Taxes

Today's News-Gazette:

The Illinois Supreme Court is expected to issue its long-awaited decision Thursday morning on whether the hospital is property tax-exempt. Arguments on that case were heard before the high court last September.

The Illinois Department of Revenue removed the hospital’s longtime tax exemption in 2004, on the recommendation of the Champaign County Board of Review, finding the hospital didn’t qualify as either a charitable or religious institution.

The Supreme Court decision stands to affect other not-for-profit hospitals throughout Illinois, depending on how broadly the court chooses to rule.

At stake financially for Provena and taxing districts in Champaign County is more than $1 million a year in property taxes the hospital had been paying to the city, school district, park district and other taxing bodies. In all, the hospital had paid $6.1 million between 2003 and 2007 — money local governments didn’t get to keep as the case moved through the court system, but stand to have refunded to them if Covenant loses in the final round.

Discuss.

I've mocked claims that Illinois' House and Senate Republicans are somehow responsible for our current budget disaster, in language very similar to this:

What Madigan just flatly refuses to acknowledge is that Democrats could take the first major step toward fixing the state's finances all on their own. More specifically, they could bring to the floor some version of HB 174, which passed out of both the Illinois Senate and a House committee last May. In its basic form, this legislation brings in new revenue via an income tax hike while offsetting the burden on low-income taxpayers by boosting the state property tax credit and the Earned Income Tax Credit. Nine Democrats could vote against the bill and the caucus would still have enough votes to approve the measure by simple majority.

In short, Speaker Madigan and his allies in Springfield need to stop whining about the Republicans when they have the votes to pass a sustainable budget on their own. No one is going to buy the idea that the GOP is responsible for the inaction in Springfield. Such an argument makes the speaker -- and the party as a whole -- look dysfunctional and cowardly. Come November, that perception could hurt Madigan's precious majority more than an income tax increase.

(Emphasis added.)  The difference, this time, is that this is coming from Progress Illinois, an excellent liberal blog sponsored by SEIU.

They're right, of course.  If Democrats in Illinois think that the best solution to our budget problems is a tax increase, they can pass one all by themselves, with votes to spare.  They don't need Republicans any more than they need them for anything else.

First, go here:  https://www.revenue.state.il.us/app/idti/    and follow all instructions.

Go to page 14.

Run the property address through your favorite website ( mine is   http://www.co.champaign.il.us/ccao/assessor.htm   ) to determine ownership.

Not what I expected to see... 

As usual, CapFax is all over it.

* Governor Quinn, speaking after a lengthy meeting with the four caucus leaders, announced a ‘meeting of the minds’ had coalesced around the concept of a pension obligation note.

A pension obligation note -basically a short term bond- would most likely have a 5 year term. The pension note will allow the IL to make all constitutionally required pension payments for the coming fiscal year.

The perk, according to Quinn, is that note will free up between $2.2 and $2.3 billion to help balance the budget.

Quinn expects the GA to pass the pension obligation note bill tomorrow.

* Leadership also agreed upon the need for further cuts in the state’s operating budget.

The size and scope of these additional cuts are still to be determined. There has been some talk in the Senate of an additional $1 billion in cuts from the operational budget, but the Governor did not commit to that figure. No specific departments or programs were identified as possible areas of saving.

Once a figure for the cuts is agreed upon, Governor Quinn will determine where the cuts will fall.

Interesting headline in the NG - "Champaign Dems reluctantly ready to OK school tax"

The sales tax for planning, land acquisition, construction and reconstruction of school facilities in the county will go into effect Jan. 1. It will apply to all purchases except automobiles, boats and farm equipment, plus food, drugs and certain medical equipment.

Ten of the 15 Democrats on the county board attended a caucus Tuesday evening and indicated they would support the measure, which will come up for a full board vote at 7 p.m. Thursday at the Brookens Administrative Center, 1776 E. Washington St., U.

And a key county board Republican, Alan Nudo of Champaign said separately Tuesday that he is satisfied that school districts in the county are fully committed to providing some property tax relief with the sales tax increase. Nudo and some other board members had expressed concern that school districts were backing away from that promise.

