Harmon pleased with override, but 'still work to do'

State has a budget after voting against governor's veto

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Bob Skolnik

After two long years without a budget, the state of Illinois finally has one, even if it took an income tax increase to get there.

Last week the Illinois General Assembly overrode a veto by Gov. Bruce Rauner to pass the budget and increase the personal state income tax rate to 4.95 percent from 3.75 percent. The corporate income tax rate will jump to 7 percent from 5.25 percent.

"It's been a long slog, but I'm relieved that we finally have a responsible balanced budget in place," said state Senator Don Harmon (D-Oak Park), who serves as president pro tempore of the Senate and chairman of the Senate's executive committee. "It's not the end of our work by any means, but it provides immediate stability to the state that it sorely needs."

In a rare vote on the 4th of July, the Senate barely met the three-fifths requirement to override a veto when 35 Democrats and one Republican, Dale Righter from Mattoon, voted 36 to 19 to override Rauner's veto. Two days later, the state House, with not a vote to spare, overrode the veto on a 71 to 42 vote with 10 Republicans crossing party lines while six Democrats, all from very competitive districts, voting to sustain Rauner's veto.

Harmon said getting some Republican support for the tax increase was a critical factor in finally ending the stalemate and passing a budget.

"Republicans in the General Assembly broke from Rauner," Harmon said. "They stopped doing his bidding and started doing what was best for their districts and what was best for the state. This was a difficult budget to negotiate; it required bipartisan contribution to the effort both in terms of the substance of the budget package as well as the votes for it."

After two years of standoff between Republican Rauner and the Democrat-controlled state legislature, the state Senate got the ball rolling in May by finally passing a budget and tax increase.

"I think the Senate deserves some credit for beginning this conversation at the end of last year in laying out a framework for a bipartisan agreement on a balanced budget," Harmon said. "The final package is very similar to the package that passed out of the Senate in May, so I'm pleased the work we did was not done in vain."

The budget calls for a 5 percent across-the-board cut in state spending with a 10 percent cut for higher education spending, amounting to about a $3 billion reduction in state spending in absolute terms.

But critics of the tax hike claimed that the budget contained no significant structural reforms.

One aspect of the budget deal will probably eventually result in additional spending by local school districts. The bill calls for the creation of a new option for a hybrid pension plan for state employees and public school teachers outside of Chicago that will include a 401(k) type portion that is estimated to save the state about $500 million.

It will take some time for such a plan to be developed, but when it is created, the state will pick up much less of the employer contribution to the Teachers Retirement System Pension Play than it currently does.

The new budget calls for an increase of $350 million in state aid to K-12 schools but that is on hold for now because of a law that made the dispersal of state aid to education contingent upon a separate bill to change the state formula.

In general, the bill would direct more state aid to poorer school districts while ensuring that no school district would receive less state aid than it currently does, both concepts that Rauner says he supports.

"We're waiting for some indication as to whether or not the governor is going to sign it," Harmon said of the hold up in presenting the bill to the governor. "He stated that he supports 90 percent of the bill, but still plans to veto it, which is a very odd position to take in government or in Springfield."

State aid payments to local school districts are supposed to go out to local school districts in August.

"This requirement that we adopt an evidence-based funding model before the school payments can be made didn't originate with us," Harmon said. "It was part of Governor Rauner's budget package."

If Rauner vetoes the bill, the General Assembly will try to override the veto Harmon said.

"I'm confident that, given hundreds of districts would do better, some of my Republican colleagues would support it," Harmon said.

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Brian Slowiak  

Posted: July 21st, 2017 2:45 AM

"Allow citizens to work off some of their tax burden b y performing work for the state" A person is an auto mechanic and owes state taxes. The person then reports to the State vehicle maintenance building and does brake jobs on State owned vehicles, takes no pay and pays down their tax debt by working off the debt.

