AGAINST.

>> PARIS, THANK YOU.

>> AND TO CAROL MARIN AND A

CLOSER LOOK AT ONE GROUP'S IDEAS

TO TAX ILLINOIS TROUBLED FISCAL

STATE.

CAROL?

>> PHIL, THANK YOU.

>> $8 BILLION IN NEW REVENUE

THAT IS PART OF THE SOBERING AND

VERY SERIOUS PRESCRIPTION FOR

ILLINOIS' FISCAL TROUBLES.

IT'S OUTLINED IN A REPORT BY

SOME OF ILLINOIS' PREMIER

BUSINESS LEADERS A GROUP KNOWN

FOR FISCAL CONSERVATISM.

WE WILL HEAR FROM LESLIE MUNGER.

FIRST WITH THE DETAILS OF THE

REPORT FROM THE CIVIC COMMITTEE

OF THE COMMERCIAL CLUB OF

CHICAGO WE ARE JOINED BY AMANDA

VINICKY.

AMANDA, A QUICK REMINDER WHAT IS

THE CIVIC COMMITTEE AND THE

THRUST OF THIS REPORT?

>> THESE ARE PREMIER BUSINESS

LEADERS, BIGWIG HONCHOS AND THE

REPORT GOES BACK TO 2014.

BACK THEN PAT QUINN WAS GOVERNOR

AND ILLINOIS HAD A BUDGET AN

INCOMPLETE ONE AND THE TAX RATE

WAS HIGHER IN THIS CLIMATE THAT

THE CIVIC COMMITTEE SAID IT

SURVEYED MEMBERS AND FOUND THEY

WERE CONCERNED ABOUT ILLINOIS'

FISCAL FUTURE.

BUSINESS LEADERS WORRIED ABOUT

THE UNCERTAINTY THAT YEARS OF

POOR PLANNING WERE MAKING

ILLINOIS INHOSPITABLE.

>> LITTLE COULD THEY HAVE KNOWN

HOW UNCERTAIN THINGS WOULD GET.

TWO-AND-A-HALF YEARS LATER

WITHOUT A BUDGET IT'S THE

ULTIMATE IN UNCERTAINTY.

THAT IS THE BACKDROP FOR THIS

REPORT.

>> SO THE REPORT IS GETTING

ATTENTION BECAUSE THESE BUSINESS

LEADERS ARE NOT WHAT WE CALL THE

POSTER BOYS AND POSTER GIRLS OF

LIBERALISM OR GOVERNMENT

SPENDING OR TAX INCREASES.

SO IF ILLINOIS NEEDS TO RAISE AT

LEAST $8 BILLION A YEAR IN

REVENUE, WHERE IS IT COMING

FROM?

>> MOST OF THAT IS GOING TO BE

IN TAX INCREASES.

RIGHT NOW ILLINOIS' PERSONAL

INCOME TAX IS 3.75% AND THE

REPORT CALLS FOR BRINGING THE

PERSONAL INCOME TAX RATE BACKUP

TO 5%.

THE BUSINESS LEADERS RECOMMEND

RAISING THE CORPORATE RATE TO

PLUS ADDING A SALES TAX TO

SERVICES AND RETIREMENT TAX AND

GETTING RID OF CREDITS AND THAT

COULD BRING IN $9.7 BILLION.

>> SO AT THE SAME TIME THESE

EXECUTIVES ARE ARGUING THERE

HAVE TO BE CUTS AND THEY ARE

TALKING ABOUT $2 BILLION IN CUTS

AND CONTRAST TO $8 BILLION IN

TAX REVENUE WHERE IS ILLINOIS

GOING TO SCALE DOWN?

>> $2 BILLION AND THAT IS AT

MOST FROM WRA THEY GATHER FROM

TALKING TO BUDGET EXPERTS AND

THEY HAVE SOME IDEAS THERE

HOWEVER THAT COULD BE EASING UP

ON GOVERNMENT PURCHASING RULES

AND HAVING STATE EMPLOYEES PICK

UP MORE OF A TAB FOR HEALTH

INSURANCE AND RIDDING THE

SUBSIDIES FOR EMPLOYERS

HEALTHCARE, AND CUTS TO MEDICAID

AND ALSO THIS REPORT TALKS ABOUT

PENSIONS AND THOSE ARE MIRRORING

THE RECOMMENDATIONS FOR WHAT

GOVERNOR BRUCE RAUNER HAS BEEN

CALLING FOR.

