Tuesday, December 27, 2005
The column is here and the highlights follow:
Cigarette levies are a regressive and now wildly excessive form of taxation that thrives, I figure, because at some level smokers feel they deserve to be punished for their weakness and so can't complain.
The decrease in local cigarette sales caused by a doubling of the county tax will result in budget shortfalls at the city and state levels (Illinois officials estimate the state lost $40 million in 2004 when Cook County hiked per-pack taxes by 82 cents). And because our elected officials are too cowardly to spread their budget burdens around, you can be sure who they'll turn to with open palms and moist smiles when the time comes to make up the difference and plug the holes.
The cycle will continue until a fair-minded majority says, "Enough already! Pick on some other self-destructive habit for a change."
Here's the part that bothers me: calling our elected officials "cowardly" because they won't "spread their budget burdens around"
What is that about?
Suddenly, an elected is a coward because the tax with the highest degree of support among the electorate is the one they choose to raise? A coward?
Them's fighting words.
And how exactly does Eric suggest budget burdens be spread? An income tax increase for the state? A property tax increase? A sales tax increase?
It's easy to criticize -- and very easy to throw around really inflammatory language like cowardly -- but those sorts of adjectives demean public service and make a usually-insightful columnist look a little mean-spirited.
Am I off base here or is Zorn wrong?
Sunday, December 18, 2005
I wonder why no one seems to get any credit for the Ethics Act of 2003.
This was, I think by all accounts, a big deal.
The Illinois Campaign for Political Reform (disclosure: a former employer for a bit) has this factsheet on the many provisions of the legislation. For the first time, a lot of things that were considered business-as-usual were banned with some fairly strong enforcement mechanisms, including:
- Restricting gifts from lobbyists, state contractors, and others with a special interest in the outcome of government decisions to public officials.
- Barring inspectors from soliciting campaign contributions from the businesses or individuals they regulate.
- Creating ethics commissions for the executive and legislative branches of government to adjudicate complaints about unethical behavior.
- Designating inspectors general to investigate ethics complaints about public employees and officials.
- Mandating ethics training for all state employees and officials.
Speaker Madigan and Governor Blagojevich deserve a lot of credit for this law -- the Governor pushed very hard over the summer and fall of 2003 for a tougher ethics package. No one seems to give him any real credit for that. That really was political reform and ending some shady practices.
I know there are a litany of complaints about Blagojevich (some of them fair, some of them carping) but for a moment, I'd like to ignore all of that and just ask the question why no one -- particularly the governor -- seems to get any credit for cleaning up part of Illinois government with this substantive Ethics Act.
Plus, I like most of the good news out of Illinois and Cook County and Chicago.
But the latest is roughly $50 billion in tax breaks for wealthy people and corresponding cuts of $50 billion in health care and education.
Way to invest in the future!
Here's a link from the AFL-CIO that calls on Congress to protect working families and reverse thse fiddle-while-Rome-burns tax cuts for millionaires.
And wouldn't it be nice if the Illinois Republicans who are generally more level-headed than southern Republicans could knock some sense into the national GOP party? Remember George Bush's father who helped pave the way for the prosperity of the 1990s by supporting a tax hike on wealthy people to invest that wealth in education and health care? What happened to Republicans like that?
Now they all look like Enron Republicans. Spend it all now. Enrich the rich. Forget the rest.
The issue is that these two southwest side plants emit a lot of pollution and the federal government is, under the Bush Administration, not moving to cut pollution anywhere. Thus, it is up to the State or the City to figure out how to cut pollution from these power plants. The same issue extends to just about every Illinois town with a coal-burning power plant, but Chicago's plants are the most residential (I believe).
So far, neither government has done much.
The Blagojevich Administration decided about a year ago to punt on this one, choosing not to impose tough pollution control requirements and instead work on a regional plan with other Midwest state legislatures and governors to come up with a Midwest standard. No word on whether there's been any progress on that front.
