A Tale of Two Amendments

Proposed Amendment HRJCA 49 to the Illinois Constitution will be on the ballot this November. This amendment would require a three-fifths majority for any unit of government to increase a pension or retirement benefit for workers. Below the fold, reasons why this amendment is a bad idea, and news on a better one in the works for 2014.
Glen Brown gives a long list of reasons to vote against this amendment. In short, the amendment makes it harder for working people to bargain for better benefits. This is not only bad economics, as it's middle-class workers that drive the economy, but it's just plain unfair. Working people didn't cause Illinois' debt crisis. It was the result of decades of mismanagement where politicians raided pension funds to pay for other spending.

Moreover, the way in which the amendment is written is unclear, probably deliberately so. Would regular cost-of-living increases be considered as benefit increases and hence voided unless approved by a supermajority of legislators? We don't know. This and other questions would need to be fought over in court.

Contrary to what wingnuts always claim, Illinois' problems aren't caused by overspending. We spend less than we did twenty years ago (when numbers are adjusted for population growth and inflation) in every key area. Our relatively prosperous state is near last in statistics like the percentage of education funding provided by the state. We don't have a spending problem, we have a revenue problem. Spending has already been slashed to the bone, to the point where bridges are falling down, property taxes are going way up, teachers are striking, and people dangerously in need of mental health care are running around unsupervised.

Moreover, our problems are structural. Even if we somehow managed to cut spending to the point where our current revenues could pay for it this year, they wouldn't be able to next year, since revenues are growing more slowly than expenses.

So we need structural change, and the Center for Tax and Budget Accountability has analyzed the numbers and come up with several recommendations, one of which is for a graduated state income tax. Read the entire report at the link, but the upshot is we could be bringing in billions in new revenue while giving the bottom ninety-four percent of taxpayers a break. CTBA also recommends extending sales tax to services, not just goods, as the former sector of the economy is growing much faster than the latter.

But a graduated tax would require amending the Constitution. The Illinois League of Women Voters along with the CTBA is organizing to get such an amendment on the ballot for 2014. Let's all get behind this.

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