Ohio: ATR Supports Ending Collective Bargaining for State Employees
Today the Ohio Senate will begin debating SB 5, a bill sponsored by Sen. Shannon Jones that will eliminate the ability of state government employees to collectively bargain. With an $8 billion overspending problem driven largely by public sector unions' perpetual push for salary, wage, benefit and pension increases, this is an imperative first step toward restoring Ohio's fiscal sustainability.
It's no secret that Ohio has hemorrhaged jobs and population over the past decade. It is one of two states, along with New York, that will lose two Congressional seats in this round of decennial reapportionment. But where the private sector has declined, the government payroll has flourished. The Buckeye Institute has pointed out that state employees earn more than their private sector counterparts in 85 of Ohio's 88 counties. By scaling government pay back to the private sector average, Buckeye notes, the state can close $2.1 billion of its budget hole without raising taxes.
Unions around the state have flocked to Columbus to intimidate elected officials into opposing SB 5. But as Grover pointed out in a letter to the legislature today, they make emotional arguments devoid of logic and reality:
I know that you have been under considerable pressure and intimidation from union bosses across the state. Know that their emotional arguments do not reflect reality. Eliminating state teachers unions will not impede a child’s right to a sound education – it is the obligatory first step to ensuring quality education for all. Removing the ability of police and fire unions to secure unsustainable pension benefits will not compromise public safety – restoring these programs to sound fiscal footing will preserve public safety in Ohio for generations.
To read the entire letter, see below.
February 15, 2011
Today I write in fervent support of Senate Bill 5, which would eliminate collective bargaining for state employees. By shifting the balance of power from unions back to taxpayers, this bill represents the type of sweeping change imperative to Ohio’s economic resurgence.
Ohiocan no longer afford public sector unionization. Government employee compensation costs are the driving force behind the state’s $8 billion overspending problem. Unionization has effectively shielded the public sector from the economic downturn. Data compiled by the Buckeye Institute is harrowing: Over the past 20 years, state government has added 93,000 jobs, while Ohio’s private sector has added only 120,000. And state government employees live considerably larger: The median public employee earns 25 percent more than his or her private sector counterpart.
Public sector compensation must be brought in line with the private economy. But that cannot happen until government employees are stripped of their collective bargaining rights. I know that you have been under considerable pressure and intimidation from union bosses across the state. Know that their emotional arguments do not reflect reality. Eliminating state teachers unions will not impede a child’s right to a sound education – it is the obligatory first step to ensuring quality education for all. Removing the ability of police and fire unions to secure unsustainable pension benefits will not compromise public safety – restoring these programs to sound fiscal footing will preserve public safety in Ohio for generations.
I commend Sen. Shannon Jones for sponsoring SB 5. It reflects her understanding that Ohio voters and taxpayers are ready to engage in an adult conversation about the true size and scope of Ohio’s budget problems. Government unions are the most significant impediment to Ohio’s economic growth.
We do not wish to demonize or embarrass government employees. Many of them do important and diligent work in the name of public service. Teachers, fire fighters and police officers dedicate their lives to improving and protecting our civil society.
But that does not mean they should be empowered to hoodwink taxpayers in securing unreasonable and unaffordable compensation packages with little accountability to those footing the bill. And that is exactly what public sector unions have done for three decades. It’s time to restore Ohio to sound financial footing, and SB 5 is the first step.
If you have any questions regarding ATR’s support of SB 5, please contact Ohio state affairs manager Joshua Culling at firstname.lastname@example.org.
CC: The Honorable John Kasich
Norquist Statement on Georgia Tax Reform Council Changes
On February 1, the Georgia tax reform council reconvened at ATR's request to issue an amendment to their original plan to force revenue neutrality. The amendment passed unanimously. ATR President Grover Norquist issued the following statement:
"I am pleased with Chairman Frazier's decision to reconvene the tax reform council for a vote to force revenue neutrality. The legislature is now charged with producing an overhaul of the state's tax structure to a more pro-growth system that does not grow state government. We recommend achieving this by the removal of certain tax increases that fall outside the realm of 'base broadening' while simultaneously bringing marginal tax rates down to a level necessary to achieve revenue neutrality.
"We applaud the council's good-faith efforts to improve their proposal, and look forward to examining the final piece of legislation. Any bill that is at least revenue neutral will be in compliance with the Taxpayer Protection Pledge that 55 Georgia lawmakers have signed.
