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Governors look to gain from Illinois tax hikes

Chaaron Pearson on Thursday, January 20, 2011 at 12:00:00 am 

As Governor Pat Quinn signed a new law raising personal and corporate taxes in Illinois on January 13, other governors began to salivate over the idea of poaching business from the Prairie State.

The Illinois personal income tax rate rose 67 percent to 5 percent, up from 3 percent.  The corporate income tax rate rises to 7 percent, up from 4.8 percent.  These increases are expected to stay at this new level for four years and then are scheduled to decline.  The tax hike was pushed through at the end of the lame-duck legislative session to fill a $6 billion hole in the state budget, pay old bills and send more money to schools.

Republican governors around the country have seen this move as a sure-fire way to run business out of Illinois, and they hope to capitalize on it.  New Jersey’s Governor Christie has said that he plans to visit Illinois in efforts to move those businesses to New Jersey. Indiana’s governor compared Illinois to “The Simpsons” and Wisconsin has already launched a campaign for firms to “Escape to Wisconsin.”

The Christian Science Monitor points out that Indiana and Wisconsin would have to lower their corporate income tax rates to gain an upper hand on Illinois as both states still have a higher corporate tax rate than their neighbor.

To read more about the Illinois tax hikes, visit:

            Govs see opportunity in Illinois tax hikes – Stateline.org

            Quinn signs tax hike into law – Chicago Tribune

            Illinois tax hike: Will businesses flee to Wisconsin? – CSMonitor.com

The Illinois Chamber of Commerce has been following the issue closely as noted in their Government Affairs Report.  Visit their suggested links for more information on the tax increase:

            Fox News Chicago: Indiana Governor Mitch Daniels: Illinois is like the Simpsons
            USA Today: Illinois Enacts Tax Increases to Cut $15 Billion Deficit
            San Francisco Chronicle: Illinois Governor to Seek $8.75 Billion Bond for Overdue Bills
            WREX: Some Illinois Businesses Could Go North Because of Tax Hike
            Chicago Sun-Times: Wisconsin Gov Likes Illinois Tax Hike
            Chicago Tribune: Goodbye, Jobs

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Blog Series: Changing of the Guard - Wisconsin

Chaaron Pearson on Thursday, January 13, 2011 at 12:00:00 am 

The 2010 election that swept the GOP into the majority in the U.S. House also brought about big changes in governor’s mansions and state legislatures.  Over the coming weeks, ACCE’s Policy Clearinghouse Blog will highlight some of the states that had significant change in political power after the 2010 elections.  We’ll talk with chambers to find out what opportunities and challenges they anticipate with the new state administrations.  First up is Wisconsin.

Wisconsin saw big electoral changes in 2010.  Democrats lost control of the Governorship and both houses of the legislature.  With a solid mandate from the electorate, new governor Scott Walker has ambitious plans for the Badger State.  I spoke to a few of our chamber friends in Wisconsin to see how they feel about the election results and what lies ahead for their policy agendas.

Steve Baas, Metropolitan Milwaukee Association of Commerce (MMAC) Government Affairs Director, feels good about the new administration and the new legislative leadership.  They are looking forward to a broad shift in philosophy to one focused on empowering entrepreneurs and relying on the free market to create jobs, economic development and wealth.  That holds great opportunity for fundamental changes in the tax, regulatory and litigation climate in Wisconsin that MMAC has supported for years. 

Kevin Little, Director of Public Policy at the Greater Madison Chamber of Commerce, says that they are optimistic, but also anticipate some challenges ahead.  They are encouraged by some of the job creation proposals being lead by incoming Governor Scott Walker and other state leaders.  Some of the proposals include a change in the state’s commerce department, new and expanded tax credits for business expansion and other regulatory and legal changes to protect businesses.

Little does raise a potential challenge that his community might face with the change in power.  Madison is home to the state’s flagship university, which is also one of the top research universities in the country.  They have earned that reputation thanks to the medical research on campus; some of which – like embryonic stem cell research – can be controversial.  They do anticipate legislative efforts to restrict this research, which the chamber will strongly oppose.