Nick A Binotti  

Posted: July 20th, 2017 9:38 PM

Ruth - Teachers don't get social security because they don't pay into social security. If I didn't pay into social security, I would have an extra 6.2% to invest in an IRA, plus my salary would be 6.2% higher because my employer wouldn't have to match it. So let's not pretend teachers are missing out on some gold mine here. But as far as a progressive state income tax goes, what is that going to fix? Mercatus just came out with their 2017 ranking of states by fiscal condition. The only state ranked lower than Illinois was New Jersey, a state with PROGRESSIVE income tax rates (top rates are 5.5% - 9%!). Plus they tax retirement income. And with all that progressiveness, they still managed to accumulate $130 billion in pension debt and have high property taxes. So let's not pretend progressive rates are going to save the day here, because they're not. Some of the most financially healthy states in the USA have no state income tax. As Robert Tepper sang, "There's no easy way out."

Sasisa Samani  

Posted: July 20th, 2017 7:56 PM

23) Mandatory drug testing for anyone serving or seeking political office in Illinois.

Ruth Lazarus from Oak Park  

Posted: July 20th, 2017 7:06 PM

Thanks for the replies with concrete suggestions. Some I would agree seem reasonable, others not, but this seems much more productive than just trashing the new, much needed budget. I don't know about NYC in the 70s, but I'm uncomfortable with statements like "saving union pensions at the expense of all taxpayers", as well as all of the ideas here that pit one group of citizens against another. Union workers are also taxpayers. The group I know the most about, teachers, don't get social security, pensions are all they have. We didn't get into this mess only because of pensions and/or overspending,we've also had a financial crisis and aging population. I'm not against any cuts in spending, or taxes (especially property taxes!), but why not a progressive tax? We shouldn't have to make ridiculous choices between social services for the elderly or health benefits for state employees. The state has many responsibilities, and it's the inability to meet those responsibilities well that is driving people out of Illinois. And I'm not sure what was meant by asking citizens to "work off their tax burden?" What citizens? What tax burden are you talking about?

Bruce Kline  

Posted: July 17th, 2017 8:53 PM

(continued: response to Ruth): Now just because the State can not declare bankruptcy, it does not mean it can not default. I think there might be some lessons for Illinois from an entity that could declare bankruptcy ?" but did not ?" and was rescued successfully. I'm speaking specifically about NYC in the 1970s. The bottom line for the NYC bailout was that NYC lost some "sovereignty", banks and bondholders took huge "haircuts" as did the taxpayers and as did the unions! And that is my problem with Mr. Harmon and those who believe as he does: the sole focus seems to be on saving union pensions at the expense of all taxpayers. And his remedy is toxic to boot since it won't save the pensions. But it will lead to a tax death spiral. As NYC revitalization proved, everyone involved had to compromise ?" and everyone, literally, took a hit to save a great city. That spirit or strategy must guide us here in Illinois. If not, it won't matter. There won't be enough tax payers here in a generation or two to sustain this state. And finally it may take the unthinkable: amend the Illinois Constitution. You say a financial melt down can't happen here? Yeah, that's what they said about NYC 40 years ago and more recently about that once powerful manufacturing hub: Detroit.

Bruce Kline  

Posted: July 17th, 2017 8:46 PM

Ruth I apologize. I did not take your query seriously as I should have. I think it is the primary responsibility of our elected officials such as Sen. Harmon to offer detailed realistic solutions for our states' dilemma. Isn't that the job of a public servant such as Mr. Harmon? That's what he gets paid for, is it not? And in my opinion spending money you don't have, and continuing to tax, and not deal with the root issues is a recipe for disaster. But you ask what I propose. Well I will offer some general principles. First, recognize that even if workers in our public sector did not cause this crisis, and are mere innocent sideline observers to this unfolding crisis, the plain fact is, that the unfunded pension liability is virtually unsolvable via Mr. Harmon's remedy of tax and spend, and spend some more. In fact, the market value of unfunded pension liabilities for the State is almost $350 billion?Billion! (https://www.mercatus.org/system/files/norcross-fiscal-rankings-mercatus-il_v1.pdf) Now what the good Senator sees beyond these dismal numbers is that Illinois' tax burden is relatively modest when compared to other states ?" in fact better than 38 other states. So the solution is a Harmon/Madigan classic: increase taxes?but continue to spend. But with out addressing the enormous hole we are in, no amount of taxes is going to solve this disaster. Why? Because Mr. Harmon can not build a wall around Illinois to prevent egress of it citizens to more friendly climes. And in fact, Ruth, we are already seeing the results of Mr. Harmon's disastrous tax and spend policies: Illinois is the only State in the Union that is losing population. If this persists, the tax base shrinks, taxes must go up, then more people leave ? and the cycle repeats ? well it becomes a classic death spiral. And the pension burden rather than being solved becomes worse than ever.

