Friday, May 19, 2006

Has the Governor Seen the Light?

UPDATE - Apparently the answer is 'Deal". Meeks is out.

Even on vacation, Rich Miller is on top of Illinois happenings. He just recently broke the story for his subscribers that there may be a deal between the Governor and Senator Meeks on the issue of education funding that would generate major new revenue for Illinois schools.

Without any inside knowledge to the discussions, I would think that the only viable potential source of a long-term revenue stream sufficient to generate those types of dollars would be the previously discussed privatization of the toll roads. This would allow the Governor to infuse sufficient dollars into the schools to stave off the Meeks bid without sacrificing his no tax increase pledge.

A question that remains in my mind though is what, if anything, is planned to address the issue of funding inequity between districts as well as the oft-discussed over-reliance on property taxes. Intelligent people have differed, and will continue to differ, on whether the schools need more money, but I would think that there is some consensus that the state needs to pick up its share of whatever monies are going into schools.

If local governments (eg. Cook County) are not somehow compelled to translate a massive new infusion of state money into some form of relief for property owners, there is still going to be a lot of work that needs to be done.

In any event, I commend Sen. Meeks for putting his words into action.


At May 19, 2006 at 11:39 AM, Blogger Yellow Dog Democrat said...

Rep. Fritchey is right, once again.

Property tax inequities are crushing businesses and manufacturers, especially in Cook's suburbs, and they are strangling Illinois' farm communities. They are also tough on those living on fixed incomes across the state, and they make it virtually impossible for middle class families to become homeowners in Chicago.

Just as important, the Meeks' deal will unlikely address the structural budget deficit, so we will find ourselves right back where we started in 2007: stealing from our health care to fund our schools. Stealing from vital human services to fund health care. Diverting pension payments to fund human services needs. And asking future generations to pick up the tab for massive borrowing to cover the gaps in it all.

At May 19, 2006 at 11:45 AM, Blogger Hon. John Fritchey said...


I'm curious to see any real estimates of revenue projections from a tollway deal (if that is in fact the source). In the back of my mind, I'm thinking that there may be enough dollars to assist with the pension issue as well.

If there isn't, you are dead on that are structural deficit is going to be hanging over us like the Sword of Damacles.

At May 19, 2006 at 12:02 PM, Anonymous Disillusioned Dem said...

I'm all for fixing school funding, but it's a shame that it takes the Governor getting the crap scared out of him in order for him to show any leadership on the issue. If this does get done, I give all the credit to Meeks.

It would be hard to put tons of new money into schools and look bad doing it, but in my opinion, that's what the Governor will have done.

At May 19, 2006 at 12:06 PM, Blogger Yellow Dog Democrat said...

Rep. Fritchey --

I think the tollway idea is a risky one. It hasn't gone over well in Indiana, and these leaseback deals are fraught with corruption.

I wouldn't be surprised to see the "Bond Deal of the Century" as part of this either. Selling off pension debt was one of the Gov's few revenue ideas that worked -- if he hadn't made so many political insiders rich in the process, it would've been flawless.

At May 19, 2006 at 12:33 PM, Anonymous Anonymous said...

If Rep Fritchey is correct and Meeks is out because of a Tollway deal, Blago is toast. Even the most spiteful of conservatives will come home to JBT if they think the tolls are being extorted. How do you think ads run by JBT describing how Blago is selling off the state to appease the Rev are going to play in Peoria?

Put a fork in this Turkey, He might be done.

At May 19, 2006 at 1:00 PM, Blogger President Palmer said...

If anyone actually believed Meeks was going to run, then shame on you, and shame on the press for not reporting what this was from the beginning, blackmail.

No wonder people are turned off by politics, it's a shameless business conducted by shameless people.

This state is a disaster, and that's from both parties there any hope??

At May 19, 2006 at 1:05 PM, Blogger Randall Sherman said...

Forgive me in advance, Rep. Fritchey, if I do not join with those cheering the Governor's apparent latest budget gimmick. I see no reason to believe that after 3 1/2 years of jerking around the people of Illinois with budget schemes that make President Bush's administration seem fiscally sound by comparision, Rod Blagojevich will now pull a education miracle out of his hat. More likely he has simply pulled a fast one on Senator Meeks and his supporters. Hopefully they will wise up to the truth long before November 7 rolls around.

Can someone tell the electorate what will happen when (not if) this budget scheme comes crashing down like the house of cards it probably is made of? Will your colleagues in the General Assembly be willing at last to address this and other issues affecting our state in a responsible manner (instead of basicly wishing the problems go away, like our current occupant of the Governor's office has done)?