BUT THIS IS A BIG BUT AND IN

CONTRAST TO THE GOVERNOR'S

BUDGET PROPOSAL, THE REPORT SAYS

THAT ILLINOIS CANNOT BANK ON

MANY OF THE SAVINGS PENSIONS

RIGHT NOW.

BECAUSE PENSIONS ARE SURELY

GOING TO BE SUBJECT TO A

LAWSUIT.

>> AND CONSTITUTIONAL QUESTIONS

HAVE LOOMED ON THOSE ALREADY.

SO THE CIVIC COMMITTEE IN

ADDITION TO ALL OF THIS, IS

CALLING FOR THE STATE TO SPEND

SOME MORE MONEY?

>> RIGHT.

IT'S MOSTLY AGAIN, THE REVENUE

INCREASES AND THEY TALK ABOUT

SCALING BACK AND THEN THEY WANT

TO SPEND MORE AND SOME OF THOSE

RECOMMENDATIONS INCLUDE ON THE

REVENUE SIDE PART OF THAT WOULD

BE TAKING A HIT.

IT WOULD BE ADDING NEW TAX

CREDITS AS THEY GET OF SOME AND

THAT IS GIVING BIGGER TAX

CREDITS TO LOW INCOME EARNERS

AND TEACHERS WHO BUY SUPPLIES

THEY WOULD GET A TAX CREDIT AND

REDUCING THE FEE FOR LIMITED

LIABILITY CORPORATIONS.

AND LIKELY TO ADVANTAGE THE

WEALTHY, ELIMINATING THE ESTATE

TAX.

THOSE, HOWEVER AMOUNT TO A SMALL

CIVIC COMMITTEE SAYS THERE IS NO

WAY ILLINOIS CAN REDUCE SPENDING

ON EDUCATION.

RATHER IT CALLS FOR PUMPING MORE

MONEY INTO SCHOOLS.

AND THE REPORT DOES NOT GET INTO

THIS BUT IT SAYS THAT ILLINOIS

IS GOING TO NEED TO PUT BIG

MONEY INTO INFRASTRUCTURE

REPAIRS.

>> WHERE DOES THIS FIT IN WITH

THE NEGOTIATIONS IN SPRINGFIELD?

TIME IS RUNNING OUT.

MAY 31 IS THE END OF THE

LEGISLATIVE SESSION?

SO?

>> SO PROBABLY LATE FOR

POLITICIANS TO COMMON TEMPLATE

THIS --

CONTEMPLATE THIS REPORT I WILL

BE IN SPRINGFIELD TO REPORT ON

THE LATEST BUT SOME DOES MATCH

WHAT IS BEING TALKED ABOUT IN

THE GRAND BARGAIN.

THEY ARE FOCUSED ON CHANGING HOW

THE STATE FUNDS SCHOOLS AND HOW

IS UP FOR DISCUSSION.

AND BOTH CONTEMPLATE THE PENSION

CHANGES, PROCUREMENT RULES AND

MAKING IT EASIER FOR

MUNICIPALITIES TO CONSOLIDATE

AND EXPAND THE SALES TAX ON

SERVICES.

THE GRAND BARGAIN EXPECTS TO

RAISE REVENUE BUT ADDING SIX

CASINOS AND LEGISLATORS ARE NOT

CONTEMPLATING A RETIREMENT TAX.

THE REPORT SAYS THE

RECOMMENDATIONS ARE INTENDED TO

MAKE ILLINOIS' TAX CLIMATE MORE

ATTRACTIVE TO AVOID MAKING IT

LESS ATTRACTIVE.

THE RETIREMENT TAX FITS THAT

MOLD BECAUSE ALL STATES TAX

RETIREMENT INCOME AND GOVERNOR

BRUCE RAUNER NIXED THAT IDEA.

>> WHERE DOES THE REPORT FIT IN

WITH THE GOVERNOR'S TURN AROUND

AGENDA?

>> AGAIN, YOU SEE A LOT OF THIS

MIRRORING AND MATCHING WHAT THE

GOVERNOR CALLED FOR WHEN IT

COMES TO WORKERS COMPENSATION

AND PENSIONS.

GOVERNMENT CONSOLIDATION RED

TAPE BUT RAUNER SAID HE WILL

ONLY AGREE TO A TAX INCREASE IF

ILLINOIS GETS STRUCTURAL REFORMS

AND TERM LIMITS, THIS REPORT

SEPARATES THEM.

IT VERY CLEARLY SAYS A BUDGET IS

THE PRIORITY AND A BUDGET WITH A

WHOLE LOT $8 BILLION OF NEW

REVENUE.

