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* My weekly syndicated newspaper column…
Back in February, the Civic Committee of the Commercial Club of Chicago proposed some sweeping revenue changes designed to significantly boost the state’s credit rating to “AA” over time and help accelerate the state’s pension payments to bring down its huge unfunded liabilities.
The group’s proposals were striking because their members are some of the wealthiest people in the state. In the country, even.
The Civic Committee led the charge several years ago to slash pension benefits for government employees and has long been known to be on the same side of the fence as the loud legions of Illinois government bashers. Heck, they helped build that fence. They also helped lead the fight against a graduated income tax proposal.
The committee surprised almost everyone by proposing a temporary, 10-year personal and corporate income tax “surcharge” to raise $2.9 billion per year, or, as an alternative, a tax on retirement income. The committee also proposed expanding the sales tax to services, which it said could bring in an additional $1.2 billion a year if the state adopted Iowa’s model. Much of the money would be used to pay off state pension debt.
In exchange, the committee proposed repealing the corporate franchise tax and the estate tax.
The franchise tax was lowered during the spring session. And lowering or even repealing the estate tax was also on the Senate’s discussion table this year. Senate Republicans at one point thought they might make some headway, even though the governor has long expressed reservations.
As a billionaire who inherited great family wealth, Gov. J.B. Pritzker wasn’t exactly eager to sign such a bill into law. But Republicans apparently saw some signals that the governor would be open to such a plan this year if the legislature decided to go ahead.
Senate President Don Harmon reminded me last week when we spoke that the Senate had already passed a repeal of the estate tax.
“I am more convinced than ever that the estate tax, more than the income tax, determines people’s residency,” Harmon claimed. He has said for a while that he believes many people move away from Illinois not because they want to lower their current tax rates but to assure their heirs inherit more of their money when they pass away than they would if they were still in Illinois.
Harmon said getting rid of the estate tax is “worth discussing but only in a broader tax reform package. It’s not something we can do as a one-off. It has to fit within a broader tax reform package.”
A top Senate Republican source suggested recently the state budget talks veered away from the estate tax issue because Harmon wanted a broader deal down the road. The source also said it sounded like the Civic Committee’s plan could be a blueprint, or at least a starting point.
Harmon confirmed that he was indeed looking at the recommendations.
“I think that the Civic Committee offers a very interesting blueprint,” Harmon said of the tax hike proposals the group proposed. “And if in fact the Civic Committee can generate broad support from the business community and from Republican lawmakers, it’s absolutely worth a longer conversation.”
That’s a big “if” at this point, but we’ll see.
The Civic Committee also recently announced that it plans to raise tens of millions of dollars for Chicago violence reduction programs, including finding meaningful jobs (with wrap-around services) for people who had gone through violence prevention training, many of whom have extensive criminal records.
Instead of a traditional “get-tough-on-crime” approach, the Civic Committee emphasized “constitutional policing” and other police reforms. The group also announced that it had hired Robert Boik to help spearhead that effort. Boik oversaw Chicago’s 2019 federal consent decree to overhaul policing until he was fired after criticizing his superiors.
Harmon seemed quite encouraged by the group’s proposals and its entire approach these days.
“From our research,” Harmon said, “there’s a dichotomy in the public perception. People want to be safer. But people understand that the root causes of crime are far more complicated.”
He said he believed people were moving away from the “locking up and throw away the key” types of people.
“I confess, it’s not what I expected” Harmon said of the Civic Committee, which has long had a conservative bent.
“I think that the Civic Committee is approaching major problems with a very different perspective,” Harmon said.
More on that topic next week.
* Meanwhile…
Former Chicago mayoral candidate Paul Vallas is joining the Illinois Policy Institute as an adviser. […]
Vallas reiterated themes from his campaign, saying, “The city of Chicago is at a breaking point. Our public agencies are about to fall off a fiscal cliff, the kids in our public schools are falling behind after Covid-19 lockdowns … our economy is lagging and businesses are unable to operate in a high-crime, high-tax and high-regulation environment.”
posted by Rich Miller
Monday, Jun 12, 23 @ 10:00 am
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Re Vallas, well, that’s gonna be awkward when all those Dem pols who endorsed him have to criticize what he writes, proposes for the IPI.
Comment by Amalia Monday, Jun 12, 23 @ 10:09 am
Does his repeated use of “our” mean Vallas is still pretending to live in the city?
Comment by Big Dipper Monday, Jun 12, 23 @ 10:10 am
I’ve always found the Civic Committee to be the most responsible, fair and accurate analysts among the “loyal opposition.”
