Senate Week In Review

May 1, 2014

Senator Kyle McCarter: Senate Week In Review

The two-week Spring/Easter/Passover break is ending with the Legislature due back at the Capitol on Tuesday, April 29. But, the brief breather from general legislative activity was not without its news-making issues and topics including waste and abuse, which led to the loss of millions of your tax dollars; an organized propaganda march toward higher taxes in Illinois; and the state’s continued economic weakness.

$12 million dollars of your money

We learned this past week that Illinois government paid out $12,000,000 in Medicaid benefits to about 3,000 deceased residents. The information was reported by a number of media outlets in the state and across the country. It’s a troubling development for a number of reasons. First of all, Medicaid is an important program that provides medical services to lower-income residents. Paying out benefits to those who should not receive them takes away resources for those who do need and qualify for the program. Secondly, it’s an obvious waste of your hard-earned money and $12 million is no small amount. It’s also troubling because in 2012, the Legislature acted in a bipartisan way to reform the Medicaid program to reduce and eliminate this kind of waste and abuse. The reform included using a private firm to go through the Medicaid eligibility rolls and remove those who no longer qualify for the benefits.

Unfortunately, the Quinn Administration has undermined those efforts since the reform became law. The original estimate was that Illinois taxpayers expected to save about $350 million each year. But instead, you and I were handed a bill for waste and abuse that may be just the tip of the iceberg. Governor Quinn says the state has recovered about $7 million but that still leaves you and me holding the bag for the remaining $5 million but there may be more waste out there we don’t know about. The Belleville News Democrat correctly stated in a recent editorial that Illinois’ Medicaid program inspires no confidence in how state government manages our money. This is one more reason for a Forensic Audit, which I have called for since I first came to Springfield. Credit the media for uncovering this mismanagement. It was an internal state government memo obtained through a Freedom of Information Act request which revealed that auditors found the Illinois Medicaid program has paid out an estimated $12 million for medical services for people listed as deceased in other state records.

Pro-tax Propaganda

With a clear indication that state government is wasteful with your tax dollars, how happy are you with the efforts underway for more and higher taxes? During the two week break in April, the Senate committees which deal with budget issues continued to meet. The hearings have been nothing short of a public platform for “Chicken Little – The sky is falling” pleas from state agencies and Democrat lawmakers in hopes of pushing a we-need-more-money argument to justify extending their 2011 “temporary” state income tax increase. That increase cost the average Illinois taxpayer a week’s salary each year. But the propaganda machine is in high gear to convince us the 67% increase in state income taxes should continue past January 1, 2015 when it is scheduled to begin a roll back as originally promised.

It’s never enough

State government has collected about $26 billion ($26,000,000,000) in additional tax revenue over the past 3 years and according to those in charge that’s still not enough. Despite all that new revenue, Illinois still faces billions of dollars in budget red ink and billions more in overdue bills. Does that failure and the failure revealed in the Medicaid waste story, justify giving state government more of our hard-earned wages? Yet, the call for more taxes and higher taxes is still being heard in the halls of the Capitol. There have been no less than 15 separate proposals introduced this year to increase your taxes ranging from new tax rates on your income to taxes on our domestic energy industry to tobacco taxes and small business taxes to taxes on satellite television and sugary drinks.

Tax Day, April 15, 2014 has come and gone but not the memory of the taxes we paid. According to the non-partisan Tax Foundation, Tax Freedom Day is the day when the nation as a whole has earned enough money to pay off its total tax bill for the year. Nationally, Tax Freedom Day is April 21 but NOT in Illinois. In Illinois, Tax Freedom Day is Monday, April 28, a full week after the nation as a whole. With the 67% state income tax increase of 2011, is it no wonder Illinois is behind the rest of the nation? The table above explains it all:

Illinois economy continues to struggle

On the economic front, Illinois’ economy continues to struggle. According to a March 2014US Bureau of Labor Statistics report, Illinois employment numbers have improved slightly. Illinois no longer has the second worst unemployment. However, it’s nothing to brag about. We’ve slipped to third-worst surpassed only by Rhode Island and Nevada. Unfortunately, Illinois still has the worst unemployment rate in the Midwest.

Our unemployment stands at 8.4 %, down from 8.7% in February. I am concerned over the continued talk in Springfield about higher taxes. This week we learned that Illinois-based Walgreens may be considering moving to Europe to take advantage of lower tax rates. The Fiscal Times reported that some Walgreen’s shareholders want to the company to move across the Atlantic to reduce its US tax burden. According to the article, Walgreens’ U.S. tax rate is 37.5% but could be as low as 20% if it moved to Switzerland where it owns half of the Swiss company Alliance Boots. Don’t forget, that 67% state income tax hike in 2011 also included a 47% tax hike on business income. Higher taxes make it harder for Illinois companies to compete with businesses in other states or around the world. Corporations cannot always pass on the cost of doing business to their customers.

Let’s get off the Freeway of Failure

Inefficient government inflicts harm on us all. It harms taxpayers who ultimately pay the bills and, over-taxation and over-regulation makes it harder for employers to create jobs and compete. Inefficient government also hurts those who need government services by reducing critical resources for Medicaid and other social safety nets for lower income citizens or for education and public safety, which benefits all of us.

As lawmakers head back to the Capitol to begin the final month of the spring session, I hope the final version of a state budget that is still being debated will be more like the responsible behavior of hard-working Illinois families rather than that of the big-spenders of the past 10 years who have brought our state to near financial ruin. Illinois must learn to live within its means. We cannot tax our way to prosperity and opportunity.