Illinois Poet Laureate Gwendolyn Brooks

I once had the pleasure of receiving an unexpected telephone call from Gwendolyn Brooks. She sponsored a yearly Chicago-area poetry contest and awarded 30 students $100 each. Ten students were chosen from three categories: Grades K-5, Grades 6-8, and High School. One particular year, she awarded seven of my students in her High School category. They were Rhonda Aburomi, Amy Hill, Vicki Martinka, Dan Sullivan, Anna Szymanski, Amanda Vittoe, and Brigid Walsh. She called me in June 1992 to invite my students and me to the University of Illinois Chicago campus awards ceremony. She asked me to address the audience about teaching high school students the art of writing poetry. It was a pleasure... Gwendolyn Brooks was an inspiration to thousands of burgeoning poets. Gwendolyn Brooks was born on June 7, 1917; she died on December 3, 2000.

We Real Cool by Gwendolyn Brooks

We real cool. We
Left school. We

Lurk late. We
Strike straight. We

Sing sin. We
Thin gin. We
 
Jazz June. We
Die soon.


 Gwendolyn Brooks Bio

To Gwendolyn Brooks, with tongue-in-cheek:

We Real Old by Glen Brown

We real old. We
Gray fools. We

Slow pee. We
Drive slow. We

Lose teeth. We
Sway feet. We

Mash meds. We
Nap heads.

What is more important than the hoopla over Illinois’ recent downgrade (Part 3)? How about legal and moral solutions?

Breaking a constitutional contract with public employees will not solve the revenue and pension debt problems in Illinois.

Solutions:

·         The current “Pension Ramp” does not work for the five public pension systems. The “Ramp” entails larger payments today as a result of the 1995 funding law – Public Act 88-0593 – to pay the pensions systems what the state owes. The pension debt needs to be amortized for a longer frame of time (a flat payment) “just like a home loan that is amortized.” Though the initial payment will be greater in the beginning, over the long term it will become a reduced cost and a smaller percentage of the overall Illinois budget as it is paid off throughout the years;

·         Make the 2011 income tax hike permanent. Designate the additional 2% in income taxes (approx. $7 billion per year) solely for paying down the unfunded liability… Secure enough funding through sale of pension bonds to erase the entire unfunded liability at a suitable rate ($100 billion at 6.5%). This will turn “soft” debt into hard debt and a guaranteed payment for (let’s say) 25 years in an amortized and consistent method to pay back bondholders… Bond companies will now have a commitment to timetables and repayments they do not have currently from Illinois. They may also be willing to assist in this re-amortization of expenses. The annual payment will be known and unchanging as the state moves forward. The economy in Illinois (5th highest GDP in all 50 states) will gear up, and there will be a lessening of expense and a growth in revenue. There will be no constitutional fight, and public sector employees’ contributions and good works would be honored…;

·         Raise revenue through a graduated-rate structure to pay the state’s debts. With a constitutional amendment, “given an appropriately designed graduated-rate structure, Illinois could cut the overall state income tax burden for 94 percent of all taxpayers—on average providing a tax cut to every taxpayer with less than $150,000 in base income annually, raise at least $2.4 billion more in revenue, and keep the effective individual income tax rate for millionaires well below five percent… Illinois taxpayers with the bottom 94 percent of base income collectively would receive an annual tax cut of $1.06 billion… [T]he combined effect of this policy would be a stimulus to the economy from tax cuts and additional state spending (assuming that the additional revenue is used to fund current public services that would otherwise not be funded) that would create at least 36,000 private sector jobs in communities across Illinois…” (Executive Director Ralph Martire, Center for Tax and Budget Accountability, CTBA);

·         Tax services. Broaden the sales tax base to include selected consumer services. Illinois is one of five states with sales taxes on fewer than 20 services (The Center on Budget and Policy Priorities);

·         Eliminate the tax loophole for “Tax Increment Financing Districts”;

·         Eliminate “Edge Tax Credits” (The Illinois EDGE program is administered by the Illinois Department of Commerce and Economic Opportunity (DCEO). A Business Investment Committee of the Illinois Economic Development Board (IEDB) makes recommendations regarding the types of projects that may seek this tax credit);

·         Increase taxation on the wealthy: Illinois is in the top 10 of regressive state tax systems where the wealthiest taxpayers do not pay as much of their incomes in taxes as the poorest and middle-income wage earners (The Institute on Taxation and Economic Policy);

·         Implement a more timely system of payments (cash management practices are greatly affected by budgetary practices in relation to deferred liabilities which place additional pressures particularly in the first and second quarters of the year to pay those expenses; timing of tax payments also affects the state's cash flow and should be adjusted accordingly);

·         Create a Speculation Sales Tax: a $1 per transaction on contracts traded on Chicago derivative exchanges (Dr. William Barclay);

·         Establish term limits for Illinois legislators.

