Opting Out of the Legislative Pension

Early on in the campaign, I said that, if elected, I would not take a legislative pension.

Pension Election

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Moving From Campaigning to Representing

State SealI’ve waited to discuss the outcome of the election, not because I didn’t feel that I owed you a comment, but to allow it to sink in. The days since November 8 have been a whirlwind, but now the dust has settled.

First and foremost, I want to thank my wife Deb for her support and understanding during all these months of solitary dinners and neglected household chores. Throughout the campaign she was my gracious silence, and my rock.

To those who supported me with their votes, I simply say that I will do my best to justify your confidence. For those who didn’t, I ask that you give me the opportunity to show you that I am representing you as well. To all the citizens of the 63rd District, I want you to know that your interests will always come before mine or those of anyone else.

On election night I received a very gracious phone call from John Bartman congratulating me on my win. He’s to be commended for standing up and taking on the challenge of running for this office, and I wish him nothing but the best.

Much has been said about the amount of money spent on this race, and it’s something that I cannot leave without comment.

This is the first time in my recollection that there has been anything like this in McHenry County. We’ve seen other races where millions have been spent, but we never thought it would happen here. But it did.

At the outset, I insisted that my campaign maintain a positive message, that it focus on the issues that confront us all: property taxes, business-friendly reforms and jobs. For the most part, that became the theme of the campaign and I’m proud of that. Both sides threw some elbows, but I insisted that this race would not become personal, and it didn’t. To his credit, John’s campaign held to the high ground as well. That can’t be said for most of the other races in this State.

The thing that embarrasses me is the sheer volume of mail pieces, radio ads and other media that blanketed the District. I know that name recognition is key to anyone getting elected to public office. But I also know that there’s a point of diminishing returns, and that point was reached weeks ago. The fact that there were millions of dollars available to spend doesn’t mean that they needed to be spent. While I was the beneficiary of many of those dollars, in no way does that make it any less disturbing. On behalf of those who thought that more was better, I apologize.

Finally, to those who’ll say that my election was bought and paid for, let me say this: I’m not so naïve as to not know where the bulk of my funding came from. But while the money might have been theirs, the message was mine. I’m going to Springfield with that message and will work to move the needle toward lower property taxes, less regulation and more opportunity for the people of the 63rd District and for the State of Illinois. My loyalty is to you and to those principles, and no other. McHenry County voters have long insisted upon independence from their representatives; I wouldn’t have it any other way.

Posted in 2016 Election | 2 Comments

Creative Destruction in Education

School ChoicePeople I’m talking to during the campaign tell me that property taxes are the top issue they want to see fixed in McHenry County. They all understand that the real driver of high property taxes is the cost of education.

When I’m asked by voters how I intend to change the way education is funded in Illinois, I tell them that it’s time to put the responsibility for paying for education squarely where Article X, Section 1 of the Illinois Constitution says it should be:

“The State has the primary responsibility for financing the system of public education.”

In an earlier post I said:

     “We can start the process by describing our current system of government schools, and the medieval guild that runs it for what it is: bloated, self-indulgent and counter to the needs of us, our children and our country. Rather than complain about the current state of education, we should tear it up, root and branch. Schumpeter’s notion of “the perennial gale of creative destruction” is no less applicable to education than it was to the buggy whip industry after the introduction of the automobile.

Of course, there’s another constituency that would benefit from having our government schools churned up by a wave of creative destruction: the long-suffering taxpayer who is being taxed out of his house to pay for that sclerotic system.”

So what would I replace it with? Five states: Arizona Florida, Tennessee, Mississippi and Nevada have enacted laws which give parents control over the funding received for their children’s education. It’s the Nevada program, called the “Educational Choice Scholarship Program” that interests me the most. Signed into law in 2015 (and challenged in court by the usual suspects), the program provides that education funds will be allocated on a per-student basis and will be deposited into an education savings account. Parents can then use that money toward expenses approved by the state’s treasurer’s office, such as tuition, textbooks, tutors, test fees, transportation, and therapy for students with special needs. Money left unspent rolls over and can even be saved to pay for college tuition.

(Side note: My Con Law professor at dear ol’ UGA said that if you examine the case law to determine what expenses may be paid to private schools with public funds without violating the Constitution, you’ll find that all of them start with the letter “t”).

The only stipulation for eligibility is that a student must have been enrolled in a public school for 100 consecutive days. That means 93 percent of students in the state will be eligible for the new program, according to the Friedman Foundation for Educational Choice.

Robert Enlow, president and CEO of the Friedman Foundation, said in a statement:

“Nevada is the first state to make the vision of dollars following every child to the school that works best for them a reality.”