On the city side, as the article details, the ordinance has been stuck in committee for four years. Some argue that a city can't impose stricter emissions standards than what federal law allows. I confess I haven't studied the extent to which federal law pre-empts states or cities from setting their own standards, but I can't imagine that a city or a state couldn't choose to set tougher standards to protect the public health of their own people.
That leaves us with figuring out what to do about these plants that employ about 200 people, provide power to about a million homes (a good thing in the event of another breakdown in the electric grid) and make hundreds or thousands of people sick every year.
I've wondered why we can't figure out how to tax pollution to give Midwest Generation a financial incentive to invest in pollution control technology. Currently, the incentives are backward. Each generator sells their power on an open market, and there's no price differential based on pollution generated. In fact, if a generator invests in pollution control, that makes the price of the power more expensive, since the generator needs to include the millions that any modern equipment to control pollution costs into the price of the power that they sell. So the less a power plant invests in pollution control, the cheaper they can produce power and the fatter the profit margin.
One way to deal with this problem is to have the government set a standard for how much pollution power plants can generate. That works best if the federal government sets the standard, because then every generator faces the same constraints. It doesn't work so well if only Chicago has the standard, because then Chicago-generated power is more expensive to sell than power generated elsewhere, and the incentive then is to shut the plant down altogether.
It seems to me that a state tax on pollution would make some sense, since it would affect each plant equally and it lines up the incentives to cut pollution in order to make more money.
Of course, there is no correct answer as to how much to tax one ton of NOx or one pound of mercury or how to calculate the tax for a pound of radioactive waste from a nuclear plant, but that shouldn't stop us from coming up with our best guess (or let the ICC come up with a good guess) to keep Illinois plants profitable but give them a strong reason to invest the millions in pollution control equipment.
After all, as ComEd moves ever closer to its long-awaited retail rate hike in 2006, there ought to be a way that the public gets something out of the deal too in terms of fewer cancer deaths.
The article is here for the next week or so.
A neat graphic is here.
The figures are high: 130 billion or so in federal dollars spent through these tax cuts.
By comparison, Illinois will spend 45 million on the AllKids program to extend health insurance to 250,000 children through a direct program.
If the government simply ran one large health insurance system, like Medicaid, and abandoned the wasteful method of running money through private businesses to buy health insurance for their employees from another private business, we'd get the job done much more efficiently.
I guess a strained analogy would be if we decided to finance our national guard through private businesses instead of just hiring guardsmen and buying equipment -- each business would get a tax break for every guardsman they employed and if we ended up with far fewer guardsmen then we need, well, maybe we'd just have bigger tax breaks to induce more businesses to provide jobs for guardsmen instead of just hiring them directly.
Sunday, December 11, 2005
By the way, if you have kids and want to pre-enroll in AllKids, you can do so online here. The program kicks in this summer, so affordable health insurance is only six months away.
Saturday, December 10, 2005
How about a tiny newspaper chain?
The Small Newspaper Group that runs papers in the Quad Cities, Kankakee and Ottawa financed this massive investigation. Their bureau chief, Scott Reeder, led the effort.
The results are here: www.TheHiddenCostOfTenure.com
I'll talk about them in a minute (and they are definitely worth a long read), but I wanted to note how appropriate this report is in terms of the debate on this blog on MoveOn.org (and some of MoveOn's 3.3 million members) protesting the Tribune Company's recent decision to cut back staff at its papers around the country.
Because of staff cuts at a profitable enterprise, we will all suffer from fewer reports like the excellent one that the Small Newspaper Group produced on teacher tenure.
The Tribune editorial board weighed in on the subject with their editorial here calling for an abolition of tenure, but it would be nice if a few of the bigwigs at the Trib's corporate office decided to invest more resources into newspaper staff.
By the way, when MoveOn.org people confronted the Trib's CEO at a New York City media conference (press release here, Trib story here), Mr. Fitzsimmons decided not to engage in that discussion.
The Small Newspaper Group had a few little suggestions and one big one.
The small suggestions include:
-- It shouldn’t take a reporter six months to get this kind of information. It should be collected by the state and offered to the public as an accountability report card each year.
-- Illinois should follow Iowa’s lead in outlawing secret deals with bad teachers. Sunlight is a great disinfectant.