Baas sees the biggest challenge facing the new administration is finding way to balance the budget in the face of a $3 billion deficit left by their predecessors.

Like with any administration, Little says that the Madison Chamber can’t predict total agreement, but they are pleased that the first order of business is jobs and finding ways to ensure that Wisconsin is a place that grows and retains businesses. 

Bass and the Milwaukee chamber are looking to play more offense and focus on moving their agenda items forward.  Though their agenda remains fundamentally the same because it is driven by issues and not ideology, this political landscape could prove to be favorable.

A long time member of ACCE, Paul Jadin, President of the Green Bay Area Chamber of Commerce and former mayor of Green Bay, will be leaving his post in late January to join the new administration as Wisconsin’s newest Secretary of Commerce. 

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More on H.R. 2

Chaaron Pearson on Tuesday, January 11, 2011 at 12:00:00 am 

H.R. 2 is a very short bill that is a straight-forward call for repeal of the health care reform bill. Text of Bill (2 pages) 

In conjunction with H.R. 2, the house is looking at H. Res. 9 (a resolution, text here).   H. Res. 9 tasks the Committee on Education and Workforce, the Committee on Energy and Commerce, the Committee on the Judiciary, and the Committee on Ways and Means to propose changes to the existing health reform law that fall within each committee’s jurisdiction.

What to watch: Oklahoma should be filing a lawsuit within the next few weeks to challenge the healthcare reform law.  They will be focusing on the individual mandate requiring citizens to have health insurance by 2014.  Also watch out for Dan Lungren’s bill, H.R. 144, which would repeal the 1099 provision in the new healthcare law that requires reporting to the IRS on payments to corporations of more than $600.

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Oregon: Transforming Healthcare

Chaaron Pearson on Monday, January 10, 2011 at 12:00:00 am 

While this week’s scheduled vote on H.R. 2 has been postponed due to the tragedy in Arizona involving Congresswoman Giffords, the newly seated Congress is moving forward with efforts to repeal 2010 healthcare reform.  Meanwhile, Oregon is looking to tackle healthcare reform in a different manner.

Elected to an unprecedented third-term, having previously served as Oregon’s governor from 1995-2003, John Kitzhaber has vowed to change the way healthcare is organized and delivered in Oregon.

Kitzhaber is no stranger to Oregon’s healthcare system as a politician, but he also has first-hand experience as an emergency room physician. He believes that this gives him a unique perspective in which to view policies and their applications. 

Kitzhaber is looking to focus Oregon’s healthcare system on prevention and wellness.  He has announced a new Health Policy issue manager and health care team and has charged them to recommend ways to implement a new efficient and effective system.

“Oregon business leaders are watching the new Oregon Health Care Authority closely,” said Jason Brandt, Chief Operations Officer of the Salem Area Chamber of Commerce. “Although the intentions are good, the new health care authority has the potential to be extremely costly to employers and counterproductive to the goal of creating more job opportunities for Oregonians.”

To read more:  Kitzhaber’s interview with Stateline.org

                      Health Care Transformation in Oregon

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2010 Policy Clearinghouse Blog: Year in Review

Chaaron Pearson on Thursday, December 30, 2010 at 12:00:00 am 

2010: Policy Blog Year in Review

As this year draws to a close, here is a look back at a few of the news makers in 2010:

Prison Reform: Sentencing and Spending
Thanks to a partnership with the Pew Center on the States, ACCE has focused on the penal system and the impact of sentencing and prison spending on state budgets.  Look for more information to come from states (like Indiana) that have focused on reviewing their state’s prison system.  To read more about Indiana: Prison Study Recommendations Endorsed by Governor

Previous Prison Reform Blog Posts:
            Increasing Demand for Corrections Reform – September 20, 2010
            Indiana to Review Sentencing Policy and Prison Spending – July 14, 2010

Public Pensions
Another heavily debated topic was the impact of public pensions on state budgets.  Expect to hear more about this in 2011 as state budgets continue to tighten.