One thing is certain... this action makes the decision as to whom the Illinois Committee for Honest Government will be backing in November a great deal simpler. Please be prepared to give our apologies to our mutual friend, Lt. Governor Pat Quinn. Thank you.

Secretary/Treasurer, Illinois Committee for Honest Government

At May 19, 2006 at 2:16 PM, Blogger steve schnorf said...

Dog, I really don't think making political insiders rich was a flaw of the Governor's POB program. The fees don't appear to be out of line with other bond issues in this and other states. Of course, if you're pissed about who got the money, I guess that's your perogative, but someone was going to get just about those very same number of dollars. I think the flaws were much more vital than that, but I understand exactly why they happened, they were totally predictable, and they don't have a whole lot to do with who was governor at the time.

On the new education proposal that we all await, I think the flaws in it are probably predictable, but let's not pre-judge. Let's see what the Governor has to say. I'll be disappointed if the Governor proposes (or if Meeks bought off on) a band-aid, even if it's a huge band-aid.

At May 19, 2006 at 2:53 PM, Blogger Larry Horse said...

There is no good reason to not lease tollways to the highest bidder. Not one. If that is what Rod is doing, I applaud him to the fullest and it would put me over from undecided to voting for Rod.

At May 19, 2006 at 4:34 PM, Anonymous Anonymous said...

Isn't the tollway throwing off money now? How much? Whatever the sum, it needs to be subtracted from whatever the sale will bring in with appropriate accounting adjustments.

This looks like an election year scam to get a one-time infusion of money so that Blago can get re-elected by showering money here and there. But when the one-time infusion runs out, and it'll go fast if his political pals have any say {and profit} from the lease. And we're back to where we were, minus the tollway income.
But once Blago is re-elected, he won't care if he has to raise our taxes.

At May 19, 2006 at 6:24 PM, Anonymous Anonymous said...

With the shortfalls in transportation infrastructure in the 6 county metro area, will any of this money be dedicated to highways & transit as it was done in Indiana? I am also concerned that this one time infusion of cash be spent on operating expenses and not treated as an annuity that could give relief to many issues.

At May 19, 2006 at 6:30 PM, Blogger Yellow Dog Democrat said...

Schnorf -

You've got me all wrong. I'm not pissed at all about who got the money. If anything, the fact that Kjellander pulled down almost $1 million in consulting fees has been a boon to Democrats.

No, what I meant was that what inevitably dooms the political gains the Governor could make out of any big move is that some insider, often someone on his Clout List, ends up getting rich in the process.

Only recently has the Governor realized that if he wants to get the most bang for his buck, he has to tell everybody "Make sure none of the clients of Wyma, Kelly or Rezko get the business." Which, ironically, is strong grounds for a lawsuit.

You can almost bet though that if the tollway is sold or we bond out the teachers' retirement system, someone with connections to someone on the Clout List will end up getting rich, and it's going to bite the Gov in the butt like a rattlesnake.

I hope Tusk, Scofield and Hoffman are thinking about this as this deal is being put together.

Let's also keep in mind that a deal negotiated between Meeks and Blagojevich doesn't necessarily have the support of Madigan or Jones. Jesse Jackson was talking only yesterday about circulating referendum petitions, so Meeks apparently isn't keeping him in the loop. And any lease deal or pension bonding deal would require GOP votes, and the Republicans aren't going to sign off on anything that gets Blago out of the woods, especially if it transfers wealth from Peter Roskam's district to James Meeks' district.

In other words, whatever this deal is, it isn't a done deal by any means.

At May 19, 2006 at 6:37 PM, Anonymous Anonymous said...


Here’s a set-up question for you: You’re an elected official, an official that is elected to solve problems like education funding. What is your plan to fund education? What plan are you willing to go on record as supporting? Tax increase, swap, program cuts, what?

I’ve noticed that most elected officials these days are quick to criticize ideas, but they don’t offer up any alternatives. Not that your one of those elected officials, but I would like to know what you think. Have you introduced any recent legislation to solve education funding?

At May 19, 2006 at 7:35 PM, Blogger Hon. John Fritchey said...


Very fair question and very legitimate observation. I am, and have been, one of the principle sponsors of HB750 (Miller-Fritchey) as well as HB755 (Miller-Fritchey), the two 'tax swap' bills. In fact, for a long time, I was the only sponsor from Chicago on the bills. Furthermore, I openly advocated a swap when I first ran for office in 1996.