But he said he and county board chairman C. Pius Weibel met last week with Jane Quinlan, the Champaign-Ford regional superintendent of schools, who had received commitments in writing that the school districts that already have construction bonds out, including Champaign, Urbana and most others, will use the sales tax revenue to pay off those outstanding bonds in order to reduce property taxes.

"They all have basically recommitted to what they promised before the April vote," Nudo said. "I'm willing to sign off now."

The County Board can either reject the sales tax despite the referedum's passage, approve it a the full one percent or approve it at some smaller increment.  I had thought approval of the full one percent was a foregone conclusion due to the political cover of the referendum's passage.

The State House and Senate failed to agree on a budget or tax and fee increases in time for last night's midnight deadline.  The Senate had earlier approved a very large income and sales tax increase in a Hail Mary effort to get the House to do to the same, but in the end the House did not.

The Governor now has to weigh whether to sign, reduce or outright veto a capital (construction) spending plan passed earlier, and has similar decisions to make about a six-month stopgap budget that passed both chamber of the legislature at the deadline.

Tom Kacich:

The undermanned Republicans somehow won this budget session. Neither Gov. Quinn nor Speaker Madigan came out of the session with what they wanted -- an income tax increase. They may still get it, but it won't come easy.

The elation in the Senate 24 hours ago -- after a huge income tax and sales tax expansion bill was passed -- has been replaced by grousing about the lack of courage in the House.

There may be grousing about the House, but at the moment, there is no pent-up demand among voters that taxes must be increased to solve these problems.  There is still sentiment, especially in wake of the recently-passed "incumbency protection" campaign finance reforms, that spending can and should be reduced.  For those who argue that a tax increase is a necessity, there has been precious little effort to sell that necessity to the public at large, and the effort that has been made (the SEIU and teachers' unions advertising) has been transparent.

Stay tuned to CapFax Blog to track the budget action as it continues once again through the summer.

UPDATE:  WDWS' Patrick Pfingsten got in a late-night podcast interview with Sen. Mike Frerichs after session had adjourned.

Not to long ago the government came out with a report talking about the solvency of the Medicare and Social Security Funds.  It is not surprising with the economy doing poorly that these funds are not doing as well as expected.  The social security fund will be exhausted in 2041 and Medicare will be exhausted in 2020.

That is a little alarming but really that still is a few years away we can sit on this awhile longer right?  Wrong!

What they don’t tell you is that the tooth fairy has sold you a bill of goods.

Welcome to reality folks.  That SS “trust fund” is a figment our imaginations.  Where exactly does the government put this money it is saving?  In US Treasury bonds.   Hmmmmm so in the year 2017 when our income in SS tax is less then our anticipated expense the government will be able to cover it with what????  Who actually pays back these bonds with interest?

That’s right they can print more money or increase our taxes….. yea problem solved.

Just days before Illinois' legislature is set to vote on large tax increases on everything from beer to wages, take note of the results from California's ballot initiatives on tax increases yesterday.  None of the tax increases garnered as much as 40 percent of the vote, with most of them losing every single county - including San Francisco and Los Angles.

The message:  Even in California, voters overwhelmingly prefer steep spending cuts to tax increases.

Ok I have to admit that this is a pet P of mine.  How long are we going to sit by while the county spends massive amounts of money to run a private business? 

I want grandma taken care of as much as the next guy but what is the county nursing home providing that is not provided by other nursing homes in the area?

If I cannot afford to be taken care of and do not qualify for Medicare/ Medicaid will they take me in?

Do they give preference to the poor or those on Medicare?

What exactly am I and other taxpayers getting for all the money that is being spent at the County nursing home?

March is a loss of 50k not including the pension subsidy and free building.  This for a government business that is run like a business not as a charity.

What liabilities are taxpayers taking upon themselves?

How long are citizens of Champaign going to sit by while money intended for the poor and elderly is squandered on an unsustainable plan?

What if we took the 50k, plus what we are spending on the building, plus the pension payments, and just hand it out to the 200 elderly at the nursing home?  At least then maybe they wouldn’t have to risk being punched in the face or dieing of a broken leg caused by incompetence.