Tom MacMillan from Oak Park  

Posted: July 17th, 2017 8:28 PM

19. No more grants for any studies or projects of any kind until crisis is over. 20. No more pensions for state workers, 401k plans similar to what taxpayers have from now on. 21. Elimination of half of the state senatorial positions - each senator can cover twice as much territory. 22. No hiring of anyone with a parent, sibling, cousin, aunt, etc already on the state payroll. If anyone is found to have broken the rule, they are fired and replaced.

Brian Slowiak  

Posted: July 17th, 2017 5:03 PM

14. a dress code for all elected officials to wear while a work or in session. A simple black sport coat with State cress. Sport coat no suit. Eliminates the need for expensive suits that can be worn on their part time jobs. !5. Allow citizens to work off some of their tax burden by performing work for the state.16. All seminars must be held in the State. Recent comptroller ( might have that wrong took, her staff for a seminar at the Wisconsin Dells) 17. Sell all unused furniture and equipment. 18. Then eliminate all unused storage and state owned property.

Brian Slowiak  

Posted: July 17th, 2017 4:42 PM

7 All unspent campaign money must go to charity or the State. 8. Elected officials must wait in line for paychecks just like outside service providers 9.a 1 percent decrease in pay and pension for every elected official who was on the job while this problem festered.10. Self limits on patronage hires 11. Make patronage hires honorary positions with no pay. I heard Lisa Madigan had a friend on the payroll working from her home in Michigan without even a computer hookup. 12, Every healthy person obtaining benefits must do some sort of community service work in their own neighborhood, Remember FDR and CCC.13. Forensic audits on all out going funds to determine who was issued funds and how those funds were spent. @ Binotti: Retirement funds were taxed when the funds were made. However if you wish, tax away but aolish the PGO, The federal pension group offset for Social Security. Before I became a police officer, I had 40 quarters, enough for a Social Security Benefit. I paid into SS while on and after the job. However as a retired police officer on pension my ss benefit will not be more than 26% pay out of what I would be getting if I didn't have a pension. If you wish tax my pension now, however restore my full SS benefit. Because my full SS benefit was promised me 1967.

Nick Polido  

Posted: July 17th, 2017 7:53 AM

Ruth, 1.) Term limits 2.) A restructuring of benefits for new employees (health, pension, lane, step, etc..) 3.) A tax on retirement benefits above a certain income level 4.) Restrict elected officials from enriching themselves at their law firms and other endeavors that receive state business. 5.) Take redistricting away from elected officials 6.) Limit money raised by politicians from individuals and businesses who benefit directly from state business Apparently you missed the last tax increase sold to us in order to give our leaders time to straighten our mess out.

Nick A Binotti  

Posted: July 16th, 2017 10:19 PM

Ruth - I'm pretty sure the state is going to take out another bond to pay the backlog of bills, because what's another $15B in loans when you already owe retirees nearly $200B for work was performed years ago? But to answer your original question, it is simply a matter of identifying priorities and distributing our existing finite resources based on those priorities. Is it MAP grants or raises for tenured professors? Great healthcare benefits for state employees or social services for the elderly? That's Harmon's / et al's job...to allocate limited resources responsibly. The state needs to realize not everyone will get the help they need, but if done properly, those resources will be effective. The state needs to learn to do a few things well instead of many things poorly. But you have a point that there is a small revenue problem in that retirement income is completely exempt from taxation. I would encourage you to visit retirees and local senior centers to order them to pay their fair share. Hit up frequent WJ contributor/broken record Mr. Al Popowits first as he's been dying to pay taxes for over 25 years now.

