Demmer’s Dispatch: March 4, 2019

Governor Pritzker Proposes Tax, Borrow & Spend Budget for Fiscal Year 2020
Governor JB Pritzker delivered his first Budget and State of the State Address to a joint session of the Illinois General Assembly in Springfield on Wednesday, February 20th. His introduced Fiscal Year 2020 budget proposal estimates general funds revenue at $38.9 billion and proposes $38.7 billion in general funds spending.

Leading up to the speech, Governor Pritzker promised a truly balanced budget proposal with no gimmicks. Unfortunately, rather than providing a responsible path forward for Illinois, the Governor presented a budget plan that relies on more than $1 billion in new revenue from initiatives he hopes the General Assembly will approve this year. We heard a lot about raising existing taxes and creating new taxes, but the Governor offered no solutions or suggestions for how we can generate revenue by increasing jobs or improving the economy. He made mention of eliminating programs that do not work, but offered no examples or policy ideas for improving government efficiency.

The Pritzker budget includes new revenue tied to the approval of recreational marijuana and sports betting. He’s also calling for higher taxes on a wide variety of products and services, a sharp increase in the video gaming tax, and a 5-cent tax on plastic grocery bags. None of these items has been presented to any House or Senate committee, and none has been brought to either chamber for a vote.

Pritzker’s budget also presumes lawmakers will take steps to change the Illinois Constitution, by providing for the implementation of a graduated income tax. He wants legislators to approve a graduated tax system, but provides no information of what the new rates would be or what income thresholds would be affected. Every Illinoisan should be wary of any income tax proposal that does not include new proposed rates or information about what income earners would be affected.

Perhaps the most troubling element of the Pritzker budget is a recommendation that the pension ramp be extended out another seven years. The proposal would save almost $900 million per year on the front end, but cost the state in the tens of billions or more in new debt over the long term. This “kicking the can down the road” is exactly the kind of irresponsible behavior that created Illinois’ pension crisis in the first place.

The next generation should not have to pay for poor decision-making by today’s lawmakers, and I heard nothing in the Governor’s speech that suggests that the massive state debt won’t continue to grow. Following the Governor’s address, Wall Street credit rating agencies weighed in, with S&P Global calling his budget “precariously balanced,” and Fitch Ratings warning that Illinois could face yet another debt downgrade if lawmaker’s adopt Pritzker’s budget.

I want to work collaboratively to address Illinois’ problems, but believe this proposed budget is a step in the wrong direction. I’m hopeful that as the specifics of his plan are heard by the various House appropriations committees, that bipartisan input is allowed, and a better final budget materializes.

I gave a radio interview following the address. Click here to listen to it.

House Appropriations Committees Begin to Meet and Consider FY20 Budget
The Appropriations Committees are already convening to hear budget requests and announcements of fiscal priorities from the various State departments. These meetings are open to the public and are posted on the General Assembly committee website. Many of the committee meetings are held in rooms that are wired to present live audio or video feeds to the public through the General Assembly website. In addition, users of the website can file slips of support or opposition to the budget bills and other bills before each committee. I serve as the Republican Spokesperson for the Appropriations- Human Services Committee. In this role, I will lead the Republican discussion as the committee hears from agencies funded through the human services areas of the budget.

Rep. Demmer Joins Republicans in Opposing Graduated Income Tax

Last week,Illinois House Republicans filed House Resolution 153, which states unified opposition to Governor Pritzker’s plan to tax small businesses and middle-class families out of the state through the implementation of a graduated income tax – an “Unfair Tax”.

This spring, Democrats will begin the process to receive voter approval to change the state Constitution to move Illinois from a flat tax to a graduated tax. This would remove an important protection for taxpayers while handing over a blank check to the government.

Last year, a House Democrat sponsored HB 3522, which sought to impose a graduated income tax. Under this plan, the Commission on Government Forecasting and Accountability revealed that 77 percent of Illinois taxpayers would see an increase in their income tax liability for a total of over $5.2 billion in new taxes.

Our caucus is unanimous in its opposition to this unfair tax. We have huge, systemic problems in Illinois, and these continual tax increases are not the solution. Raising taxes didn’t work in 2011 and it didn’t work in 2017. We need to enact policies that grow the economy and create jobs. A pro-jobs agenda, coupled with fiscal restraint, will put Illinois back onto a path toward financial stability.

Click here to watch the House Republican Leadership Team announce their filing of HR 153.