Read the two previous posts for more solutions.

What is more important than the hoopla over Illinois’ recent downgrade (Part 2)? How about eliminating tax loopholes for corporations?

[Breaking a constitutional contract with public employees will not solve the revenue and pension debt problems in Illinois].

Eliminate Tax Loopholes to Increase State Revenue.

Taxes on corporations make up only 5.5% of General Revenue in Illinois. By contrast, individual taxpayers are on the hook for about 53% (2011 Comptroller’s Report, Judy Baar Topinka). Loopholes are a big part of the disparity, and HB 390 eliminates three unnecessary and wasteful expenditures. There are additional 1.5 billion in tax breaks that aren’t included in HB 390.

Consider this list of other corporate tax breaks in Illinois:

Traded In-Property Sales Tax Exemption: 309m;

Biofuels Subsidies: 234m;
Manufacturing and Assembling Machinery Exemption: 184m;
Sales Tax Retailers’ Discount: 116m;
Enterprise, Foreign Trade and Special Zone Incentives: 91m;
CME-CBOE Special Tax Break: 85m;
Offshore Oil Drilling Tax Incentive: 75m;
Satellite TV Tax Exemptions: 75m;
Extended Estate Tax Exemption Increase: 64m;
Farm Chemical Exemption: 50m;
Non-Sales Tax Collection Discounts: 47m;
Manufacturer’s Purchase Credit: 38m;
Newsprint and Ink Exemption: 33m;
Rolling Stock Exemption: 25m;
Individual Income Tax Credit and Subtractions: 21 m;
For-Profit Hospital Tax Credit: 15m;
Research and Development Credit: 13m;
Film Production Services Credit: 12m;
Digital Goods Exemption: 10m;
Graphic Arts Machinery and Equipment Exemption: 8.3m;
High Economic Impact Business Investment Credit: 4.3m;
Purchase of Electricity from Solid Waste Energy Credit: 2.2m;
Job Training Contribution Subtraction: 0.5m…

Across the state, Illinois voters want their elected officials to close corporate loopholes: by a 19 point margin, voters statewide believe taxes on big corporations are too low. Voters in South Suburban Chicago districts agree by a 17-point margin. Voters in North Suburban Chicago districts agree by a 14-point margin. Voters in Downstate districts agree by a 17-point margin. Voters in Central Illinois districts agree by an 18-point margin.

In addition, 72% of Illinois voters say “politicians have been giving big handouts to big corporations” (GSB Strategies Survey of Illinois Voters, November 2012).

Most importantly, studies have shown that closing these loopholes will not “hurt business” or “drive jobs out of Illinois.” In the 10-year period from 2001 to 2011, 10 of 15 states with corporate income taxes that had the best record of retaining manufacturing employment required combined reporting. Among these states are Illinois neighbors Michigan, Wisconsin and Indiana (Michael Mazerov, Center on Budget and Policy Priorities, Testimony before MD Senate Budget Taxation Committee, Feb. 22, 2012).

Neighboring states Wisconsin, Michigan and Indiana have also de-coupled from the Federal Domestic Activities Production Credit and have not witnessed negative economic effects. Corporate taxes represent an average of only 0.2 to 0.4% out of a corporation’s total expenses, hardly ever enough to justify the expenses and logistics of relocation or pulling a business out of a state (“Cutting State Corporate Income Taxes Unlikely to Create Many Jobs”, Center on Budget and Policy Priorities, September 14, 2012).

Corporate entities are far more interested in settling in states with educated workforces, solid infrastructure and public services, which requires significant public investment. Corporations’ investment decisions are driven by demands for their products and services, not by the need for more tax breaks (“Options for Responding to Short-Term Economic Weakness”, CBO, January 2008, pp. 13-14).


The aforementioned information is from IFT/AFT.

What is more important than the hoopla over Illinois’ recent downgrade?

It has nothing to do with a legislative failure to break a constitutional contract with the state’s public employees. If there is a need for any reform, it should be the “credit ratings process” at the federal level.

“Earlier this year, the Justice Department filed a $5 billion lawsuit against Standard & Poor's -- one of the nation's Big Three credit rating agencies, which also include Moody's and Fitch. The lawsuit accuses S&P of knowingly giving AAA ratings to financial products the agency's analysts understood to be unworthy.

“Handing out sparkling ratings to deeply flawed securities represents a serious breach of trust on the part of a credit rating agency. But it was common practice for the Big Three. And in no small way, this practice enabled the financial meltdown of 2008.