I further commend Governor Nathan Deal for his stated opposition to tax increases and his leadership on behalf of Georgia taxpayers."
ATR Clarification on Georgia Tax Reform Council
Last week, the Atlanta Journal-Constitution wrote a misleading piece on Grover's meeting with Georgia tax reform council chairman A.D. Frazier. A letter of clarification follows. For a PDF, click here.
January 31, 2011
I write to clarify a misleading piece in last week’s Atlanta Journal-Constitution regarding the 2010 Special Council on Tax Reform and Fairness for Georgians.
In his Friday, January 28 piece (“Tax consensus forged in private meeting”), Chris Joyner stated that I “gave cover” to the tax council’s recommendation of a $1 billion tax increase last week. This is untrue.
There are 55 Georgia elected officials who have signed the Taxpayer Protection Pledge, a written commitment to oppose all tax increases. At Americans for Tax Reform, we administer and maintain the Pledge, informing signers as to whether a specific piece of legislation is in keeping with that promise. On January 10, we informed you that a vote in support of the tax reform council recommendation is a vote for over $1 billion in higher taxes, and thus a violation of the Pledge.
That remains true today. The good parts of the reform package – reductions in marginal tax rates – are more than offset by base-broadening tax hikes. This is the Ted Kennedy school of “tax reform”: providing rhetorical cover for the growth of government. In a meeting with A.D. Frazier and others invested in tax reform for Georgia, I urged the council to adhere to the Ronald Reagan school: reducing marginal rates in a way that is at least revenue neutral, if not an pro-growth net tax cut. Tax reform does not require raising taxes.
Chairman Frazier assured me that he is committed to altering the proposal to achieve revenue neutrality. Should that happen, the council’s recommendation will be Pledge compliant. A statement of intention does not go far enough, though. It is incumbent on the council to either remove tax increases or further reduce marginal rates until the proposal is revenue neutral. When a final bill is filed with the legislature, we will examine it and inform lawmakers of its Pledge implications.
I was pleased with my conversation with Chairman Frazier and feel that the council is truly interested in revenue neutral pro-growth tax reform. Its initial proposal missed the mark; we look forward to supporting whatever serious reform they put forward after the council reconvenes.
CC: The Honorable Nathan Deal
2010 Special Council on Tax Reform and Fairness for Georgians
ATR to Maine Legislature: No Tobacco Tax Hike
Predictably, the tax-loving American Lung Association is pushing for a massive 75 percent increase in Maine's cigarette tax. They just think it's the cat's meow, curing all diseases while raising a boatload of money for state government to spend on pro-utopia policies.
Of course, that's not how these things tend to work themselves out. For starters, Maine desperately needs jobs. An excise tax increase of this magnitude certainly will not deliver. Convenience stores count on tobacco products for roughly one-third of their sales. Government driving up the cost of cigarettes won't help maintain payroll.
That's because higher taxes will only further fuel migration to New Hampshire, where consumers will be able to save over $12 per carton of cigarettes. New Hampshire also levies no sales or personal income taxes. To have any hope of competing with its neighbor, any talk of tax increases must be completely off the table.
That's why we're thankful for Governor Paul LePage. He has signed the Taxpayer Protection Pledge, a firm commitment to veto any tax increase that reaches his desk. In fact, LePage campaigned on cutting the cigarette tax, an acknowledgment that states compete for jobs and commerce -- and Maine has been on the losing end in recent years.
ATR wrote a letter in opposition to any tobacco tax increases and in support of lifestyle tax cuts on tobacco and alcohol. To see it, see below. For a PDF, click here.
January 27, 2011
I write in strong opposition to a proposed tobacco tax increase in Maine. Voters sent a strong message to Augusta last November, urging responsible spending restraint in the wake of years of fiscal irresponsibility. A cigarette tax increase would hit small businesses and the poor during a period of sustained economic uncertainty.
Mainealready operates at a massive tax disadvantage to neighboring New Hampshire. New Hampshirelevies no taxes on personal income or sales, and its cigarette tax is the lowest in New England. A proposed $1.50 per pack increase in the cigarette tax would only exacerbate Maine’s tax gap. The impact will be absorbed by convenience stores, for whom tobacco products constitute nearly one-third of sales. When consumers are given the opportunity to save over $12 per carton by crossing the border into New Hampshire, Maine’s job providers will take a serious hit.
