House Speaker Welch backs off graduated tax move, talks pension reform

He toned down talk that Illinois voters soon again may be asked to allow a graduated-income tax, but notably waded into another hot issue, declining to reject out of hand the possibility of amending the Illinois Constitution to limit government worker pension benefits.

He defended the record of predecessor Mike Madigan, but also conceded that lawmakers need to act to restore public faith in the Legislature.

Those were the highlights as new Illinois House Speaker Emanuel “Chris” Welch sat down for an hour-long virtual interview in a webcast co-sponsored by Crain’s and the Lincoln Forum.

At the top of my list as moderator was asking Welch how serious he was when he suggested during an interview earlier in the week with the Economic Club that officials take another run at enacting a graduated income-tax amendment, one that would dedicate much of the proceeds to paying off $144 billion in state pension debt.

Welch described that as “spitballing,” saying he only was talking about what might happen “if” the subject returned again. Welch said the General Assembly will “probably not” revive the issue this spring, in time for a new referendum in 2022. But he also described the state’s current tax code as “unfair to working families,” a suggestion he’d still like to see some change.

The graduated tax is closely tied to the issue of somehow finding a way to begin reducing the state’s pension debt, which keeps increasing even as the state contributes more than $9 billion a year out of its operating account to pay retirement costs.

Asked if the problem can be handled with more money or whether it also will require spending cuts, Welch replied, “The ultimate solution is likely to be a variety of things.”

Asked a bit later if that might include amending the state Constitution to allow benefits cuts—a move some lawyers say is legal but which organized labor vehemently opposes—Welch declined to take a position. “Let’s have a conversation about it,” he said.

Welch declined to elaborate. It’s not clear whether he really is open to the possibility of such an amendment, or is just being cautious as he learns his new job.

The new speaker was quite gracious in describing the tenure of his predecessor, Madigan, who served as speaker for nearly four decades, the longest of any legislative leader in U.S. history, before being forced out amid the Commonwealth Edison bribery scandal.

“I honestly believe Illinois is (Democratic) blue because of Mike Madigan’s strong leadership,” Welch said, emphasizing that Madigan “protected our core constituencies” during the Bruce Rauner governorship despite intense personal and political attacks.

Still, Welch continued, “I have a different life experience” as an African-American man from Hillside, having grown up in a household so poor that he sometimes had to get his meals at the local church.

A major ethics package is needed for the Legislature and one will be approved this session, Welch said. Likely included will be limits on lobbying and more economic disclosure, with other changes possible. “We need to rebuild trust in the Legislature,” he said.

In other comments, Welch, a former school board member, made it clear he supports legislation to begin electing members of the Chicago Board of Education, but said details as to how big it would be and what qualifications candidates should have remain under review. 

He offered a little bit of hope for business groups fighting $932 million in “corporate loophole closings” that Gov. J.B. Pritzker has proposed as part of his fiscal 2022 budget. But not too much hope. “There are many things I agree with (on Pritzker’s list). There are some things I disagree on,” Welch said. What’s really needed to turn around the state’s economy is investment in things such as higher education, he added.

The new speaker in strong, even emotional terms defended the state’s new criminal justice reform package that was enacted last month.

Some portions of the measure have drawn some fire, such as a provision banning cash bail. Welch termed that “fear mongering,” saying it’s just not right that a poor but innocent person accused of theft is locked up because he or she doesn’t have $500 for bail while Kenosha shooter Kyle Rittenhouse, who is accused of murder at a Black Lives Matter protest, is walking free “because he was able to make bail.”

Welch said some further changes in the law are needed, but did not get specific, saying they’re still being developed.

via Crain’s Chicago Business

February 26, 2021 at 03:28PM

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