IPI is usually among the most misleading and deliberately biased — Paul Vallas shows what we suspected about him.
Comment by Walker Monday, Jun 12, 23 @ 10:17 am
===Former Chicago mayoral candidate Paul Vallas is joining the Illinois Policy Institute as an adviser.===
I guess Illinois Review wasn’t hiring.
Comment by Dance Band on the Titanic Monday, Jun 12, 23 @ 10:21 am
Vallas a 4 time loser.. and the IPI.. a match made in heaven.. neither very relevant anymore
Comment by NotRich Monday, Jun 12, 23 @ 10:23 am
Just another in the long line of Democrats who have used the revolving door between campaigning for public office and making up half-truths for IPI. /s/
Comment by Anon324 Monday, Jun 12, 23 @ 10:24 am
During the mayoral campaign, one of the Awake Illinois cranks said it best when she called Vallas “politically promiscuous” after he tried to backpedal away from nice things he previously said about the group. True then, true now.
Comment by Roman Monday, Jun 12, 23 @ 10:25 am
Re: “if the state adopted Iowa’s model”
Good.
Expanding the sales tax base is the only way to avoid a structural deficit between a state that provides services and the current tax base.
Comment by Phineas Monday, Jun 12, 23 @ 10:26 am
So Vallys was a Republican candidate for Mayor after all, eh?
Comment by Jerry Monday, Jun 12, 23 @ 10:26 am
Walker, do you mean the Civic Committee (formerly headed by Ty Fahner) or the Civic Federation (formerly headed by Laurence Msall)?
Comment by Juice Monday, Jun 12, 23 @ 10:27 am
There is no worse item on a resume or in a work history than “Illinois Policy Institute”… unless that same resume or work history also has “Rauner Administration”
None worse.
Vallas joining IPI is kinda meta… grifting off the grift that was grifting off Vallas.
It’s adorable
Comment by Oswego Willy Monday, Jun 12, 23 @ 10:29 am
I guess this means even the BGA wouldn’t take Vallas.
Comment by Big Dipper Monday, Jun 12, 23 @ 10:33 am
So all the attack ads thrown at Vallas calling him a Republican, which he vehemently denied, were actually accurate. Cool.
Comment by Montrose Monday, Jun 12, 23 @ 10:34 am
Now that Illinois has shown progress and fiscal responsibility, it encourages support for more revenue to pay more on debt.
“People want to be safer. But people understand that the root causes of crime are far more complicated.”
Correct. Many people want crime to be “out of sight, out of mind,” where they don’t care about it unless it affects them. That’s not a plan. Thankfully big biz types want to put skin in the game and help reduce crime through jobs investments.
Comment by Grandson of Man Monday, Jun 12, 23 @ 10:36 am
Vallas is the grift that keeps on grifting…
Comment by Friendly Bob Adams Monday, Jun 12, 23 @ 10:37 am
===to be the most responsible, fair and accurate analysts===
You may be thinking of the Civic Federation. Much different group.
Comment by Rich Miller Monday, Jun 12, 23 @ 10:46 am
There are some poison pills in the Civic Committee’s proposals as Rich points out. “JB Pritzker made it easier for billionaires like himself to inherit their money without paying taxes” is a pretty effective political attack. I’d rate the proposal somewhere between serious solution and unserious budget fantasy.
Comment by Three Dimensional Checkers Monday, Jun 12, 23 @ 10:57 am
I’d say the scriptwriters were too on the nose with Vallas joining the IPI, but they are on strike!
Comment by ChicagoVinny Monday, Jun 12, 23 @ 10:57 am
Juice and Rich, absolutely correct.
I meant Civic Federation for the praise, (and I can’t even blame autocorrect)
Comment by walker Monday, Jun 12, 23 @ 10:58 am
I went on the CCCCC website. Their “team” is comprised of people with really diverse backgrounds and vast perspectives. Probably some generational change emerging too. Glad they are taking a leadership position that is bold with a surprising direction.
Comment by levivotedforjudy Monday, Jun 12, 23 @ 11:03 am
Beware of any Civic Committee fine print.
Regarding Vallas, he is who we thought he’d become. Dems who endorsed him for mayor should be embarrassed.
Comment by Norseman Monday, Jun 12, 23 @ 11:07 am
Vallas called IPI the strongest watchdog in the state lol.
https://twitter.com/peoplesfabric/status/1668275906102566913?s=20
Comment by Big Dipper Monday, Jun 12, 23 @ 11:15 am
It is truly wild the number of IL Dems who lined up behind Vallas. There should absolutely be some behind the scenes reckoning.