>> AMANDA VINICKY THANK YOU.

YOU CAN FIND A LINK TO THE CIVIC

COMMITTEE'S REPORT ON OUR

WEBSITE.

>> REPRESENTATIVES OF THE CIVIC

COMMITTEE AGREED TO JOIN US THIS

EVENING BUT BACKED OUT WHEN WE

TOLD THEM WE WOULD BE JOINED BY

OUR NEXT GUEST THAT GUEST IS

LESLIE MUNGER, ONE OF THE

ILLINOIS' DEPUTY GOVERNORS.

WELCOME.

>> THANK YOU FOR HAVING ME.

>> YOU'VE HEARD AMANDA'S

RENDERING AND READ THE CIVIC

COMMITTEE'S REPORT.

THEY ARE SAYING BUDGET, BUDGET,

BUDGET, TURN AROUND AGENDA

CANNOT BE FIRST IN LINE OR

SECOND IN LINE.

THE BUDGET IS FIRST, SECOND AND

THIRD IN LINE.

IS IT TIME TO TAKE THE TURN

AROUND AGENDA AND LEAVE IT FOR

ANOTHER DAY?

>> I THINK EVERYONE WOULD AGREE

THAT WE NEED TO GET A BUDGET IN

THE STATE.

BUT I THINK IT'S IMPORTANT TO

REMEMBER IT HAS TO BE THE RIGHT

BUDGET.

A BUDGET THAT IS BALANCED AND A

BUDGET THAT WILL PUT US ON A

TRACK FOR THE STATE FOR A STRONG

FISCAL FUTURE.

WE HAVE FOR MANY YEARS IN THE

STATE OPTED FOR SHORT-TERM,

REVENUE, TAX ONLY OPTIONS THAT

IN A FEW YEARS LEAVE US WITH A

LOWER TAX BASE, AND MAKE IT

HARDER FOR US TO GENERATE THE

REVENUES AND DO NOT ADDRESS THE

DRIVERS FOR THE PROBLEMS WE

HAVE.

THE GOVERNOR HAS BEEN WORKING

WITH MEMBERS OF THE SENATE AND A

LOT OF THINGS IN THE REPORT THAT

DO MIRROR AND I THINK THINGS

LIKE WORKERS COMP AND THE

CHANGES TO MAKE THE BUSINESS

CLIMATE MORE COMPETITIVE.

THERE ARE A LOT OF GOOD THINGS

THAT THE GOVERNOR WOULD AGREE

WITH.

AND WE HAVE TO CHANGE THE

DRIVERS OF THE SPENDING.

AND HAVING $8 BILLION OF NEW

TAXES ON ILLINOISANS WITH ONLY

$2 BILLION OF SPENDING

REDUCTIONS?

IS NOT A WAY TO GO FORWARD THIS

IS HOW WE HAVE GOTTEN INTO THE

MESS.

>> YOU KNOW THE MEMBERS OF THE

CIVIC COMMITTEE THEY HAVE BEEN

FUNDERS OF THE REPUBLICAN PARTY

FOR DECADES IN ILLINOIS.

THESE ARE SERIOUS FISCALLY

CONSERVATIVE MEN AND WOMEN.

SO WHEN THEY PROPOSE SOMETHING

LIKE THIS IT IS WITH A SOBER

EXAMINATION OF THE BOTTOM LINE,

DON'T YOU THINK?

>> I THINK SO.

BUT ONE THING THEY DID NOT

ADDRESS IN THIS REPORT IS THE

ISSUE OF PROPERTY TAXES.

AND THEY REFERENCED THEY THINK

ILLINOIS IS AN OUTLIER ON THE

LOW-END OF BEING TAXED.

BUT THEY NEVER REFERENCED

PROPERTY TAXES.

WHEN YOU LOOK AT THE COMBINATION

OF PROPERTY TAXES, INCOME TAXES

WHICH ARE ADMITTEDLY A MODEST

LEVEL IN THE STATE WITH THE

ROLLBACK, SALES TAXES WHICH ARE,

I THINK THE FIFTH TO 8TH HIGHEST

DEPENDING WHERE YOU LOOK, AND WE

HAVE THE HIGHEST PROPERTY TAXES

IN THE COUNTRY.

WHEN YOU AGRIGATE THOSE

ILLINOISANS ARE BETWEEN THE

5-9TH HIGHEST TAXED IN THE

COUNTRY WHY WE ARE LOSING

PEOPLE.

