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Municipal alliances not always advantageous for taxpayers

According to a recent article  in the Rockford Register Star, Rockford is joining with fellow industrial cities, Peoria, Aurora and Danville to form an alliance to lobby state legislators for solutions to common urban problems in the areas of education, poverty, and crime.

Peoria Mayor Jim Ardis believes there is power in numbers and more could be accomplished with a group of municipalities lobbying Springfield legislators. The coalition could eventually include 10 to 12 cities representing over a million people.

However, these cities are also members of the Illinois Municipal League, which successively lobbied against a bill in Springfield last year that would have prevented property taxes from increasing, while property values are declining. The bill would have benefited taxpayers but would have reduced municipal revenue.

Municipal officials usually represent their self-interests, not those of their constituent taxpayers, when it comes to increasing their revenue and other legislative issues, such as home rule or appointed school boards, one of the first issues mentioned by the Peoria mayor.

Excerpt:

“(Mayor) Ardis said Peoria, which has five school districts throughout the city, has had problems attracting quality school board members (usually community members who don’t want to face public scrutiny in an election).”

 

“He’s hoping to pursue legislation that would allow for mayoral appointments of school board members with City Council approval. A similar idea was pitched in Rockford in 2008, but never gained traction.”

Mayor Larry Morrissey stated at the time that truancy, high drop-out rates and low graduation rates stunt economic growth and drive crime rates. If the mayor was going to be held accountable by city voters, then he wanted some control of the process through school board appointments.

The “quality” of school board members might then become the degree to which they vote for the municipal leaders’ positions to whom they would now owe allegiance, versus the positions held by the taxpayers, who would be effectively excluded from the elective process!

As Chuck Sweeny once opined in his column, public officials could do what the teacher’s associations have done for years, and that’s recruit the candidates they want on the board with prerequisite business or educational experience and back their campaigns with cash and volunteers.

The City of Rockford collects at least 23% of the local property taxes and the Rockford School District in excess of 52% – a combination that would control three out of every four of our property tax dollars – a lot of power for a small group of municipal officials responsible for school board appointments.

Do you think a school board, appointed by the mayor and other local officials would have ever appealed the People Who Care lawsuit to the United States Appellate Court, Seventh Circuit to obtain Unitary Status, thus saving Rockford taxpayers $20M annually?

Another goal of the municipal league has been to support increases in state revenue, hoping to share in the higher taxes. One Republican state representative even told me his constituents were the municipalities, not the taxpayers, not the people who elected him!

The General Assembly has a constitutional amendment legislators are currently debating – HJRCA33 – the “Fair Tax Amendment,” a graduated income tax, which increases taxes for every Illinois wage earner making over $18,000 after deductions.

The state just increased their take $6 – $7B by increasing the state income tax rate by 67%. This new state revenue might help alleviate municipalities from additional unfunded state mandates, such as a portion of the state pensions.

Now a warning to those who are currently retired – Illinois Senate President John Cullerton has already suggested that the state should limit the  “generous” retirement income tax break for IRAs, 401Ks, corporate retirement benefits and Social Security income because it “would be a matter of fairness” to tax retirement income in addition to earned income.

With the General Assembly Senate and House leaders on the prowl for more tax revenue and control and municipal alliances seeking similar solutions, the municipal alliances will not be advantageous for Illinois taxpayers.

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5 Comments

  1. Ogle County

    Ted, do you know if there is actually a bill proposing the elimination of the retirement income exemption?

    • Ted Biondo

      Not yet, Ogle County, but it’s on the front burner. Azguy, Retirement income should be treated differently. 70 and 80 year old people have paid for all this government crap for at least 50 years. There ought to be a cap on what you have to pay for this garbage. It’s money that’s been saved for decades and will be mostly used for medical purposes or in the end for the Home. But we do vote, you are right about that. If more people did, we could all have cheaper taxes, right?

  2. No state income tax on pensions? Now there’s some social engineering that you can get behind. Really, is there any reason that pension income should be treated differently than earned income except that seniors are the most reliable voting bloc and they oppose it?

  3. Money that’s been saved for decades in a 401k or in a savings account is taxable. A pension is deferred pay that has not been taxed. And now you’re playing the sympathy card to justify this entitlement? I thought that was a tool only liberals used. How about the 55 yr old drawing a fat pension. Doesn’t he/she still use state roads, state police, state fire personnel and all the other state services that have to be paid for? In Az retirement income is taxable but in reality if you are only receiving social security and a modest pension you will end up owing very little, if any, state tax.
    As to your point, if everyone voted to pay less or no taxes it would all be sunshine and loolipops. Oh except for no Army or hiighways or board members and everything else we want government to provide.

  4. To be more precise the interest earned on a savings account is taxable.

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