Lunch with Ralph Martire. He served a plate of fiscal sanity.

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Ralph Martire on the right. Photo credit: Gerald Berkowitz

There was a packed house at the North Lake Shore Illinois Retired Teachers Association luncheon at the Elks Club in Des Plaines yesterday.

I guess you could say we retired teachers are a bunch of budget geeks because Ralph Martire of the Center for Budget and Tax Accountability is our rock star. If you invite him to speak to our organization, he will sell out the joint. Which he did yesterday.

To those who think retired teachers only care about our pensions, the concern we have for the people – and the neediest people – in the entire state of Illinois was demonstrated by the rapt attention Ralph was given as he painted – with powerpoint slides and clear explanation – a sad picture of the state’s fiscal governance.

Ralph’s mantra has always been that Illinois’ budget problems cannot be solved by cuts. We are among the lowest taxing and lowest spending on the needs of the people of any state. The solution is in raising revenue. With Bruce Rauner as governor Martire does not believe it can be done by a constitutional change in the flat tax. He does believe it might be be done by an increase in the income tax, a tax on services and a phased-in tax on retirement income with those whose retirement income is highest paying the most.

While the anti-tax crowd said that the expiration of the temporary 5%  income tax would trickle down to working families, Ralph showed how it has done just the opposite:

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If you look closely at the cells in the slide, Ralph shows how those in Illinois who earn over a million dollars a year saved more in taxes than those in the lowest earning group earn in a year as total income.

Ralph hit particularly hard on the wage gap between whites and people of color in Illinois.

He demonstrated how spending on K-12 education is a primary driver of income equality and how Illinois’s low spending on K-12 combined with its reliance on local property taxes to fund schools has been a disaster for people of color. Ralph declared our tax policy an example of structural racism.

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As for the claim that moving Illinois from the bottom tier of taxing and spending states would drive people out of the state?

Ralph Martire said, “The data just doesn’t support that position.”

12 thoughts on “Lunch with Ralph Martire. He served a plate of fiscal sanity.

  1. Fred,
    So how thick are you? Illinois is not a low tax state, income tax rate is low but please take into account and talk about the total tax burden on the citizens of this state. Sales, income and of course real estate. We are among the highest, not lowest.
    As for leaving the state, its companies as well as people. Hoe do you counts the companies that do not come?

    • Your views are based on fantasy. While local property taxes are higher than other states, the combination of all taxes still places Illinois near the bottom. I know. Facts are difficult things for you.

  2. Every time discussions in Springfield approach the subject of raising revenue to pay for services the state provides, the “Taxes are already too high in Illinois” crowd comes out of the woodwork.

    They are always anonymous. The interests of corporations and the wealthy seem to be the biggest concern of these people. I sometimes wonder if they are just shills for these interests, or if they just ignore the fact that these groups pay little now and just want to keep it that way. These groups are often found somewhere behind the false claim that “Illinois taxes are too high!”.

    Even the Governor agrees that taxes need to be increased, and Mr. Rauner is not what I would call a “tax and spend” liberal. Perhaps a more accurate assessment of the feelings of these anonymous commenters is “I didn’t pay enough back then and I don’t want to pay anything now”.

    I guess they want stiff state employees of their already earned compensation and to continue receiving services while not paying the true cost. They don’t seem to mind that a lot of what they want to continue to receive without raising taxes is paid for out of money already earned and owed to others.

    It would be interesting to hear what these “No Taxes!” people consider a reasonable tax rate to be. You never seem to hear anything about that. Or how they would feel if state services were paid for by raiding their 401K plans . No one ever seems to point out how most corporations in Illinois pay no tax at all. Or that some just keep the state tax withholding of their employees.

    These anonymous complainers just want to rant about taxes and shift the freeloader label (that they themselves might well deserve) to those less fortunate, who actually need the state’s help. It might even explain why even during the so called “budget crisis” the connected get paid while the needy and helpless suffer.

    • Martire told me at his Sept. 15th presentation that he would need $10 million to run for the governor’s office. Do you remember the IEA wasted $20 million on two losing candidates, one republican and one democrat?

      • Ralph Martire could NEVER be elected governor of Illinois! He is WAY too intelligent, and his ideas make way too much since!! Let’s not forget that the people of Illinois like to elect corrupt politicians and rich greedy ugly men like Rauner. They ALWAYS vote against their best interests!! No, I’m afraid Ralph Martire makes too much since to win an election in Illinois!!

  3. “A Common Sense Solution for Illinois’ Fiscal Solvency” (from the Center for Tax and Budget Accountability)

    “…Despite being one of the wealthiest, most populous states in the nation, Illinois continually struggles to fund the core services of education, healthcare, human services, and public safety. This severely impacts the most vulnerable populations in the state, such as individuals suffering from mental illness, those with disabilities, the elderly, and all students in the state’s public, K-12 Education system.

    “The root cause of all the problems is the state’s poorly designed and antiquated tax policy, which is so flawed it has generated structural deficits in the General Fund that have persisted for over 25years. The reforms outlined in this paper effectively eliminate the state’s structural deficit, and generate the fiscal capacity Illinois needs to satisfy the state’s demographically driven demand for core services…

    “Resolving Illinois’ longstanding fiscal shortcoming requires both revenue policy reform and pension debt re-amortization: over spending on current services is not the problem.

    “…Illinois is a low spending state that has been reducing spending on services over time… [A] flawed tax policy is the driver of Illinois’ recurring budget crises… The only sustainable path to eliminating this structural deficit without imposing significant additional cuts to those four, core services [education, healthcare, social services, and public safety] involves: (i) modernizing Illinois tax policy to generate adequate recurring, sustainable tax revenue; and (ii) re-amortizing the debt Illinois owes to its five pension systems…

    “Reform state income tax policy by (i) increasing the personal income tax rate from 3.75 percent to 4.75 percent or 5 percent, including some retirement income in the personal income tax base [and] increasing the corporate income tax rate from 5.25 percent to 6 percent; (ii) eliminate those corporate tax expenditures which are not generating a public good; (iii) reform sales tax policy by expanding the base of sales tax to include most consumer services; and (iv) impose a tax on sugary sweetened beverages…

    “To modernize its sales tax and generate revenue in a stable fashion that comports to modern consumption and economic patterns, decision makers should expand the base of the Illinois sales tax to include consumer services…

    “If the state were to reform its tax policy as suggested previously in this Report, but failed to address the current repayment schedule for its pension debt, Illinois would continue to experience fiscal problems.

    “While modernizing Illinois’ flawed tax system represents the first and most crucial step needed to resolve the state’s fiscal issues, to eliminate the entire structural deficit, one more reform is needed: re-amortizing the debt owed to the state’s five pension systems…

    “Given that benefits cannot be cut constitutionally, the only viable option for resolving the significant unfunded liability owed to the state’s pension systems is to re-amortize the repayment schedule created under the Pension Ramp in a manner that (i) increases the funded ratios of the five systems annually to the point that they become healthy; (ii) accomplishes that growth in funded ratio even after accounting for all cash flow obligations of the systems to pay benefits to current and future retirees; and (iii) is affordable, given the other demands on current tax revenue to fund core services…”

    For the complete report, click here.

  4. Could have happened this last round, had the IEA not waited & pledged $4 million to Martire at the beginning instead of, at the last minute–giving OUR money away ($4 million) to Republican Kirk Dilllard,
    former ILL-Annoy Chairman of ALEC, an organization that, BTW, has been first & foremost in destroying unions, public schools, the middle class and, generally speaking, American democracy.

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