Strike a grand bargain by amending the Illinois Constitution to give both sides something. And save Illinois.
J. B. Pritzker, the Democratic nominee for Illinois governor, says
his top priority is passage of a graduated income tax in Illinois.
That will be difficult, if not impossible, because of a little something called the Illinois Constitution, Article IV, Section 3(a) that outlaws a graduated/progressive income tax. It reads: “A tax on or measured by income shall be at a non-graduated rate.”
(Brian Cassella / Chicago Tribune)
That’s an absolute roadblock to anything that a Gov. Pritzker, House Speaker Mike Madigan and their Democratic legislators might try to cook up on their own. It will take a constitutional amendment that requires a three-fifths vote in both the Senate and House and a referendum requiring 60 percent of those voting to approve the amendment. And because of other requirements a referendum couldn’t be held until 2020. How say you now?
But there’s a way, J.B. It will take skillful politicking and a big trade-off. The trade-off would be something that would go a long way to getting Illinois out of its financial hole. As long as you would be trying to amend the Illinois Constitution, you could agree to another amendment, one that would eliminate the single biggest roadblock to solving the state’s financial problems.
I’m talking about getting rid of the Constitution’s Article VIII, Section 5 that protects Illinois government retirees against anything that would in anyway reduce their overly generous pension benefits. It reads: ““Membership in any pension or retirement system of the state, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” [Emphasis added.]
That Constitutional provision has been used by the courts to club to death any effort to reduce those pensions, unfunded to the tune of (at least) $140 billion. Paying that off would take every cent of every annual budget some four years, without any money being spent on anything else, from education and Medicaid to the interest paid on state borrowing–the only thing that has kept from bankruptcy and whose interest payments gobble up at least $700 million that could go to fund education and desperately needed social services.
This would be a grand bargain that legislators and voters would come to understand is the only way to save the state. Both conservatives who oppose any kind of tax increase and liberals who would rather go blind than cut pension benefits could not avoid the imperative: Either give up something or ride the state’s ever faster slide into oblivion. Compromise, for god’s sake.
Pritzker recognizes the Constitutional hurdles, explaining to Greg Hinz of Crain’s that a stopgap solution would be to raise the state’s existing flat rate, and then lower it for low- and middle-income taxpayers by adding and expanding deductions. Then go for the referendum in 2020. Personally, I don’t think the stopgap would work. Republicans would themselves rather go blind than vote for a graduated income tax without getting something big in return. Something that they could pitch as a necessary compromise. The 2020 referendum is the only way to do that.
The biggest hurdle, of course, is the public employee unions that are uncompromising and selfish in their refusal to consider even the slightest alteration of the ludicrously generous pension benefits. Both a Gov. Pritzker and Speaker Madigan owe so much to organized labor it would take a profile in courage to do what’s right for the people of Illinois.