IF WE WERE THE LOWEST TAXED WE

WOULD HAVE PEOPLE MOVING IN

INSTEAD OF OUT.

>> PROPERTY TAXES HAVE NOTHING

TO DO WITH THE STATE BUDGET.

PROPERTY TAXES FUND SCHOOL

DISTRICTS.

PROPERTY TAXES DON'T PAY ALL THE

UNPAID BILLS YOU HAD TO GRAPPLE

WITH AS STATE COMPTROLLER.

SO IF PROPERTY TAXES ARE FROZEN,

AND SCHOOL DISTRICTS CANNOT GET

THE MONEY THEY NEED AND HAS

NOTHING TO DO WITH OUR UNPAID

BILLS WHY WOULD THE CIVIC

COMMITTEE REFERENCE THEM

SPECIFICALLY?

>> WELL, BECAUSE IT'S ONE

TAXPAYER.

THE PROPERTY TAXES COME OUT OF

ONE SIDE OF THE POCKET.

AND THE ILLINOIS INCOME TAX IS

ANOTHER ON THE OTHER SIDE AND

WHEN YOU TAX PEOPLE TOO MUCH

THEY HAVE OPTIONS.

THEY MOVE OUT OF STATE.

SO DO BUSINESSES AND THAT IS WHY

WE HAVE SEEN BUSINESSES AND

PEOPLE LEAVING THE STATE ALL

OVER THE PLACE.

AND ACTUALLY THE PROPERTY TAXES

ARE HIGH BECAUSE IT PICKS UP A

PREDOMINANCE OF EDUCATION

EXPENSES THAT THE STATE CANNOT

FUND BECAUSE THE DRIVER OF OUR

EXPENSE PROBLEMS ARE FINANCIAL

PROBLEMS IN THE STATE ARE THE

EVER GROWING COSTS OF OUR

PENSIONS WHICH IS SOMETHING THAT

ARE NOT ADDRESSED.

>> AND THE CIVIC COMMITTEE DOES

ADDRESS THEM IN THE SENSE IT

RAISES THE SAME CONSTITUTIONAL

ISSUES.

BUT THESE ARE PEOPLE, I KEEP

GOING BACK TO WHO THE CIVIC

COMMITTEE IS.

THESE ARE EVERY DUNN AND BRAD

STREET COMPANY THAT WE COULD

NAME AND THEY WANT TO SAVE

ILLINOIS AND THEY HATE TAXES.

AND THEY DON'T LIKE GOVERNMENT

SPENDING.

AND YET, THEY SEEM TO THINK THAT

ONLY SOMETHING THIS RADICAL IS

GOING TO STOP OUR BLEEDING.

ARE THEY WRONG?

>> WELL, I DON'T THINK THEY HAVE

THOUGHT ABOUT THE IMPACT ON THE

INDIVIDUAL TAXPAYER IN THE

STATE.

BECAUSE WHEN YOU LOOK AT THE

TOTAL TAX BURDEN WE ARE

EXTRAORDINARILY HIGH AND WE'VE

SEEN WHAT HAPPENS.

WE HAVE RAISED TAXES AND TOOK

THE RATE UP TO 5% IN 2011.

IT BROUGHT IN $7 BILLION A YEAR,

$32 BILLION IN TOTAL.

WHERE DID THE MONEY GO?

IT DID NOT GO TO PAY DOWN OUR

DEBT OR BILL BACKLOG IT WENT TO

FUND PENSIONS.

THE COST OF PENSIONS IN THE

STATE OF ILLINOIS HAVE GONE FROM

3% OF GENERAL REVENUE IN 2000 TO

25% OF OUR EXPENSE AND IT'S ON A

PATH TO GET TO 28% IN A COUPLE

OF YEARS.

>> WHAT IS GOVERNOR BRUCE

RAUNER'S SOLUTION TO THAT?

>> THE GOVERNOR HAS TALKED VERY

CONSISTENTLY ABOUT THE NEED FOR

A MULTIPRONG APPROACH.

LOOKING AT CONSTITUTIONAL WAYS

TO REFORM PENSIONS ONE OF THE

TOPICS INCLUDED IN THE CIVIC

COMMITTEE REPORT.

BUT THE ECONOMIC GROWTH IS THE

KEY.

BECAUSE TAXES ALONE CANNOT GET

US OUT OF THIS MESS.