As I have repeatedly stated, I never expected HB750 to pass as drafted, but felt (correctly) that it would be invaluable in forcing the dialogue on the issue of how we fund schools in our state.

The issue has been around for decades, yet has produced little more than rhetoric. Regardless of the final form a solution may take, it is imperative that something be done to address both the overreliance on property taxes as well as the inequitable funding structure that it produces.

At May 21, 2006 at 2:05 PM, Blogger steve schnorf said...

Dog, your point (which I am chagrined to not have understood from your post) is an excellent one.

At May 21, 2006 at 4:25 PM, Anonymous Truthful James said...

I don't think it is the tollway lease. I think it is HB750 or some version of it.

I see that you were a sponsor, Joh. The numbers I have seen shown not an equal swap but a multibillion dollar tax hike coming out of it. I have run the numbers myself, amd that is what shows.

Why are the A+ Illinois people bragging about this "surplus" and the other uses to which it can be put?

And why are we pouring more money into a broken Education system which is not delivering Educarion Value, only shoring up cost overruns? New thinking is needed.

If the parents ever wise up to the reality that their kids are not receiving the Value necessary to compete in the 21st Century economy, the PTA monopoly will be broken and it will be a new ball game.

At May 21, 2006 at 8:12 PM, Blogger FightforJustice said...

Will Meeks demand and get a memo of understanding, the way his Democratic colleagues did on their pork projects?

YDD makes some good points. Anon May 19 hasn't paid attention to Rep. Fritchey's credentials on this issue. He's one of the most passionate advocates of wholesale reform (which some call a massive tax hike) in the House.

At May 21, 2006 at 8:32 PM, Anonymous Anonymous said...

There are a couple of other ways in which the Governor could attempt to raise the necessary funds besides the tollway lease.

The Governor's Department of Revenue has been shopping a proposal to overhaul the corporate franchise tax for the past few months to the business community for the past few months. Ostensibly, they have been doing so in order to achieve input about "technical" flaws in the legislation and have done so while advising that it is their intent to make the changes in a "revenue neutral" fashion. It would be a simple matter to modify the rate structure of this proposal to raise the necessary additional funds for the education proposal.

If the Governor utilizes the franchise tax rewrite, he hasn't "violated" his pledges not to raise the sales tax or income tax rates. The franchise tax is imposed separately from the income tax and is not an "income tax." The Governor could raise the money from the business community without raising taxes on the "average working families" that he so often talks about.

In the alternative, the Governor could impose some type of a gross receipts tax on business similar to the Commercial Activities Tax recently enacted by the State of Ohio. Such a tax would fall upon businesses, and would no doubt be structured to fall upon out-of-state businesses to the greatest extent possible. Again, this very techincally would not violate the Governor's pledge not to raise the sales tax or income tax rates. As a techical legal matter a gross receipts tax is arguably not the same thing as an income tax. The problem with a gross receipts tax is that it would probably be challenged as violating the prohibition in the Illinois constitution against enacting multiple income taxes. However, by the time such an issue would be litigated to conclusion, the Governor would probably be through a second term.

This is sheer speculation from someone who is outside of government, but knows the tax laws. This would be what I would be suggesting if he wanted to raise the revenue and still be able to contend that he hasn't violated his promise.

At May 21, 2006 at 9:30 PM, Blogger Hon. John Fritchey said...


The additional funding that would be generated would be aimed at addressing the structural deficit that we have in Illinois. (If you care to weigh in on this one in more detail, TJ, you know how to reach me.)

But remember, as I said, while I support HB750, my bigger aim is to find any workable solution to the intertwined issues that we face which stem from how we fund Illinois schools. If the Governor has found a way to do this, he is to be lauded, regardless of impetus. If there are still issues to be resolved, well, the battle will go on.

At May 21, 2006 at 10:46 PM, Anonymous mulling it over ... said...

Property taxes are not the cause of the structural imbalance among Illinois school districts, it is the fact that the MONEY stays where it is raised. We simply need a more universal distribution system. Property taxes themselves have some inherent advantages ... for upper income individuals, don't you get a better federal tax break on property taxes than other state taxes? It seems to me that a much better solution than a pure swap would be to cut the regressive sales tax, jack up the property taxes, and jack up the basic exemption on property taxes, which are not as constrained by the IL constitution when it comes to a progressive structure.

John, whaddya think?


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