Previous Public Pension Blog Posts:
            Schwarzenegger Weighs in on Public Pensions – August 30, 2010
            Chicago Suburb Examines Public Pensions – August 27, 2010
            Testing Public Pension Options – August 27, 2010

Arizona Immigration Law
The passage of the Arizona Immigration Law was one of the most controversial stories of 2010 and it looks like 2011 could bring similar laws in more states.  According to a study by the National Immigration Forum (who is against Arizona’s immigration legislation), seven states are “likely” to pass a law similar to Arizona’s in the coming year.  To read more: States could follow Arizona on immigration.  Complete Report: National Immigration Forum

Previous Arizona Immigration Law Blog Posts:
            Utah Compact on Immigration – November 18, 2010
            AZ Laws Spreading, Rhetoric Heating Up – July 9, 2010
            Time to Tackle Immigration Reform – May 27, 2010

Healthcare Reform
2010 has been a historic year for healthcare.  Between the passage of the reform bill, the Virginia court ruling and the pending healthcare lawsuit in Florida, healthcare will be a topic that carries far into 2011 and beyond.

Previous Healthcare Blog Posts:
            VA Court Finds Provision of ObamaCare Unconstitutional – December 14, 2010
            Healthcare Reform Resource – June 10, 2010
            3 Words on Healthcare – April 2, 2010

           

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Private-School Vouchers Making a Come-Back

Chaaron Pearson on Wednesday, December 22, 2010 at 12:00:00 am 

Although private-school vouchers were noticeably absent from Bush’s No Child Left Behind legislation and Obama’s Race to the Top grant, they are making a comeback led by newly elected governors in Florida, Nevada and Wisconsin. 

Vouchers are nothing new in Florida, but governor-elect Rick Scott’s proposal is the most extensive of the new plans.  Scott wants to create “education savings accounts” that would help pay private-school tuition for any student in the state, not just low-income students.  With Florida in the spotlight for school reform, the Washington Post’s Valerie Strauss interviewed Professor Sherman Dorn of the University of South Florida to discuss the Jeb Bush package of educational reforms and their impact.  To read more visit - The Answer Sheet.

Milwaukee paved the way for large-scale private-school vouchers in 1990 and Wisconsin’s governor-elect is looking to expand the Milwaukee voucher program.  The U.S. Department of Education’s Institute of Education Science has used Milwaukee’s system to research the impact of the voucher system on education.  Visit the Institute of Education Sciences' What Works website for the results of their research.   

Nevada’s governor-elect hopes to pass a constitutional amendment to the state constitution that paves the way for private-school vouchers, but he is meeting some resistance from the state schools superintendent.  To read more: Nevada School Chief Calls Vouchers Too Costly

To read more: Private-School Vouchers Return to Education Agenda

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VA Court Finds Provision of ObamaCare Unconstitutional

Chaaron Pearson on Tuesday, December 14, 2010 at 12:00:00 am 

Yesterday, a federal district court in Virginia ruled that the individual mandate, the regulation that requires the purchase of health insurance under penalty of fine, in Obama’s healthcare plan is unconstitutional. 

In his opinion, Judge Hudson points to the Commerce Clause as the root of this case.  He argues that the justice department cannot maintain that the mandate is essentially a tax when the bill imposes a penalty for those that fail to purchase health insurance.  He said that no court has ever extended Commerce Clause powers to require an individual to involuntarily purchase a commodity in the private market.

Both sides of the issue can claim a bit of victory or defeat as Judge Hudson’s ruling has only found the individual mandate portion of the healthcare bill unconstitutional and he didn’t enjoin the law’s implementation pending appeal.

To read more: ObamaCare Loses in Court

In related healthcare news, Vermont’s governor-elect, Peter Shumlin is looking into a single-payer health system for the state.  William Hsiao, a Harvard economist, and Jonathan Gruber, an M.I.T. economist, were charged with researching how a single-payer system would work in Vermont.  Hsiao is credited with designing Taiwan’s single-payer system, while Gruber was one of the minds behind Massachusetts’ health care system and the federal health care reform bill.

