G-Rod

Krol’s Take on How Rod Can Do This

ArchPundit August 14, 2007 No Comments

Krol gets the idea of what Blagojevich is doing right, but the politics are a bit off:

Blagojevich will use his executive powers to expand health care programs for the poor and uninsured. Here’s how he gets around the fact that he cannot by law spend the $500 million in special projects he plans to veto: Blagojevich spends the Medicare money lawmakers have authorized and then lets the bills pile up. The governor either comes back and asks for more money when the Medicaid spending power runs out before the end of the fiscal year, or the bills get paid out of the next year’s budget. The governor can do this because most of his health care expansions were passed into law without a lot of details. The specifics were hashed out at an obscure rules-making body later. That same body will consider Blagojevich’s new health-care expansions. The only way to block it would be for House Speaker Mike Madigan, House Republican leader Tom Cross and Senate Republican leader Frank Watson to have their members team up to shoot down the rules changes.  That opens them up to a rhetorical barrage from Blagojevich that they’re blocking health care for “working people.” But it’s unclear whether the public would be able to grasp all this by that point.

Given this is a public strategy, Blagojevich shot himself in the foot because assuming he can get past JCAR–and I doubt he can, the Courts would have a clear intent of his actions spelled out–and Blagojevich is saying he is appropriating money–something he is forbidden to do. His new rules will be hit with injunctions and then heard in court. The evidence is clear that he’s trying to appropriate money contrary to what the Legislature passed. He cannot do that and a court can use this sort of strategy as evidence of intent and thus, evidence that it was not simply delegated authority.

Krol thinks this works in Blagojevich’s favor because he can rail against the Leaders. Typically Krol would be right, but right now, Blagojevich is taking a pounding everywhere and what it looks like to most voters is that he is arrogant and evading the Constitution/law. And he is.

Rod Goes for a Constitutional Crisis

ArchPundit August 14, 2007 No Comments

Interesting way to make matters worse.

Let me explain very simply.

(b) The General Assembly by law shall make
appropriations for all expenditures of public funds by the
State. Appropriations for a fiscal year shall not exceed
funds estimated by the General Assembly to be available
during that year.

=====

SECTION 9. VETO PROCEDURE
(a) Every bill passed by the General Assembly shall be
presented to the Governor within 30 calendar days after its
passage. The foregoing requirement shall be judicially
enforceable. If the Governor approves the bill, he shall sign
it and it shall become law.
(b) If the Governor does not approve the bill, he shall
veto it by returning it with his objections to the house in
which it originated. Any bill not so returned by the Governor
within 60 calendar days after it is presented to him shall
become law. If recess or adjournment of the General Assembly
prevents the return of a bill, the bill and the Governor’s
objections shall be filed with the Secretary of State within
such 60 calendar days. The Secretary of State shall return
the bill and objections to the originating house promptly
upon the next meeting of the same General Assembly at which
the bill can be considered.
(c) The house to which a bill is returned shall
immediately enter the Governor’s objections upon its journal.
If within 15 calendar days after such entry that house by a
record vote of three-fifths of the members elected passes the
bill, it shall be delivered immediately to the second house.
If within 15 calendar days after such delivery the second
house by a record vote of three-fifths of the members elected
passes the bill, it shall become law.
(d) The Governor may reduce or veto any item of
appropriations in a bill presented to him. Portions of a bill
not reduced or vetoed shall become law. An item vetoed shall
be returned to the house in which it originated and may
become law in the same manner as a vetoed bill. An item
reduced in amount shall be returned to the house in which it
originated and may be restored to its original amount in the
same manner as a vetoed bill except that the required record
vote shall be a majority of the members elected to each
house. If a reduced item is not so restored, it shall become
law in the reduced amount.
(e) The Governor may return a bill together with
specific recommendations for change to the house in which it
originated. The bill shall be considered in the same manner
as a vetoed bill but the specific recommendations may be
accepted by a record vote of a majority of the members
elected to each house. Such bill shall be presented again to
the Governor and if he certifies that such acceptance
conforms to his specific recommendations, the bill shall
become law. If he does not so certify, he shall return it as
a vetoed bill to the house in which it originated.
(Source: Illinois Constitution.)

The Governor can reduce or veto money in an appropriation, he cannot, appropriate money for another purpose. It is simply unconstitutional.  This is the same fight with Bush and his clearly unconstitutional signing statements where the Executive takes  a power that is clearly delegated to another branch and assumes it. It is an impeachable offense.  Regardless of the policy or the politics, it’s a danger to the institution of government itself and it’s shameful in Jones is going along with this.

The Man-Child Strikes Again

ArchPundit July 2, 2007 No Comments

The Governor, after promising legislative leaders not to mess with the July 4th Holiday, calls a special session on the 5th.

Okay, those in the Lege who weren’t completely blaming him before, are now. I can understand a certain level of frustration in the Governor’s office given he introduced a fairly dramatic plan that did a lot of things he had been accused of ignoring and then getting pounded by everyone. I think he was gaining some momentum before I ended up taking an unplanned blog break, but that was all lost and this sort of thing is going to prolong the problem, not solve it.

Dan has a decent take on the how the caucuses operate and I think it’s important to note how he describes Madigan and the other caucus heads. They do have a lot of power, but they also have it partially because they listen to their members and their members’ concerns. They are far from innocent in creating this fiasco–well, actually the Republicans are since they didn’t have any say until overtime.