So what’s so special about this program? Is this just another voucher program? No, the exciting thing about the Nevada ESA is that the money allocated to each student is truly portable. Unlike vouchers, which merely give parents the ability to shop for a single solution for their kids’ needs, thus allowing schools to ratchet up the cost of their programs to suck up the entire value of the voucher, this program allows parents to choose among a smorgasbord of options that are available across a wide platform of educational providers. If you want to put your kid into a private school or homeschool and he or she has special needs that are better provided in another program, the money can be allocated across those separate platforms. If you’re a homeschooler and your son wants to play football for the local district school, the money can be used for the participation fee.

Programs such as the Nevada ESA provide something that’s sorely lacking in the discussion of K-12 education: competition. It’s not a coincidence that those entities which we rely upon the most and which most consistently fail us are run by a monopolistic government.

If you want one more reason to support this program, it’s this: Hillary Clinton is against them.

 

Posted in Education, Federalism, Property Taxes | Tagged , , | 1 Comment

Dance Band on the Titanic

Dance Band on the TitanicThere’s an old saying that bad news comes in threes. It’s certainly true today for Illinois.

First comes the news that Illinois’ insurance rates under Obamacare are set to skyrocket by 43%-55% at the end of the year. Nothing about the Affordable Care Act (insert your own punch line here) has worked as advertised. The biggest driver of higher costs for the ACA is the radical expansion of Medicaid. Illinois was projected to have had an expansion of Medicaid enrollment in 2014 of some 200,000 people, when in fact the number was more than three times that amount. Think that’s bad? It gets worse. For the first 3 years of the ACA, the Federal government picked up the cost of Medicaid expansion. Starting in 2017, Illinois will be obliged to pick up the tab on 3% of that expansion, capping (heh) at 10% in 2020. That’s going to cost us anywhere from $375-$400 million per year in money we don’t have.

The second bit of bad news is that the Teachers’ Retirement System is meeting today to discuss the possibility of lowering the projected rate of return on its portfolio from its current rate of 7.5%. I’ve written earlier why this will hurt Illinois taxpayers, and won’t repeat myself here. Let’s just say that while such a move would reflect economic reality, that horse left the barn years ago. Most of my clients are pilots for United Airlines, and I know first-hand what it looks like when a pension plan explodes, and it’s not pretty. The same thing’s happening here, only the numbers are bigger and you’re going to be left holding the bag.

Finally, of course, there’s yesterday’s decision by the Illinois Supreme Court ruling against placing an independent map amendment on the November ballot. In a 4-3 decision which followed party lines (who’da thunk?) the Court ruled that Illinois politicians could continue to choose their voters, rather than the other way around. It also shows that the rot and corruption that has infected the Legislature for so long has crept to the judicial branch. Justice Thomas in his dissent said it all:

“The Illinois constitution is meant to prevent tyranny, not to enshrine it… Today a muzzle has been placed on the people of this State, and their voices supplanted with judicial fiat. The whimper you hear is democracy stifled.”

It’s becoming more obvious every day that without wholesale change in the Illinois legislature, the Republican caucus will continue to be nothing more than the dance band on the Titanic.

Posted in Cost of Government, Public Pensions, Public Sector Unions | Tagged , , , | 1 Comment

Providing Some Breathing Room to Seniors

Property Tax Credit

Click Image to Enlarge

As we search for ways to lower property taxes for everyone, there’s a simple remedy to allow those who live on fixed retirement incomes to gain some relief.

If you take a look at your Illinois income tax return, you’ll see that there’s a credit (a dollar-for-dollar reduction of tax) equal to 5% of your home’s property tax bill that you can claim to reduce your income tax liability. For instance, if your property tax bill is $5,000, you can claim a $250 credit against that liability.

However, the credit is “non-refundable”, which, as is stated in Publication 108 from the Illinois Department of Revenue:

“If your property tax credit exceeds the tax you owe, you may not receive a refund for that amount, and you may not carry unused credit to other years. Your property tax credit may only reduce the tax you owe to zero.”

The problem for most retirees, however, is that since Illinois doesn’t tax retirement income or social security, they don’t pay any state income tax. All retirement income taxed on their Federal returns is shown as a subtraction on their Illinois returns, often leaving them with zero taxable state income. Thus, the credit offers no relief to offset their ever-escalating property tax bill.

I would propose allowing the credit to become refundable for anyone over age 65 whose income Federal adjusted gross income (the starting point for calculating Illinois taxable income) is below $50,000, and when reduced by the subtraction for retirement income results in no state income tax. This would allow those seniors most affected by rising property taxes to gain some measure of relief.

The image at the top of this post is from the tax return of a client of mine whose adjusted gross income in 2015 was a little under $50,000, consisting mostly of a private pension, IRA distributions and social security and who paid over $9,500 in property taxes here in McHenry County. Had the credit been refundable, my client would’ve gotten a state tax refund of $477. Not a lot, but better than a poke in the eye with a sharp stick.

Until we have real property tax relief for everyone, which can only come when we change the way we pay for education in this state, measures such as this will at least help those most in peril of losing their homes some small respite.

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