ABC 7 Chicago | Temporary tax increase not so temporary?

TUA President Jim Tobin was featured in a story from ABC 7 Chicago about Illinois’ “temporary” tax increase. To see the video, click on the image below, or go to the ABC 7 website here.
abc7temptaxSPRINGFIELD, Ill. (WLS) — Illinois lawmakers will apparently balance next year’s budget without the state’s temporary income tax increase.
The Illinois House is expected to vote Tuesday on the approximately $35 billion spending plan that could lead to layoffs and further delays in paying the state’s bills
When approved three years ago, taxpayer advocate Jim Tobin suspected there was nothing temporary about the 2011 Illinois income tax increase.
“They always say it will be a temporary tax but then they try to make it permanent,” Tobin said.
“We have some temporary tax increases that are designed to pay our bills . . . to get Illinois back on fiscal sound footing,” IL Gov. Pat Quinn said in January 2011.
To resolve a budget deficit that includes $8 billion in unpaid bills, the governor and General Assembly Democrats authorized increasing the state’s income tax rates for four years: the personal rate increased from three to five percent and the corporate rate went from 7.3 to 9.5 percent.
“This is to get us out of a very deep and unpleasant hole that we happen to find ourselves today,” Rep. Barbara Flynn Currie, (D) Hyde Park, said.
“All of the income tax surcharge, over $21 billion, has gone to the pensions, government employee pensions,” Tobin said.
The 2011 bill called for the tax rates to be rolled back in 2015 to 3.75 and 7.75, respectively. But Illinois still has a deficit and a $4 billion backlog. Governor Quinn wants the rates extended to avoid devastating cuts to public education spending.
“We cannot be slashing the education budget and hurting our teachers and our students,” Gov. Quinn said.
Despite the governor’s pleas, House Speaker Michael Madigan says he cannot find the votes to extend the rates and has warned state residents to brace themselves for cuts.
Meanwhile, Tobin said Madigan could revive the tax increase extension after the fall election.
“He will push/promote the income tax increase again after the November election if enough of his allies get elected,” Tobin said.
Republican candidate for governor Bruce Rauner is opposed to extending the income tax increase, so voters can expect the question to become an issue in the fall campaign.
The state will lose just under $2 billion beginning January 1 and during the second half of the next fiscal year.
Rauner has not said what his administration would cut to make up for the loss.

Wisconsin Reporter | DPI’s highest compensated employees get richer

TUA Executive Director Rae Ann McNeilly was quoted by the Wisconsin Reporter about the highest compensated public employees within the Wisconsin Department of Public Instruction.
dpiBy Ryan Ekvall | Wisconsin Reporter
MADISON, Wis. — The past two years have been good to high-level administrators in state Superintendent Tony Evers’ Department of Public Instruction.
More than half of the employees working in Evers’ office received bonuses in the past two years, while less than a quarter of all other DPI employees received bonus compensation, according to records obtained by Wisconsin Reporter through an open records request.
The state calls these pay raises discretionary merit, equity or retention compensation awards. It’s how government employers increase workers’ pay beyond the salary adjustment for all state employees, which is set by the Legislature.
Since June 2012, the department has handed out bonuses to 117 employees. The department employs 487 people, according to the staff directory. Four employees received two bonuses in the past two years.
In total, the department handed out $398,140 in permanent pay increases and $63,700 in one-time cash payments, records showed.
While most state employees received raises of 1 percent pay, it was best to be in Evers’ inner circle. Seven of 11 in Evers’ cabinet, who already make more in annual salary than 95 percent of Wisconsin workers, received an additional $30,230 in bonus compensation in the past two years.