Ruth Lazarus from Oak Park  

Posted: July 16th, 2017 6:10 PM

I'm pretty sure insulting me is not responding reasonably to my question, but I'll persist, because I'm really interested in trying to understand your perspective. Or maybe I'm just trying to make the point that there are no actual ideas in any of these comments. I'm sure we disagree on whether Illinois has primarily a spending problem or a revenue problem. But since we agree on one thing, that filing for bankruptcy is not an option, I'm still waiting to hear your ideas on paying the 15 billion dollars that is owed for work that has already been done. What do you propose we do about that?

Brian Slowiak  

Posted: July 16th, 2017 3:32 PM

C

Bruce Kline  

Posted: July 16th, 2017 12:22 PM

First of all Ruth you just keep drinking that Kool Ade! The issue is quite simply that Mr. Harmon and his illustrious crew and enablers such as yourself have not even attempted to address the underlying root cause: uncontrolled spending in this state. And THAT is the issue. You can not continue to spend money you don't have. You can not continue policies that eventually drive out the tax base to other states - thereby ensuring your concerns will never ever be solved. And by the way, Illinois as a sovereign can not - under the US Constitution - file for bankruptcy. So cease and desist with that falsehood please. Continue your ludicrous rants Ruth ...in another few decades there will be no one here in Illinois to rant to.

Ruth Lazarus from Oak Park  

Posted: July 16th, 2017 10:19 AM

I'd love to hear some new ideas from some of you who are so critical of this budget. I so appreciate Senator Harmon and all of the legislators who voted for a budget that is at least a step in the right direction, if our goal is to have a state that functions at all. How would you propose paying off the 15 billion dollars of debt, payments that are owed for work that has already been done by doctors, therapists, and other vendors? Are all of you volunteers, or do you get paid for the work you do? Would all of you prefer that Illinois file for bankruptcy and just tell those people, "tough luck."? What would your solution be to save universities and social service agencies that have been devastated by the budget impasse? What are your ideas for ensuring that children with disabilities get health care and therapy, that those addicted to drugs or trying to leave a domestic violence situation, receive the support they need? Let's hear your ideas, or let's hear you admit that you really don't care about anyone except yourselves.

Brian Slowiak  

Posted: July 14th, 2017 1:00 PM

I dont mind and fully expect S.en. Harmon to spoon feed me horse dung. I mind when Sen. Harmon spoon feeds me horse dung and insists the horse dung is chocolate ice cream.

Tom MacMillan from Oak Park  

Posted: July 14th, 2017 9:59 AM

Creepy Madigan controlled Harmon adds insult to injury.

Ramona Lopez  

Posted: July 14th, 2017 1:15 AM

Here is a link to Mr. Harmons major contributors:https://www.illinoissunshine.org/committees/friends-of-don-harmon-16283/ As you can see, most are unions. So I think it is safe to say pensions will continue to crush Illinois residents if Mr. Harmon has his way.