So state coffers. By increasing taxes on a declining revenue source, Maine can expect a serious shortfall. Such has been the case in other states: Between 2003 and 2007, over 70 percent of state cigarette tax increases failed to yield the projected revenue. Last year in Washington, D.C., a 50 cent per pack increase in the cigarette tax resulted in a 20 percent decrease in tax revenues.
I encourage you to adopt the position Gov. LePage advocated during last year’s campaign: a reduction in lifestyle taxes on tobacco and alcohol. These are among the least stable sources of revenue for state government. They are regressive, and explicitly drive commerce and jobs across state lines. It is time for Maine to compete with New Hampshire, rather than continue to export economic growth and prosperity.
Gov. LePage and many in the legislature have made a firm commitment to oppose all tax increases by signing the Taxpayer Protection Pledge. It would essentially be a waste of time and state government resources to pass any tax increase to the governor’s desk, as he has promised a veto. I would instead encourage you to couple necessary spending reductions with net tax cuts in order to restore Maine to competitive footing within New England.
If you have any questions or are interested in joining Gov. LePage in signing the Taxpayer Protection Pledge, please contact ATR state affairs manager Joshua Culling at email@example.com.
Georgia Tax Reform Report a Taxpayer Protection Pledge Violation
Today Americans for Tax Reform announced that a vote in favor of the recommendations of the 2010 Special Council on Tax Reform and Fairness for Georgians would violate the Taxpayer Protection Pledge, as it constitutes a net tax increase. 55 Georgia lawmakers, including Governor Nathan Deal, House Speaker David Ralston, and Senate Majority Leader Chip Rogers have signed the Pledge, a written promise to constituents to oppose and vote against or veto all tax increases.
While the Council proposes some pro-growth reforms, such as the gradual reduction of personal and corporate income tax rates, they are more than offset with net tax increases. The income tax reductions amount to roughly $750 million in savings for Georgians, but tax increases on groceries, tobacco, communications services, the Internet and other services approach $2 billion. ATR believes that tax reform is a noble goal, but not when it constitutes a net revenue increase for state government.
ATR President Grover Norquist issued the following statement:
“In its current form, last week’s tax reform proposal should be a non-starter for fiscal conservatives in the Georgia Legislature. While tax reform is indeed a laudable goal, it should not be presented in a way that increases the net burden on taxpayers and raises even more money for state government. Unfortunately, this report recommends just that.
“A significant reduction in marginal tax rates is long overdue in Georgia, which is wedged between two states – Tennessee and Florida – that levy no personal income tax at all. But if the goal is to use such reductions to mask bigger tax increases on groceries, tobacco, and a variety of services, it is not even worthy of a conversation.
“This is akin to shards of glass in a delicious crème brûlée. It is a bit of desirable tax reform ruined by an overall tax hike. Thankfully, Taxpayer Protection Pledge signers run state government in Georgia. Because they have taken tax increases definitively off the table, I am confident that we can move past this initial foray into tax reform and begin a serious conversation about reducing the size and scope of state government in Atlanta.”
Norquist's Letter to the Illinois Legislature re: Insidious Back-Room Tax Deal
January 7, 2011
Last night’s reported deal between Gov. Quinn, Speaker Madigan and President Cullerton will be devastating to taxpayers and the state’s economy should it come to fruition. I urge you to oppose and vote against this combination of tax increases and massive debt for the good of the taxpayers, your state’s economy, and the democratic process.
The economic impact of this deal is well-known and has been discussed ad nauseum. A vote in favor of a 75 percent income tax increase and a 102 percent cigarette tax increase will cripple Illinois’ economy. Those complicit in this scheme do so willfully.
But equally depressing is the co-conspirators are executing such a back-room deal with no regard for democracy, transparency, or good faith. We are less than one week from swearing in the legislature voters chose to grapple with Illinois’ grave structural budget problems. Yet Democratic Leadership is hell-bent on ushering through a tax increase larger than anyone had previously imagined before that happens. They are expressly ignoring the will of the people.