-- Long term teachers who are incompetent should receive severance pay reflecting their seniority, along with professional outplacement help. This is better than keeping them in the system, where the damage they cause to students lasts for years after the student has left that classroom.
These all seem exceptionally reasonable to me and my hope is that the General Assembly and local school districts embrace the ideas. If I had to guess, I'd guess the first idea that forces the State Board of Education to do more work at collecting data is the one most likely to pass in 2006.
But the editorial closes with this idea:
-- But the greatest reform would be a grand trade. Financing schools with property taxes, started when only the rich owned real estate, is wrong, resulting in huge disparities among school districts in the state. Illinois should replace the property tax with an equivalent income tax, in return for real accountability for performance. The system we have is a sham and a disgrace..
Now that the costs of tenure are no longer hidden, we can do no less
This is the slowly simmering pot of a big idea that will hopefully be served up in 2007.
Up to now, the debate on education has turned on raising the 3% state income tax to 5% (raising about three billion), putting half the money into poorer schools and the other half into richer property taxpayers in the form of lower property taxes.
I've always found that to be an awkward trade.
Better, in my view, to trade accountability and performance for the extra money. Forget lowering property taxes altogether. Just spend the money on better schools. I believe that we're more likely to convince the reluctant taxpayer to pay an extra two percent of their income for education if s/he believes that the money will actually make a difference in the lives of children, and by extension, the state. That's a more compelling pitch than putting more money into the same school system (with some serious flaws), but with, perhaps, a smaller local property tax bill in exchange for a higher state income tax.
Scott Reeder and the owners of the Small Newspaper Group have done Illinois students a great public service in documenting some of the major flaws of our schools. Now we have the chance to use this knowledge -- produced by a civic-minded for-profit company -- to make life better. I hope this becomes a central part of the education funding debate.
Wednesday, December 07, 2005
So all of 2006 and all of 2007 and half of 2008 will be full of carcinogenic smoke in Chicago.
Unless Commissioner Mike Quigley pushes Cook County to move faster than Chicago's July 1, 2008 deadline....(he has proposed a Cook County ordinance to ban smoking in all of Cook County).
Tuesday, December 06, 2005
The first organization to endorse a constitutional convention is the Illinois Association of School Boards, according to this article in the Daily Southtown, reprinted on the Students First Illinois site here.
School board members understand that Illinois dramatically underinvests in children from poor areas, because schools rely on a local tax, not a state tax. That means poor areas have poor schools while wealthy areas have wealthy schools. Our 3% income tax, the lowest among the 41 states with an income tax, is the main reason why the state doesn't generate enough money to buy better teachers or build adequate facilities.
As the Southtown article puts it:
The current language on education funding was a result of the 1970 constitutional convention.I think there is something pathetic about opposition to a constitutional convention -- pathetic in the sense that the opposition to a constitutional convention is really opposition to a public debate about changes to our constitution that must be ratified by the electorate. That's it. It's fear of democracy, ultimately.
Delegates met in Springfield to find a way to get the state to pick up more of the schools' tab.
People were concerned that the state was providing just 31 percent of the money for schools, compared with 64.5 percent from local property taxes.
Districts with corporate headquarters and expensive homes were funding winners. Rural districts and industry-poor suburbs were losers.
Efforts to set a particular percentage for the state to contribute failed, but a line written by delegate Dawn Clark Netsch made it into the document.
The state has the "primary responsibility" for financing the system of public education, it reads.
"It was a club held over the heads of legislators," said Clark Netsch, a former senator and gubernatorial candidate. "The problem is, it hasn't hit hard enough."
We should have a constitutional debate about the state shouldering the primary responsibility for funding schools -- and what efficiency measures the school districts and teachers unions should have to trade as part of better public policy. It's a good debate to have in the General Assembly and a good debate to have at a constitutional convention.
There's actually a yahoogroup for advocates of a constitutional convention here that anyone can join.