How many people could be helped with that money if we weren’t too prideful to admit that we suck at running a nursing home?

The owner of Market Place Mall, General Growth Properties, has filed for bankruptcy.  It seems like bankruptcy doesn't have a major impact on the business operations in the short term.   But it does have a major impact on taxing districts.  I'm at home now, but my rough estimate is that Market Place pumped about a million dollars into Unit 4 alone last year.  Add another million for other districts.  GGP will still get the bill for that, but it will be tied up in bankruptcy court.  A bankruptcy prevents the property in question from being sold at the tax sale so it just creates a big hole in the collections.  The last big bankruptcy that I recall affecting us like this was KMart, but I'm sure that figure was nowhere close to what this one will be. 

Update:  General Growth can still opt to pay these taxes.  They will get charged interest if they don't, so they have some financial incentive to do that.  But obviously, they're broke, so it's likely they won't.  I'll keep you posted as the tax payment deadlines come around.

There's a "Tea Party" in Champaign tomorrow:

City: Champaign / Urbana
When: April 15, 12:00pm - 3:00pm
Where: 400 W. University Ave., West Side Park
Contact: EMAIL
Phone:217.337.1477
Other Info:
Facebook Group: CLICK HERE

Some light reading material for the weekend.

"That's the essence of the bailout: rich bankers bailing out rich bankers, using the taxpayers' credit card."

Today's NG:

We urge voters to approve a property tax increase for the Urbana parks.

A year ago, the Urbana Park District asked voters for a property tax increase of 25 cents per $100 of assessed valuation, an amount The News-Gazette as well as a majority of voters considered to be too much.

We urged park board members to be straightforward about their priorities, modify the requested increase and try again. They have done so, this time asking voters for an increase of 15 cents per $100 of assessed valuation, a hike that would cost the owners of a $100,000 home about $50 more.

More information from the Park District here.

The Unit 4 "Key Communicator Network" (KCN) distributed a general letter from Mr. Culver to "request [State Rep's] assistance in opposing the recommendation from the Illinois State Board of Education that the Hold Harmless portion of the General State Aid Funding Formula be phased out over three years beginning with the 2009-10 school year". I can post the contents here if there are others who would like to see it. Based on what little I know about state finances, this seems like a well-thought out letter with very reasonable arguments.

My purpose in posting this note is to show some of the good things that Culver and Logas do "behind the scenes". I personally do not see much like this from the Administration, so I am intentionally highlighting something positive (IMO). I am glad that someone over there is keeping their ears to the ground and knows enough legal mumbo-jumbo to make sense of the myriad numbers.

On the other hand, I am very curious who is responsible for initiating this modification to the General State Fund. Is it a result of the massive debt we are carrying? Or is someone trying to "trim the fat"? Why is the Illinois State Board of Education recommending this? Who benefits and why?

Looking for answers....

Save the Date: 04/15/09 Noon - Daley Plaza - Chicago, IL

The next rally/protest (whatever you call these things) is scheduled for Noon on 04/15/09 in Daley Plaza, Chicago, IL. 

Warning: there are protesters in the crowd who are cursing the republican speaker and the language might be offensive to you.   I don't think I've ever seen a capitalism rally.    There's a first time for everything.   I think it's about high time I attended my first political rally.   See you in Chicago!

Note: The republican they were cursing was Dan Proft.   Didn't he speak at a recent breakfast in Champaign?

At the beginning of last year I blogged about a hiccup in the stimulus checks that Bush signed into law that included disabled veterans whose disability compensation isn't regarded as "income" for income tax filing, nor is it normally reported. The problem occurred with the new requirement to report that compensation on an unrelated line for social security benefits, and the change was not noted in the instructions which were probably all printed long before the bill became law. From the late IRS notification last year:

Normally, certain Social Security, Railroad Retirement benefits and certain veterans’ payments are not subject to income tax. However, the economic stimulus law passed in February contains a special provision allowing Social Security recipients and recipients of certain veterans’ benefits and certain Railroad Retirement benefits to count those benefits toward the qualifying income requirement of $3,000 and thereby qualify for the stimulus payment.

...