It is true that Gov. Quinn campaigned on an income tax increase. And his 33 percent tax hike was shocking enough. But had he revealed his true intentions – a 75 percent broad-based income tax increase, a 102 percent cigarette tax increase, and billions of dollars in yet more borrowing – we would not be having this conversation today. This “compromise” is built on typical lies coming from typical politicians from typical Springfield, Illinois.
If any of you are considering supporting this deal because it comes with spending restraint, do not be fooled. The spending cap proposed by Speaker Madigan is a ploy to give cover to tax hikers, and does not represent reform in the slightest. This “cap” will take place under an inflated spending baseline, as it will go into effect years after the tax increases do. It exempts pension payments (not that Gov. Quinn has ever been keen on making them). And it allows for lawmakers to opt out in periods of fluidly-defined “emergency.”
By voting for this multi-billion dollar tax increase without even tackling the issue of the state’s unsustainable pension obligations or imposing a serious limitation on its spending trajectory, you are doing a disservice to the entire state for years to come. Don’t.
Great Night for Illinois Taxpayers!
Illinois Democrats were dead-set on raising the state's personal income tax by a whopping 83 percent. But in a stunning and miraculous turn of events, they decided to go easy on their already mightily-struggling constituents. In a deal reportedly reached tonight, Gov. Pat Quinn and legislative leadership decided to with a mere 75 percent income tax increase, coupled with a modest 102 percent cigarette tax hike that will gently nudge countless jobs across state lines and steal a disproportionate amount of impoverished Illinoisans' income with a wink and a smile.
The above, of course, is laced with sarcasm and disappointment. That's a $15 billion solution reached almost single-handedly by tax increases in a state with an unemployment rate hovering near 10 percent. This, shortly after the legislature sent an "Amazon tax" to the governor's desk that would completely eradicate an entire industry in the state. And mere months after both the legislature and the governor completely punted on any real spending reform and willfully ignored a mandatory pension payment.
Elections have consequences. And with all due respect to the Illinois electorate, they got it so, so wrong in November. Pat Quinn won re-election with 46.6 percent of the vote campaigning on a massive tax increase that the public overwhelmingly opposed, then fabricated a "mandate" to ram an even bigger-than-promised tax hike through a legislature with one foot out the door. Less than one week away from a new, slightly improved assembly, Quinn joins House Speaker Michael Madigan and Senate President John Cullerton in essentially thumbing his nose at the democratic process and getting his way just in the nick of time.
What does this mean for Illinois? A number of unfortunate things. The state's most prominent economic advantage, it's national-low 3 percent flat income tax is now history. Its competitive tobacco tax advantage is all but wiped out, eliminating convenience stores' and other small businesses' price advantage and the jobs it once brought. And, most importantly, it removes any necessity for meaningful, lasting spending restraint in Illinois. When politicians are allowed to treat taxpayers like Automated Tellers, there is zero incentive to be anything other than profligate and reckless.
Elected officials are attempting to affix the "temporary" tag to these tax increases. The Herald-News notes the time period for their "temporary" nature remains "fluid." That really says it all about Illinois electeds.
There is still time to stop them, of course. There has been no vote as of tonight. But if this deal holds, Illinois Democrats are a far worse lot than I could have ever imagined.
ATR Supports Supermajority Requirement for Tax Increases in Wisconsin
After his inauguration this week, Wisconsin Governor Scott Walker immediately called a special session of the legislature to consider his proposed supermajority requirement for tax increases. The bill would mandate a two-thirds vote to pass any increases in income, sales or franchise taxes.
Perhaps the nation's most famous such policy is in California, which passed a two-thirds supermajority requirement as part of legendary Proposition 13 in 1978. It has been an important tool in delaying, altering and some times outright stopping destructive Democratic proposals in the Golden State. ATR has recently supported a supermajority-proof bloc of Taxpayer Protection Pledge signers in fighting a tax-loving majority that would otherwise been handed a blank check.
Gov. Walker has already demonstrated his commitment to oppose and veto all tax increases; he is one of 14 governors who have signed the Taxpayer Protection Pledge. This bill further demonstrates his commitment to the cause. Authored by Rep. Tyler August in the Assembly and Sen. Leah Vukmir in the state Senate, this is a great first step toward divorcing Wisconsin politics from the tax-and-spend legacy of Jim Doyle and getting the state's economy back on track.
ATR President Grover Norquist sent a letter to Wisconsin state legislators in support of the supermajority requirement. To see its full text, see below. For a PDF, click here.