“Under the current so-called ‘issuer pays’ model, agencies are paid by the Wall Street firms whose products they are rating. The agencies thus have a financial motive to satisfy issuers with a high rating: If an agency declines to give a particular product its seal of approval, the issuer can simply take its business -- and its fees -- elsewhere.

“In the lead-up to the financial crisis, the Big Three gave out AAA ratings to subprime mortgage-backed securities. The securities, of course, turned out to be toxic, but the agencies were paid anyway.

“What's worse, when Wall Street ran out of questionable mortgages to securitize, it created a whole new market based on bets on those securities, bets called ‘derivatives.’ The Big Three kept on handing out AAA ratings to these complicated new products, and were again paid handsomely to do so.

“The rating agencies made hundreds of millions of dollars, but in the end, it was American taxpayers who paid the price -- losing their savings, their homes and their jobs in addition to having to pay billions to bail out banks.

“In the wake of that catastrophe, there is bipartisan agreement that the credit ratings process needs serious reform. That is why we worked together on an amendment to the Dodd-Frank financial reform law -- and why the Franken-Wicker provision passed with bipartisan support…”


SEC must ride herd on credit rating agencies by Al Franken and Roger Wicker

Thank You, Illinois Representatives, for Voting “No” on HB 1154, 1165 and 1166

Thank You, Illinois Representatives, for not Breaking a Constitutional Contract with Public Employees:

Mike Bost (R) Carbondale, 618-457-5787

Dan Brady (R) Normal, 309-662-1100

Rich Brauer (R) Springfield, 217-782-0053

Adam Brown (R) Champaign, 217-607-5104

Jerry Costello (D) Red Bud, 618-282-7284

Norine Hammond (R) Macomb, 309-836-2707

Chad Hays (R) Danville, 217-477-0104

Naomi Jakobsson (D) Champaign, 217-373-5000

Bill Mitchell (R) Decatur, 217-876-1968

Donald Moffitt (R) Galesburg, 309-343-8000

Brandon Phelps (D) Harrisburg, 618-253-4189

Raymond Poe (R) Springfield, 217-782-0044

Wayne Rosenthal (R) Litchfield, 217-324-5200

Sue Scherer (D) Decatur, 217-877-9636

Mike Smiddy (D) Port Byron, 309-848-9098

We are tired of injustice, but we will be resolute when voting these Illinois politicians out of office

What do Pamela Althoff, Dan Biss, William Brady, Michael Connelly, John Cullerton, Kirk Dillard, Don Harmon, Darin LaHood, Steven Landek, Matt Murphy, Jim Oberweis, Christine Radogno, Sue Rezin, Steve Stadelman, Heather Steans, Dave Syverson have in common? They voted “Yes” for the recent Senate Bill 1. What do these 16 politicians have in common with the likes of Joseph Weil, P.T. Barnum, Victor Lustig, Charles-Maurice de Talleyrand-Périgord, Joseph Fouché, Marie-Antoinette and Louis XIV? They are opportunists without concern for any ethical fairness.

And what do Edward Acevedo, Luis Arroyo, Patricia Bellock, Maria Antonia Berrios, John Bradley, Daniel Burke, Kelly Burke, Katherine Cloonen, Deborah Conroy, Fred Crespo, Tom Cross, Barbara Flynn Currie, John D’Amico, Monique Davis, William Davis, Tom Demmer, Jim Durkin, Keith Farnham, Sara Feigenholtz, Jack Franks, Robyn Gabel, Jehan Gordon-Booth, Brad Halbrook, David Harris, Greg Harris, Kay Hatcher, Elizabeth Hernandez, Frances Hurley,  Jeanne Ives, Charles Jefferson, Thaddeus Jones, Dwight Kay, Stephanie Kifowit, Renee Kosel, David Leitch, Michael Madigan, Natalie Manley, Robert Martwick, Emily McAsey, David McSweeney, Deborah Mell, Christian Mitchell, Thomas Morrison, Martin Moylan, Michelle Mussman, Elaine Nekritz, JoAnn Osmond, Pam Roth, Jim Sacia, Ron Sandack, Timothy Schmitz, Darlene Senger, Carol Sente, Joe Sosnowski (but had two excused absences), Cynthia Soto, Ed Sullivan, Silvana Tabares, Jil Tracy, Barbara Wheeler, Kathleen Willis, Sam Yingling, and Michael Zalewski have in common?  They voted “Yes” for House Bills 1154 (a pensionable salary cap, March 14), 1165 (a delay and diminishment of COLAs, March 21) and 1166 (an incremental increase in retirement age, March 14). What do these 62 politicians have in common with the likes of Joseph Weil, P.T. Barnum, Victor Lustig, Charles-Maurice de Talleyrand-Périgord, Joseph Fouché, Marie-Antoinette and Louis XIV? They are opportunists without concern for any ethical fairness.