Demmer Sponsors Taxpayer Advocate and Empowerment Act

This year I am sponsoring legislation that would create a searchable database where Illinoisans could go to learn about every issue that will come before them on an election ballot. HB2726 would create the Taxpayer Advocate and Empowerment Act, and through the office of an appointed Taxpayer Advocate, Illinoisans could access an online, comprehensive, easy-to-use database to obtain complete descriptions of ballot questions that will come before them.

An average Illinois property tax bill could include more than 10 different taxing districts. With the passage of HB 2726, rather than doing research on several different web sites, taxpayers would be able to go to one site and learn how various ballot issues would affect them.

Through HB2726, a Taxpayer Advocate would be appointed to an eight-year term through a joint resolution approved by a three-fifths majority of the House and Senate. That individual could hire two Deputy Taxpayer Advocates, and the office would establish the comprehensive web site.

Rep. Tom Demmer Champions Local Government Consolidation Bill

With nearly 7,000 individual units of government in Illinois, we need to be looking for opportunities to consolidate units of government where it makes financial sense. I recently filed legislation that would provide local elected officials and voters with a method for reducing taxes through consolidation of a township that is coterminous with a municipality.

In instances where a township is located either entirely or almost entirely within a municipality, elected officials and taxpayers should be able to decide if both units of government are necessary. My HB2525 is identical to legislation I sponsored in the 100th General Assembly that gained nearly unanimous support in the House, but stalled in the Senate. The legislation provides for two methods through which a township consolidation question could be submitted to voters:

  • If a township board or municipal board adopts an ordinance to place the question on a ballot; or
  • If a petition signed by 10% of the registered voters in a township is submitted to the township board or municipal board

Upon certification of the ordinance or petition, a proposition to discontinue and abolish the township would be put before voters in the next election. If successful, all rights, powers, duties, assets, property, liabilities, obligations, and responsibilities of the township would be transferred to the coterminous municipality.

Take My 2019 Constituent Survey!

A 2019 constituent survey was recently mailed to households in the 90th district. Important votes are coming, and I want to offer constituents the opportunity to share their views on several key questions.

The survey includes six multiple choice questions, and participants will also be offered an opportunity to subscribe to an E-newsletter that will include updates on legislation and other issues affecting Ogle, Lee, DeKalb and LaSalle Counties and the State of Illinois. The survey can also be accessed through the “Constituent Survey” link on my web site at tomdemmer.com.

I will read every survey that is returned, and look forward to seeing the results. Survey responses will be accepted through April 15.

Large Turnout for Demmer-Stewart Office Open House
Senator Brian Stewart and I had a great turnout on Saturday for an open house we held at our new legislative office in Dixon. Approximately 50 people came out for some coffee and conversation with their elected officials and I was pleased to see some old friends and meet some new ones. Winners of my recent “Rich History of the 90th District” photo contest were invited to attend the event and see the unveiling of their photos at my new office. The new office is located in downtown Dixon at 105 E. First Street, Suite 110. We’re open Mondays through Thursdays from 9:00 – 5:00 to assist citizens of the 90th District with constituent issues related to state government.

COGFA Reports on Impact of Local Government Pensions
The Illinois Municipal Retirement Fund, the City of Chicago pension funds, and the Cook County pension funds are major obligations of the taxpayers of Illinois. The Commission on Government Forecasting and Accountability (COGFA), the General Assembly’s budget-watchdog arm, issued a report last week on these funds and their liabilities. Together with a separate family of funds that underwrite pensions for Illinois’ Downstate police officers and firefighters, these funds constitute the non-State-managed side of the overall unfunded pension liability of Illinois.

Defined-benefit pension systems have been challenged in the 2010s by very low worldwide interest rates on prudent, pension-fund-worthy interest-bearing investments. Many segments of the private sector have responded to these global economic conditions by phasing out defined-benefit pensions and encouraging their employees to invest in defined-contribution mutual funds with an emphasis on equity capital.  Illinois’ local governments, by contrast, are constrained by the terms of statutory law and the state Constitution in what they can do with respect to pension obligations owed to current employees and vested members of their pension funds.   

The unfunded liabilities of the eight Chicago-based pension funds covered in this February 2018 report is $41.8 billion. The comparable figure for Cook County is $6.9 billion and the comparable figure for the Illinois Municipal Retirement Fund (non-Chicago, non-Cook County, non-police, and non-firefighting public employees in suburban and Downstate Illinois) is $3.0 billion.