Comment by SWSider Monday, Jun 12, 23 @ 11:20 am
==Vallas called IPI the strongest watchdog in the state==
What they are is the strongest anti-union and anti-public employee organization in the state. I don’t think they publish anything that doesn’t end with something about taking public employee pensions away from them.
Comment by Demoralized Monday, Jun 12, 23 @ 11:25 am
Like the way President Harmon is open to ideas. A nice change from the finger pointing blame game we often see in Illinois.
On the tax increase idea, we are all somewhat to blame for the pension problem. Taxpayers voted for representatives that acted irresponsibly and employees groups often supported the same politicians. How about all stakeholders pony up additional contributions to the funds and address the problem in a more timely manner. The idea put forth by folks that want to reduce benefits is both unfair and seems to be not consistent with the Illinois Constitution. Amending the Constitution is just not a good idea.
Contract negations over employee compensation are going on now. If part of the raise was allocated for pension imbalances the problem would move toward a solution. Before taxpayers are hit again, a combination of all the stakeholders might be a way to improve funding. I am thinking it would be a hard sell to have only taxpayers come up with all the money needed to put the funds in a safe place for the employees.
Also thinking the idea of a wholesale elimination of the estate tax would probably be a hard sell. Just not thinking voters would buy into giving Gov. Pritzker yet another tax break.
Hat tip President Harmon and the business group for starting a discussion on a very important issue.
Comment by Back to the Future Monday, Jun 12, 23 @ 11:27 am
Senator Durbin, are you still on board with Vallas? How did so many voters know him for what he was yet you didn’t? He’s gone home, you’ll be able to catch him on Proft and Ives shows and podcasts.
Comment by Lincoln Lad Monday, Jun 12, 23 @ 11:29 am
The vast majority of JB’s wealth is already off shore far away from the reach of Uncle Sam and not subject to an estate tax which somehow isn’t a problem
Illinois is an outlier as far as being one of the few states to impose it. In the Midwest, only Minnesota has one and somehow California of all places doesn’t either. Perhaps they realize it actually does push wealthy retirees out of the state.
https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/state-and-local-backgrounders/estate-and-inheritance-taxes
Comment by Lucky Pierre Monday, Jun 12, 23 @ 11:34 am
@LP
Shouldn’t you be at your hero Bruce Rauner’s portrait unveiling instead of posting your drivel here?
Comment by Demoralized Monday, Jun 12, 23 @ 11:57 am
A state that doesn’t tax retirement income is pushing retirees out of the state. Ah the mental gymnastics retired to push partisan talking points.
Comment by Big Dipper Monday, Jun 12, 23 @ 12:18 pm
==Beware of any Civic Committee fine print.==
Including on crime.
Comment by Stephanie Kollmann Monday, Jun 12, 23 @ 12:43 pm
===Former Chicago mayoral candidate Paul Vallas is joining the Illinois Policy Institute as an adviser.===
Of course he did.
Perhaps we could arrange for an extensive series of debates between Paul Vallas and Pat Quinn? Would keep them busy and out of our hair.
Comment by Anyone Remember Monday, Jun 12, 23 @ 12:56 pm
the longer I think about the Vallas new spot the more angry I am. Not at him….he’s lost his soul….or the IPI…they are ridiculous….but at the Democrats who supported him for Mayor. #1 they should have found a better candidate to represent their mainstream D values. #2 you cannot support someone who hangs out with AWAKE. you must have been asleep to miss that. Vallas was a terrible candidate for Democrats.
Comment by Amalia Monday, Jun 12, 23 @ 2:07 pm
Amalia, some of the Dems who endorsed him were quite elderly and probably not all that sharp.
Comment by Big Dipper Monday, Jun 12, 23 @ 2:15 pm
It’s great that the CC is trying to be a part of the solution instead of knowing what’s best and putting in little to no effort into making it happen.
Long overdue.
Comment by Loop Lady Monday, Jun 12, 23 @ 4:26 pm
Boik is a good hire for the Civic Committee. Sharp fellow.
Comment by Leslie K Monday, Jun 12, 23 @ 4:46 pm
Good for the input from the Civic Committee of the Commercial Club of Chicago. Illinois is defintely an outlier in this area.
Comment by IT Guy Monday, Jun 12, 23 @ 7:15 pm