Commentary

We are tired of members of the Illinois General Assembly who lack ethical responsibility and moral courage and are willing to challenge the State and U.S. Constitutions. These so-called aforementioned senators and representatives are ordinary liars and thieves!

We are also tired of incompetent, skewed coverage regarding the Illinois public pensions’ unfunded liability. We are tired of hearing about downgrades from bond agencies that ironically led us into the previous Great Recession and from liars and thieves who blame the public pensions for the state’s self-imposed and corrupt fiscal morass.

And we are tired of the media’s omission of the most significant facts about public pension debt and anyone who talks or writes about cuts to services and the siphoning of the state’s money from education, public safety and human services because of “failed pension reform.” These so-called pundits are deviants!

Every article, every interview, and every legislative session about Illinois public pension reform should begin with the following statements: The public pension systems were not and are still not the causes of the state’s budget deficits. The state’s budget deficits were triggered by past policymakers’ corruption, arrogance and irresponsibility and are perpetuated by some members of the current 98th General Assembly. The state's pension debt and revenue problems need to be resolved! Breaking a constitutionally-guaranteed contract (pension reform) is the wrong solution. It is also morally and legally unwarranted. 

Who is consistently and unequivocally reporting and discussing (besides a few bloggers) that the state’s public services have been paid primarily by money stolen from the state’s public pension funds for decades; that payments, meant for the public pension systems, were stolen from the public employees’ pension plans and that public employees have financed health care programs, education, public safety, park districts, and street repairs… for 60 years? 

Who is correctly reporting and discussing (besides a few bloggers and one Illinois TRS trustee) that past Illinois legislators had stolen approximately $30 billion intended for the five public pension systems?

Who is justly reporting and discussing (besides a few bloggers and legislators and one prominent lawyer) that it was past Illinois policymakers who were responsible for nearly one-half of the public pension systems' unfunded liabilities?

Who is exactly reporting and discussing (besides the Center for Tax and Budget Accountability and a few bloggers) that the service or pension debt needs to be re-amortized with a level payment just like a home mortgage?

Who is undeniably reporting and discussing (besides a few bloggers and online newspapers) that current policymakers have provided extortive tax breaks for the wealthiest corporations in Illinois, such as Boeing; Caterpillar; Sears Holdings Corporation; and CME Group Inc., parent company of the Chicago Mercantile Exchange and Chicago Board of Trade… and they will do it again?

And who is accurately reporting (besides the Center on Budget and Policy Priorities and a few bloggers) that “Illinois is an extreme example of the implications of a failure to fix [its revenue] problems; [that] it has a flat, low-rate income tax that does not adequately capture income growth; [that its] income-tax revenues routinely lag behind economic growth, [and it] relies heavily on a state and local sales tax that is almost exclusively applied to goods and excludes almost all other services? [...]

“[Furthermore,] because Illinois is chronically short of the revenues it needs to cover its expenses, it has engaged in a number of poor fiscal practices over the years. [Illinois General Assemblies] have postponed payments to vendors, failed to make adequate pension contributions or borrowed money to make [partial] contributions, securitized or sold assets, and taken other dubious actions [most recently with pension reform for 'opportunistic and political' purposes]. As a result, [Illinois policymakers] have had a particularly difficult time coping with revenue declines... and [they] have developed a large overhang of longer-term debt and unfunded liabilities…

“The root cause of Illinois’ problem is a revenue system in urgent need of modernization, one that cannot support the level of expenditures [and debt] that state [legislators must confront]...  If [these legislators] fail to reduce [the state’s] structural deficits and improve budget processes, it will be more difficult for [the state] to maintain needed services and to prepare for the next cyclical downturn by accumulating adequate reserves. Nor will [the State of Illinois] have the funds to fix the problems that have been identified in the funding of public pensions and other essential areas [despite some political opportunists' claims that ‘pension reform’, or breaking a constitutionally-guaranteed contract with public employees, is the resolution for the state's self-imposed fiscal mess].”

Besides the Center on Budget and Policy Priorities, Illinois revenue restructuring is also recommended by the Institute on Taxation and Economic Policy, the National Council of State Legislatures, the Economic Policy Institute, the Center for Policy and Economic Research, the National Association of State Retirement Administrators, the National Institute on Retirement, the Chicago Metropolitan Agency for Planning, United for a Fair Economy, and the Center for Tax and Budget Accountability.  