On substance, The Governor has some decent points. However, when he screws with people like this, he loses any power to leverage those decent points.

He loses all respectability with attacks like this one on Fritchey, Harris, and Feigenholtz.

The most telling story is the one Fritchey talks about where the Man-Child refuses to talk without the leadership

Now, who does that remind you of? Gee, an executive leader who refuses to talk with those he needs to resolve something with unless all of his conditions are met first.

Could You At Least Talk About the Budget?

ArchPundit June 20, 2007 No Comments

Apparently we are ruled by a giant child.  And let me make clear, I think the GRT was a good idea and the health care plan was generally doable from a policy sense, though the politics were bad.

I’d still argue the GRT is the best solution available–I would argue that an income tax change should be to make it progressive first and then figure out the rate. Overall the GRT was probably the best solution. It’s now dead.

The strategy for everyone at this point should be to figure out a budget for this year and build up good relationships so a serious deal can be reached next year to deal with long term financial problems.  Just the opposite is happening endangering possible future deals.

Groundhog Day

ArchPundit June 19, 2007 No Comments

I swear there was a lot of budget talk before I disappeared for a while.

I got you babe….

HB 750 Is Just as Bad

ArchPundit April 5, 2007 4 Comments

The stunning thing to me about the battling between Democrats over HB 750 and the GRT is that both reinforce the regressive nature of the Illinois tax system. HB 750 seeks to increase the flat tax on income while reducing property taxes. While I think property tax relief is extremely important in parts of the state, it also tends to be somewhat progressive with notable exceptions of farms and properties in rapidly increasing land values.

Democrats are willing to fight a huge battle over reforming taxes and making them ‘fairer,’ but no one is introducing a proposal to actually make the system progressive.

Everything being said about the corporate loopholes is correct, but the solution is only barely better than the status quo.

The solution for Democrats should be to change the Illinois Constitution and allow for a progressive income tax.  In a state that is now strongly blue and has the ability to pass such a change with the strong united voice of state leaders there is no excuse.  I am not one for ideological purity in a party, but there is no excuse on a basic issue of fairness like this for any Democrat to try and say it cannot be done.

Also, this would allow a relatively easy fix to the loophole problem that advocates of the GRT keep hyping–use a progressive business income tax on profits and hit large businesses that aren’t paying anything with an alternative minimum tax (AMT) that operates like a GRT as a backup.

The current solutions will simply further institutionalize regressive tax structures.  This is an issue that any fool should be able to sell and it’s the right thing.  Democrats have won the last two elections, let’s make them count for something.

A GRT Example

ArchPundit April 2, 2007 1 Comment

A commenter left a comment that was thoughtful, but I’d argue wrong on the GRT post:

“large out of state retailers are benefited by the GRT at the expense of small, local businesses”

This is incorrect. I would say that the GRT actually impacts those out of state more – since they are the ones who are able to get away with paying nothing.

I think the biggest impact this will have is on those companies that are based out of state but sell to people in Illinois. They can hide their income (and have been), but not their sales.

Additionally, when you take healthcare into the calculation – that is something that actually affects a businesses’ bottom line. You cannot exclude that when making calculations on how it will affect them.

A businesses with 20 employees that can save $50,000 per year on their health insurance costs isn’t going to give a damn about $5,000 in taxes.

His point isn’t invalid, but I think it misses the point of what I was saying and what the report was saying about the pyramid:

No, there is only one transaction for them with the tax in place. So if they are selling pork from Iowa, the only tax is upon the sale in Illinois. If, however, we are talking about pork raised here, slaughtered here, processed here, goes to a distributor here, is then sold to a market here and then sold to a consumer in Illinois the tax is payed 5 times. That’s the point of the pyramid structure of the tax. Out of state companies are advantaged because they don’t have the same costs of the tax if the pork is all, but sold to the consumer elsewhere.

In that case, the tax hits twice–the sale from the distributor to the market and the market to the consumer.

Rod and the Terrible, Horrible, No Good, Very Bad Tax

ArchPundit April 2, 2007 10 Comments

Via Dan Johnson Weinberger

The GRT is a really dumb idea according to the Institute on Taxation and Economic Policy

They testified at the hearings 

And they have an Issue Brief 

One on the Blagojevich plan 

This is a Terrible, Horrible, No Good, Very Bad tax.
From the ITEP report and echoing what I wrote the other day:

GRTs are not sensitive to a business’s ability to pay.  Businesses that fail to turn a profit would still face a GRT; businesses that are engaged in high-volume, low-profit-margin activities would be adversely affected as well.  Conversely, businesses with very high profit margins could pay lower taxes under a GRT than under a corporate income tax.

But just as important:

GRTs lead to severe pyramiding problems.  Since a GRT applies not just to retail sales, but to all stages of the production process, it may be levied on itself multiple times. For instance, the GRT paid on the raw materials going into a particular product will later be subject to GRT when the finished product is sold to a wholesaler.  One examination of Washington’s gross receipts tax found that it pyramids 2.5 times on average.

And this is especially problematic when you think about the economies in depressed communities and neighborhoods.  It won’t matter much to Walmarts, but the local shop owners who are often the provider of basic  goods in many poor neighborhoods almost always go through distributors and other middlemen to get their products meaning the impact of the tax is felt by those ultimate purchasers in the community and neighborhoods and  large out of state retailers are benefited by the GRT at the expense of small, local businesses.