the smell of turkey and apple pie are in the air. As you begin documenting the expansive list of gifts to get grandma, aunt Carol, or your beloved grandson, consider this: Illinois legislators are considering a bill that would make shopping online for these loved ones...
by Ashley Muchow Steve Malanga’s article in the WSJ today covers a topic that is both timely and closely connected to Illinois’s deteriorating fiscal condition. One measure about to reach the lame-duck Congress floor is a call to extend Build America Bonds (BABs)–bonds used by states and municipalities to accrue nearly $160 billion in new debt...
by Ashley Muchow Using data from the CBO’s 2010 Long-Term Budget Outlook, Mercatus Center’s Veronique de Rugy has charted the long-term path of federal spending on three of its largest components–Social Security, Medicare and Medicaid, and interest on federal debt. Here’s the kicker: interest costs, if they remain on their current path, are set to become the majority of...
by Ashley Muchow Cook County Board President-elect, Toni Preckwinkle, recently warned county officials they would be responsible for making major spending cuts in their budgets to close the county’s $487 million gap. Preckwinkle met with elected county officials, including Cook County Clerk David Orr, Cook County Sheriff Tom Dart, and Treasurer Maria Pappas, asking each to cut...
President Obama will eventually agree to extend all the tax cuts if the Republicans stand firm and hold out for the full extension for all income levels. Extending the tax cuts helps Obama for his 2012 re-election regardless of how the economy performs. Allowing the tax hikes to go into effect could hurt him badly...
by Wesley Fox Many property taxpayers in Cook County are confused and angry by their property tax bills. While property value assessments are supposedly declining, tax bills are increasing leaving many asking, “Why?” According to one columnist at the Southern Star: I have been writing about the property tax for more than two decades now and still...
by Wesley Fox While many experts are trying to interpret the results of the election in Illinois, they might have an easier time determining the people’s views on taxes. In this year’s election there were dozens of referenda on the ballot asking voters if they support or oppose local sales and/or property tax increases. Of the...