None of these institutes and groups advocates breaking a constitutionally-guaranteed contract with public employees as a solution for the state’s pension debt and revenue problems, only self-interested politicians among the Illinois General Assembly and the ravenous corporatists among the Civic Committee of the Commercial Club of Chicago, the Civic Federation, the Illinois Policy Institute, the Chicago Tribune, and a few other avaricious and unethical organizations do.

Finally, take note of these 19 representatives who voted “Yes” on two of the three abovementioned House Bills: Scott Drury, Jim Dunkin, Marcus Evans, Laura Fine, Mary Flowers, La Shawn Ford, Jay Hoffman, Eddie Lee Jackson, Camille Lilly, Sandra Pihos, Robert Pritchard, Al Riley, Robert Rita, Elgie Sims, Keith Sommer, Arthur Turner, Michael Unes, Lawrence Walsh and Ann Williams; these 22 representatives voted “Yes” on one of the three abovementioned House Bills: Daniel Beiser, John Cabello, Kelly Cassidy, John Cavaletto, Linda Chapa LaVia, C. D. Davidsmeyer, Anthony DeLuca, Mike Fortner, Esther Golar, Josh Harms, Lou Lang, Frank Mautino, Rita Mayfield, Michael McAuliffe, Charles Meier, Dennis Reboletti, David Reis, Derrick Smith, Andre Thapedi, Michael Tryon, Patrick Verschoore and Emanuel Welch.

Of Liars and Thieves:

There is no other way to define or call what some of these politicians are doing to public employees. The facts are clear and available. Many of them have chosen to ignore the legal and moral solutions for the state's budget problems. Billions of dollars were stolen from the public pension systems. Many of them are defying their oath of office; many of them are acting unethically and illegally.

-Glen Brown

Thank You, Illinois Senators, for Voting “No” on Senate Bill 1

Thank You, Illinois Senators, for not Breaking a Constitutional Contract with Public Employees:


Jason Barickman (R) Bloomington, 309-661-2788*

Jennifer Bertino-Tarrant (D) Plainfield, 815-254-4211

Tim Bivins (R) Dixon, 815-284-0045*

Melinda Bush (D) Grayslake, 847-548-5631

James Clayborne (D) East St. Louis, 618-875-1212

Jacqueline Collins (D) Chicago, 773-224-2830

Thomas Cullerton (D) Villa Park, 630-903-6662

Bill Cunningham (D) Chicago, 773-445-8128

William Delgado (D) Chicago, 773-292-0202

Gary Forby (D) Benton, 618-439-2504

Michael Frerichs (D) Champaign, 217-355-5252

William Haine (D) Alton, 618-465-4764

Napoleon Harris (D) Harvey, 708-893-0552**

Michael Hastings (D) Matteson, 708-283-4125

Linda Holmes (D) Aurora, 630-801-8985

Mattie Hunter (D) Chicago, 312-949-1908

Toi Hutchinson (D) Chicago Heights, 708-756-0882

Mike Jacobs (D) Moline, 309-797-0001

Emil Jones (D) Chicago, 773-995-7748

David Koehler (D) Peoria, 309-677-0120

Dan Kotowski (D) Park Ridge, 847-656-5416

Kimberly Lightford (D) Westchester, 708-343-7444

Terry Link (D) Gurnee, 847-821-1811

David Luechtefeld (R) Okawville, 618-243-9014*

Andy Manar (D) Staunton, 618-635-2583

Iris Martinez (D) Chicago, 773-463-0720

William Sam McCann (R) Jacksonville, 217-245-0050

Kyle McCarter (R) Vandalia, 618-283-3000**

Karen McConnaughay (R) South Elgin, 847-214-8245*

Pat McGuire (D) Crest Hill, 815-207-4445

Julie Morrison (D) Deerfield, 847-945-5200

John Mulroe (D) Chicago, 773-763-3810

Antonio Munoz (D) Chicago, 773-869-9050

Michael Noland (D) Elgin, 847-214-8864

Kwame Raoul (D) Chicago, 773-363-1996

Dale Righter (R) Mattoon, 217-235-6033*

Chapin Rose (R) Champaign, 217-607-1853

Martin Sandoval (D) Cicero, 708-656-2002

Ira Silverstein (D) Chicago, 773-743-5015

John Sullivan (D) Quincy, 217-222-2295

Donne Trotter (D) Chicago, 773-933-7715

Patricia Van Pelt (D) Chicago, 312-888-9191


*Also voted "No" on SB 2404
**Did not vote on SB 2404

Dan Duffy did not vote on SB 1; he voted "No" on SB 2404