I hope Illinois voters (and the powers that be) support a constitutional convention in 2008. There are always improvements that we can make, and a debate on the issues followed by a public vote (and constrained by the protections of the federal Constitution) would be a very healthy thing.
Issues that I'd like addressed would include the constitutional mandate for a flate rate income tax, the odd, mandated 5/8 ratio of individual income tax to corporate income tax and perhaps a strengthened protection of speech rights. And for the tax-cutters, I think we should revisit the issue of whether all public pensions should be constitutionally enshrined where it is unconstitutional to lower any pension payments at all -- even those clear mistakes where some people are getting ridiculously generous pensions that the state, county or city can not afford. Pensions are our biggest fiscal problem, and the constitutional prohibition against fixing any of the worst mistakes in pension increases that the General Assembly has made over the years is a problem. (Yes, I know that pensions are underfunded, but I think it's fair to say that at least sometime over the last ten years the General Assembly has increased some pension payments unreasonably, and it would be best if some of those unreasonable increases could be reversed).
Saturday, December 03, 2005
Our local media conglomerate, the Tribune Company, has apparently decided that 10-15% operating profits aren't enough for some of their newspapers, notably the Chicago Tribune and the Los Angeles Times. They are looking for 25% profit margins.
So, they are cutting newspaper staff which means less coverage of government and politics, which means a less informed electorate.
MoveOn.org is sponsoring a petition drive here (sign it now) to call on the Tribune Company to reverse the cuts and invest in more reporters and editors.
The Tribune (through an LA Times article) was good enough to write about the petition drive here, and essentially argued that economic necessity forced these cuts.
At the Chicago Tribune, which recently reduced its editorial staff of more than 600 by 28, Publisher David Hiller said the reductions were similar to those being made at many other newspapers, including those owned by Knight Ridder Inc. and the New York Times Co.
"The necessity to make these cuts is unfortunate, but it's the reality of the marketplace that we are in," Hiller said.
I wonder if that's true. Isn't that what Conrad Black said about staff cuts at the Sun-Times when he was stealing hundreds of millions from Hollinger International? I'm not suggesting that anyone at the Trib is stealing anything, but I am suggesting that if the Trib is generating 10-15% profit margins now, is it really necessary to cut staff?
Of course not -- it's just a question of corporate greed versus civic values. If the managers can squeeze more money out of the papers for the shareholders, then they'll do it, civic consequences be damned.
It's a problem with corporate governance -- the push for shareholder value (making money) trumping every other value (democracy, education, and other non-money-making things that make our country great).
Here's the MoveOn email that makes the case on the numbers. The best quote is here:
Steve Wasserman, a former deputy opinion editor at the Chicago Tribune's sister paper, the Los Angeles Times, described how the Tribune Company is running journalism into the ground at his former paper:Tribune Co. insists that the paper deliver annual operating profit margins nearer 25% or 26% than its more customary return of around 15% or 16%. (Last year...the paper reaped an operating profit margin of about 20%, a figure that failed to satisfy the Chicago moneymen.) The paper's top managers and editors are determined to do so or die trying
Maybe a financial guy (Nathan Kaufman?) can dig into the Trib's balance sheet to see whether the Trib is already making a healthy profit on the papers, and now they're just greedily looking to make more at the expense of the rest of us.
I find this frustrating, because I think the Chicago Tribune should be one of the world's best newspapers (that's what Tribune-owned WGN stands for -- World's Greatest Newspaper), and to do that takes bureaus around the globe running original stories, not a collect of AP stories from pages 5 through 12 of the front section. It's frustrating that people who want to read top-notch news can't also read about the Chicago City Council or the Illinois General Assembly, because the New York Times and the Wall Street Journal simply do not have Chicago Metro sections in their papers. If I had my wish, I'd have the Tribune Company decide to make the Chicago Tribune one of the world's premier papers and double the editorial staff. Then maybe they could get away with charging a dollar per print paper instead of 50 cents (as the New York Times does) and they could start charging for some content on their website. Make no little plans, Tribune!
By the way, if you haven't seen the Museum of Broadcast Communications (www.museum.tv), check it out. It will be a fantastic addition to Chicago.