People should note that Line 20a of Form 1040 and Line 14a of the Form 1040A are designated for Social Security. To qualify for the economic stimulus payments, these lines should also be used to include any qualifying Railroad Retirement or veterans’ benefits.

This year is looking to hit the same snafu as the hotly debated stimulus package appears to include a similar scheme to issue stimulus checks to tax payers but also once again includes disabled veterans who generally do not pay income taxes on their disability compensation.

Almost all veterans are familiar with the concept of "hurry up and wait" but if you were an early bird on your taxes last year that could have resulted in having to waiting to file a corrected filing and then waiting even longer for that correction to result in a stimulus check long after everyone else in line. To avoid that unnecessary waiting, it may be best to hold off on filing your taxes this year until the fate of the stimulus package is known and the IRS figures out how it's going to handle disabled veterans compensation.

It'd be interesting to see how many veterans missed out on last year's stimulus checks given the inaccurate tax directions and the abysmal outreach to qualifying veterans. I haven't seen any numbers on that though.

Patrick Ruffini:

What's the main reason Republicans are dispirited right now? Because the Republican Party no longer represented less spending and limited government. What do we propose to do to fix it? Why... double down on this strategy by throwing in with the biggest spending bill in U.S. history if does enough tax cutting! As Jon infers, if the GOP accepts massive stimulus spending of any kind, it will sever the GOP from its base for years, and keep Republicans from rallying around a unifying limited government message in 2010. Instead of a peaceful 1994-style revolution, this will likely trigger a bloody Goldwater-style takeover of the GOP from the outside which may take 2 or 3 presidential cycles to fully play out. Ugly, but it may turn out, necessary.

And:

[T]he Republican leadership in Congress has to recognize that number one political priority is not to give voters warm and fuzzies by angling into photo ops with Obama. Yes, he's popular, but his popularity can only redound to the benefit of one party, and that's not Republicans. For a cautionary tale on what happens when a party tries this strategy, see the 2002 midterm elections.

The GOP's number one priority politically is to set into motion a series of events that will make Obama look more ineffective, partisan, and unpopular than he is today. Playing hard-to-get on the stimulus is one way to do it. And we need to set the stage for a unified and effective Republican opposition that will actually fight from top to bottom. Even if Democrats did some truly stupid things these last two years, it was always impossible to rally grassroots Republicans in opposition because the party had zero credibility. Closing that credibility gap -- not beating Obama in popularity contest right now -- must be job one in order to rebuild the GOP.

I agree.

Man bites dog, but interesting for the particulars:

Champaign saw sales tax receipts decline by 1 percent or $25,000 overall, to $2.45 million, for the month of September compared with the same month in 2007. That decline came after gains of 6 percent and 5 percent, respectively, in July and August.

"I'm certainly concerned," said Richard Schnuer, Champaign's finance director. "Our budget has sales tax income at about $31 million. Every 1 percent increase is $300,000. If sales taxes are flat for the year and we've budgeted a 2 percent increase, that's a $600,000 gap we've got right there."

Discuss.

Someone mentioned this is comments last week:

Taxpayers can voice their opinions Wednesday on a new property tax proposal for the Champaign-Urbana Mass Transit District.

The tax levy is a 7.5 percent increase.

A hearing will be held at 3 p.m. that day at Illinois Terminal, 45 E. University Ave., C.

The $6,074,000 maximum levy is up from last year's $5,650,000, Managing Director Bill Volk said.

I wonder how they will handle the massive crush of public participation?

That didn't take very long:

The Unit 7 school board unanimously approved a resolution Wednesday to again put the countywide sales tax pro- posal before voters in the April 7, 2009, consolidated election.

The proposal to increase the sales tax rate in Champaign County by 1 percent was defeated in the Nov. 4 election by 262 votes out of 76,820 cast. One board member noted that more than 6,200 people voting in the general election did not even vote on the county tax proposal.

Superintendent Michael Shonk said that at a meeting of county school superintendents earlier this month, all 14 wanted to place the proposal back on the ballot. "I'm pretty positive about the April ballot and that the proposal will fly this time," he said.

I think they're hoping to much lower rural turnout in April, because so many local offices in small towns are uncontested.  I wonder if any opposition will coalesce?