I WILL TELL YOU THAT OF THE

STATE'S CURRENT GENERAL REVENUE

PRETTY FLAT FOR THE PAST SEVERAL

YEARS $31 BILLION, 75% OF THAT

IS IN SPENDING THAT IS LOCKED

INTO LAW TO FUND PENSIONS,

MEDICAID, INTEREST ON THE DEBT,

EMPLOYEE GROUP HEALTHCARE.

THIS IS SOMETHING THE

LEGISLATURE CAN ADDRESS BY

LOOKING AT THE LAWS AND CHANGING

WHAT THEY HAVE PROTECTED

LEGISLATIVELY TO HELP REDUCE

COSTS THERE.

THAT WOULD FREE UP FUNDING TO GO

TO FUND EDUCATION, HUMAN

SERVICES, PUBLIC SAFETY ET

CETERA.

>> BUT AS THE GOVERNOR TALKS

ABOUT IMPROVING THE BUSINESS

CLIMATE WITH WORKERS COMP AND

TERM LIMITS HE THINKS WILL

STIMULATE THINGS THOSE ARE NOT

IMMEDIATE REVENUE PRODUCING

MOMENTS.

AND WHAT THE CIVIC COMMITTEE AT

LEAST FROM MY READING OF IT

SEEMS SO SAY THERE NEEDS TO BE

INDUSTRIAGE IN THE STATE --

TRIAGE, REVENUE TRIAGE AND IT

NEEDS TO HAPPEN NOW.

THE LEGISLATURE AND THE GOVERNOR

EVERYONE CARRIES THE BURDEN.

>> WE NEED REVENUE INTO THE

STATE.

BUT YOU CAN GET REVENUE FROM

TAXING AND THEIR REPORT PRODUCES

IT ALL FROM TAX INCREASES.

OR YOU CAN GET IT FROM A

COMBINATION OF TAXING AND A

GROWING ECONOMY.

I VISITED A COMPANY JUST LAST

FRIDAY WHO IS LOOKING AT

EXPANDING THEY ARE A $100

MILLION COMPANY AND THEY HAVE

OPTIONS IN ILLINOIS AND INDIANA

AND THEY ARE NOT FAR FROM THE

INDIANA BORDER AND THE COST

DIFFERENCE TO THEM FOR PROPERTY

TAXES AND WORKER COMP IS

$600,000 TO STAY IN ILLINOIS.

THAT IS HUGE.

SO WHY IS THAT IMPORTANT?

BECAUSE WE NEED TO MAINTAIN OUR

TAX BASE AND NOT SHRINK IT AND

WE WILL SHRINK OUR TAX BASE.

>> AND THE PEOPLE WHO MAKEUP THE

CIVIC COMMITTEE ARE PEOPLE WITH

ENORMOUS BUSINESSES WHO ARE

STAYING IN ILLINOIS.

THEY ARE NOT MOVING THE

MERCANTILE EXCHANGE AND NOT

MOVING MAJOR BANKS.

THEY ARE HERE AND THEY ARGUE

THERE ARE OFFSETS IN ILLINOIS

THAT YOU ARE NOT GOING TO BE

ABLE TO GET IF YOU MOVE TO

ANOTHER STATE.

RIGHT NOW, DO YOU THINK WE ARE

GOING TO HAVE A BUDGET BY MAY

31?

>> I HOPE SO.

WE NEED A BUDGET.

IT'S THE MOST IMPORTANT THING WE

CAN DO BECAUSE WE NEED

CERTAINTY.

WE NEED TO LET OUR ORGANIZATIONS

AROUND THE STATE THAT RELY ON

FUNDING HUMAN SERVICES, SCHOOLS,

HIGHER EDUCATION ET CETERA AND

NEED TO LET OUR BUSINESSES KNOW

WHAT TAX STRUCTURE THEY CAN

EXPECT.

BUT BANKS CANNOT PICK UP AND

MOVE EASILY.

BUT THE BUSINESSES CAN.

SMALL BUSINESSES ARE

MANUFACTURERS AND THEY HAVE.

AND THERE ARE EMPTY STOREFRONTS

ALL OVER COMMUNITIES ALL

SURROUNDING THE PERIMETER OF THE

STATE BECAUSE THEY HAVE CHOSEN

TO MOVE OUT OF STATE.

SO WE CAN CONTINUE DOWN THIS

PATH OF SOLVING THIS ONLY VIA

TAXING OUR BUSINESSES --

>> BUT IF WE DON'T FUND

EDUCATION.

IF WE DON'T HAVE HAVE HIGHER

EDUCATION SUPPORTED AND

SECONDARY AND PRIMARY SUPPORT IN

THIS REPORT, SUGGESTS SPENDING