Ramona Lopez  

Posted: July 14th, 2017 1:07 AM

This "new story" is laughable. Let's just take a look at how our wonderful progressive Democrats are milking us for every dime we make: 1. Increased our income take and it is going to be RETROACTIVE to January 1, 2017. Can't forget to stick it to us all year long now can they. Our reassessments in Oak Park have sent our taxes even higher despite Oak Park going condo crazy creating more tax revenue. We passed a referendum to give the grade schools even more money because of course, the sky is falling and the default knee jerk reaction is a referendum to raise taxes. Our minimum wage has now gone up. Soon Oak Park will be nothing but chain restaurants and businesses. Ino's on Roosevelt is up for sale...guess I would do if my property tax bill was #$%&@#!%^ $75,000 DOLLARS for a 1,000 sq foot building. Head east into Chicago where many of us work and we are hit with the bottled water tax, bag tax, soon to be sugar tax, red light camera at all major intersections that has now spread to Berwyn and Forest Park. This of course is all done to balance a budget that had absolutely NO structural reforms. So I have to ask as the citizenry of Oak Park must continue to make sacrifices for the greater good of the community, what are our "public servants" doing on our behalf? Silly question I know. Would never want to rattle Mr Harmon. Take a look at his campaign contributors: 11/14/2016 $50,000 from Health Care Council of Illinois. 9/30/2016 $10,000 Cottonwood Financial out of Irving, TX. 9/30/2016 $10,000 Teachers Union. 9/13/2016 $10,000 IVA PAC. 8/29/2016 $250,000 Realtors PAC WTF!!!! 7/29/2015 $5,000 AFSCME. Mr. Harmon has $725,000 in his war chest. Why on earth does he need that much money? Mr. Harmon has been bought and sold!!! Can't forget to add how much money his law firm makes off state contracts. In closing, I must say thank you Mr. Harmon for putting your self interests ahead of your constituents.

Bruce Kline  

Posted: July 13th, 2017 11:31 PM

Nick: In Don's delusional Alice in Wonderland world, where somehow Illinois has simultaneously a balanced budget but also one of the largest (if not largest) budget deficits in the nation ...well how does that happen? And as usual, the WJ's gullible reporters accept the fantasies - no questions asked.

Nick A Binotti  

Posted: July 13th, 2017 9:51 PM

None of our local govts have balanced budgets. Chicago and Cook County just released their financial statements for 2016 that were allegedly build on balanced budgets. The results? Chicago reported a $3.6 BILLION loss. Cook County reported a $800 MILLION loss. Both units are bleeding money with no end in sight. Nothing to see here, right, state senator Harmon?

Nick A Binotti  

Posted: July 13th, 2017 9:33 PM

Was this meant for The Onion, because the budget isn't balanced. They once again short-changed the pension systems. Also embedded within the mounds of legislation is a huge giveaway to Wall Street that lets bondholders stake first claim on assets in case of financial distress. Plus the state is skimming some local sales tax dollars as well. The school funding reform mentioned comes equipped with a time bomb that requires the state to contribute more to the CPS abyss that already receives far more than their fair share of education funding. Plus I like the fact there is still "work to do." Harmon and his crew have been pining for a 5% rate for 2 years now, and now 1 week into getting it, there's "still work to do." Massive fail.

James Peters from Oak Park  

Posted: July 13th, 2017 8:52 PM

Oh! There's the hidden gasoline tax, too.

Bruce Kline  

Posted: July 13th, 2017 7:27 PM

Jerry: the key to the Tribune comment is "addictive spending." Addiction is a tough nut to crack. Without intense therapeutic intervention, addictive behavior (to drugs, sex, spending etc) can not be cured. Don is a perfect tragic example whose pathologic addiction (to spending) unfortunately affects us all. And there is no cure in sight.

Jerry Sebesta  

Posted: July 13th, 2017 6:06 PM

Well said Nick ! Only Don " could be pleased : with a 32% tax increase that wasn't noted in the article. I would to add to Nick's comments with this quote from a Chicago Tribune editorial. " They (the Democrats) passed a massive hike without addressing their addictive spending is the root of the debt problem " Until Don and his fellow leadership addresses their spend, borrow and tax ways Illinois will continue in be a fiscal disaster.

Nick Polido  

Posted: July 13th, 2017 1:31 PM

The hard-hitting journalist from this paper really holds our politicians feet to the fire-"It's been a long slog, but I'm relieved that we finally have a responsible balanced budget in place," said state Senator Don Harmon (D-Oak Park). How does a reasonable person believe that by raising taxes and borrowing money to pay bills is responsible? The reporter than lets the Senator infer that this budget has some type of pension reform in it (which there in none). This paper never confronts our politician with the conflict of interest from their law firms who receive millions in State business. As people continue to flee this State our only hope is Term limits and to tear up our sacrosanct Illinois constitution that offers nothing for the tax payer but protects those who enrich themselves on the back of the people. Maybe this paper could finally speak up!

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