  • Michael Thompson, deputy superintendent, received a $2.36-hourly raise in October 2013, bringing his salary to $125,735, from $120,807. Thompson now earns more than Evers, who makes $120,111 a year.
  • Carolyn Stanford Taylor, assistant state superintendent, received a $2.152-hourly raise to $114,475.
  • Lynette Russell, an assistant state superintendent, received a raise of $2 an hour to $115,258.
  • Sheila Briggs, assistant state superintendent, received a $2 an hour raise, bringing her salary to $115,258.
  • Kurt Kiefer, assistant state superintendent, received a $1.991 an hour raise to $115,258.
  • Brian Pahnke, assistant state superintendent, received a $2.152 an hour raise to $114,475.
  • John Johnson, a spokesman for the agency, received a $1.893 an hour raise to $94,906.

Several other employees in the Office of State Superintendent also received bonuses.

  • Jennifer Kammerud, a legislative liaison, received a $1 an hour raise to $73,658.
  • Karen Nowakowski, another Evers’ assistant, received a $1 an hour raise to $59,193.
  • Mary Jo Christiansen, an assistant to Evers, received a $1 an hour raise to $53,714.
  • Rebecca Hannah, another Evers’ assistant, received a $1 an hour raise to $50,488.

Click here to see the full data.
Technically, the department doesn’t grant bonuses, DPI told Wisconsin Reporter when it fulfilled the open records request, “but rather the ability to grant increases pursuant to the Compensation Plan.”
The Legislature sets the state employee Compensation Plan, which is then published by the Office of State Employment Relations.
Personnel evaluations, which are required for state agencies to award merit, equity or retention pay raises, are not subject to the public records law. The Office of State Employment Relations does not review the evaluations before approving compensation awards.
“We’re sucking up money from poor, rural farming communities and giving it to handpicked administrators on criteria that isn’t even articulated to the public,” said Rae Ann McNeilly, executive director of Taxpayers United of America, a government watchdog organization which works in Illinois and Wisconsin. “The money goes into this big money pot and the bureaucracy grows.”
According to the compensation plan, state agencies must develop procedures to grant discretionary merit compensation and equity and retention adjustments in compliance with OSER directives. OSER must approve these payments unless they delegate the authority to the state agency.
Stephanie Marquis, spokeswoman for the Department of Administration, said that while DPI has not been granted delegation authority, OSER has approved DPI’s plan to award merit, equity and retention awards. Merit awards, she said, are to recognize employees for outstanding performance. Equity and retention awards are to retain employees or get their pay equitable with counterparts.
“Taxpayers need to be aware of where their money is going,” McNeilly said. “The bureaucrats don’t want you to see it. This is the problem with removing local control in education. We are siphoning money away from taxpayers up to a bureaucracy and removing it from the students DPI purports to be collecting it on behalf of.”

CBS Chicago | Taxpayer Group: 11,000 State Retirees Get Six-Figure Pensions

TUA’s annual study of the top Illinois pensioners was featured on CBS Chicago WBBM Newsradio. To listen to the story, click on the player below.
[audio:|titles=Jim Tobin on WBBM Newsradio] CHICAGO (CBS) – A taxpayer group that monitors the state’s pension problems said there are more retired state workers than ever drawing pensions of more than $100,000 per year.
Taxpayers United of American said more than 11,000 people receive six-figure pensions from the state, and by 2020, that number will balloon to 25,000.
The anti-tax group’s annual report also said more than 78,000 state pensioners receive more than $50,000 a year.
TUA founder Jim Tobin said, at the rate things are going, Illinois will not be able to sustain payments in the long-run.
“These people are … contributing very small amounts into their million-dollar pension payouts, and expect us – the taxpayers – to work until we drop so they can retire in their 50s and live the Life of Riley on our dollars,” Tobin said. “It’s an obscene, immoral system.”
Tobin said the pension reforms approved by the Illinois General Assembly and the governor last year are not enough. He said state workers need to pay more into their pensions and their health care premiums.
The TUA report pointed out educator Larry K. Fleming, who retired at age 55, receives more than $258,000 a year in state pensions, and stands to collect more than $11 million in his projected lifetime.
“He paid a whopping $326,000, or 2.8 percent of his estimated lifetime payout,” Tobin said.