One issue that Vermont will be testing is the power of the state government to push all private insurance companies out of its state.

To read more: In Vermont, single-payer health care in a single state

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Politics of State Spending Cuts

Ian Scott on Monday, November 29, 2010 at 11:01:45 am 

Last week the Wall Street Journal ran an interesting profile of Mississippi Governor Haley Barbour focused on the state budget.  During his two terms in office, Barbour has earned track record of cutting spending across the board.  He has made cuts six times since 2009.  At a Republican Governors Association meeting earlier this month he said, "Anyone who says there isn't a part of state government that can't save money doesn't know what he's talking about."

Barbour enjoys high approval ratings in Mississippi but as the term-limited governor weighs a potential presidential bid a question looms – will his reputation for trimming the fat out of state spending be an asset or liability?

Read more: State Tests Limits of Spending Cuts

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Utah Compact on Immigration

Ian Scott on Thursday, November 18, 2010 at 5:52:49 pm 

Debate is raging over the Utah Illegal Immigration Enforcement Act (UT-IIEA), a proposal that mirrors the controversial immigration bill that passed in Arizona last year.  Highway patrolmen had to break up clashing protestors from both sides of the issue at the state capitol yesterday.

To weigh in on the debate, the Salt Lake Chamber joined forces with other community, political and religious leaders to release the Utah Compact. The Utah Compact is a set of five core principles that supporters believe should guide immigration reform.  The five principles are:

  • Federal Solution - Immigration is a federal policy issue between the U.S. government and other countries—not Utah and other countries.
  • Law Enforcement  - Local law enforcement resources should focus on criminal activities, not civil violations of federal code
  • Families - We oppose policies that unnecessarily separate families
  • Economy - Utah is best served by a free-market philosophy that maximizes individual freedom and opportunity. We acknowledge the economic role immigrants play as workers and taxpayers.
  • Free Society - Immigrants are integrated into communities across Utah. The way we treat immigrants will say more about us as a free society and less about our immigrant neighbors.

At a public announcement of the Utah Compact last week, Salt Lake Chamber president and CEO Lane Beattie said:

“There is no simple solution with an issue like immigration.  Any immigration legislation will have a ripple effect that touches the economy, families and the perception of our state across the world. Crafting a solution that adheres to these five principles will ensure those consequences are considered and that changes to immigration law reflect the values of our state.”

You have to applaud the Salt Lake Chamber’s proactive, public work on this highly charged issue. Read more about the Utah Compact at: www.utahcompact.com

For more about the Arizona immigration bill that inspired UT-IIEA, check out my interview with Tucson Chamber CEO Jack Camper from May 2010.

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Victories to Celebrate

Ian Scott on Monday, November 15, 2010 at 5:43:22 pm 

Many chambers were happy when results from ballot measures came in on Nov 3.  Here are few reasons for state and local chambers to celebrate:

  • Chambers across Florida celebrated when Amendment 4 (Hometown Democracy) failed at the polls.  The measure would have mandated voter approval to change city, town and county comprehensive land-use plans, effectively halting growth by bogging down all zoning changes.  Read more here.
  • In Oklahoma, the chamber community notched a victory when a school funding initiative, referred to as Question 744, was rejected by 80% of voters.  The measure would have mandated that the state fund public education to at least the per-pupil average of their six neighboring states.  Read more here.
  • The Seattle Chamber and other business organizations in the Evergreen State applauded as Initiative 1098, the state’s first income tax measure, was defeated.  Read more here.
  • Charleston, SC voters joined the chamber in supporting a six year 1 cent sales tax to rebuild and repair public school buildings.  Thanks to the chamber’s campaign, the measure passed by a comfortable 64%.  Read more here.
  • Charlotte, NC voters also voted with the chamber to support three bonds totaling $204 million for transportation, neighborhood improvements and affordable housing.  Read more here.

Is your chamber still celebrating a victory at the polls?  Leave a comment and tell your peers about it.

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