January 6, 2011
I enthusiastically urge you to support Gov. Scott Walker’s proposed legislation imposing a supermajority requirement for certain tax increases. The governor correctly reaffirmed his commitment this week to oppose all tax increases through the duration of his time in office. This specific bill will erode the temptation for this and future legislators to propose and vote for increases in the income, sales and franchise taxes, a necessary prerequisite for spending reform.
The supermajority requirement reduces the upward pressure on tax rates brought about by Wisconsin’s balanced budget requirement. And it is no secret that previous administrations have capitalized on that pressure to raise revenue at the expense of the state’s taxpayers and job creators. Gov. Doyle reflexively turned to tax hikes to maintain Madison’s culture of overspending, to the tune of billions of dollars. By signing the Taxpayer Protection Pledge and now proposing a supermajority requirement for tax increases, Gov. Walker has signaled a definitive end to the status quo.
To be sure, this legislation should be expanded to include all tax increases, including distortionary targeted excise taxes, property taxes, and the like. But it is a fantastic start. And a legislature of any makeup serving with this governor knows to refrain from even introducing a net tax increase of any kind, as Gov. Walker has pronounced such proposals dead on arrival.
ATR recently released a study highlighting the differences between states gaining and losing Congressional seats as a result of the 2010 Census. The top income tax rate in states gaining seats was less than one-half of that in losing states. Gainers’ per capita spending was roughly one-third lower than losers. When government largesse is restrained and tax rates low, jobs are created and population attracted. The first step in achieving this for Wisconsin is to pump the brakes on any additional tax increases, and then work toward principled spending cuts and tax relief. Gov. Walker’s supermajority requirement is the important first step in a greater process.
Until you take the threat of higher taxes completely off the table, lasting spending restraint is unattainable. This is why we at ATR are so pleased to have Gov. Walker and 21 Wisconsin legislators join a cast of 14 governors and nearly 1,300 state legislators nationwide in signing the Taxpayer Protection Pledge. This bill is yet another win for taxpayers in the Badger State.
I urge you to support this legislation, and to join your colleagues that have signed the Taxpayer Protection Pledge. For more information on the Pledge or on the broader issue of supermajority requirements, please contact ATR Wisconsin state affairs manager Joshua Culling at firstname.lastname@example.org.
CC: The Honorable Scott Walker
ATR: No Lame Duck Tax Hike in Illinois
Many members of the Illinois Legislature are on their way out the door, but not before attempting to give Gov. Pat Quinn the income tax hike he's wanted since his first day on the job. Quinn's coveted economy-killer has had a number of iterations over the past 18 months:
- May of 2009: 50 percent income tax increase. This proposal would have increased the income tax rate from 3 percent to 4.5 percent and taken roughly $4 billion from the private economy near the peak of Illinois’ recession. It failed in the legislature, largely because of voter disapproval by a 30 point margin.
March of 2010: 33 percent income tax increase. Believing it was the size of his previous plan that turned off constituents, Gov. Quinn presented a scaled-down income tax hike that would have increased the rate to 4 percent, a $3 billion tax increase. This also went nowhere.
- July 2010: “secret” 67 percent income tax increase. Quinn’s plan to wait until after the election to impose this whopping $6 billion tax hike was clever until it was revealed in an interview with his budget director David Vaught: “We’re going to pass a tax increase in January,” he said. “We expect it is going to be very substantial.” Taxpayers appreciate his candor much more than the governor’s subsequent scurried attempt to reject his assertion.
- August 2010: 33 percent income tax increase. Last week Quinn returned to his previous call to increase the rate to 4 percent, calling it “a pretty good bargain for taxpayers.”
Now, according to the Illinois Policy Institute, the tax scheme may result in a whopping 83 percent increase. Not that Speaker Michael Madigan is keen on letting taxpayers in on the secret, of course. The entire process is playing out in a closed-door lame duck session, before the new, more taxpayer-friendly legislature gavels in on January 12.
If you're in Illinois, call your lawmakers now and tell them this job-killing, anti-democratic process is unacceptable.
To see ATR's letter to Illinois lawmakers, see below. For a PDF copy, click here.
January 6, 2011
Unsurprisingly, Gov. Pat Quinn and legislative Democrats are rushing to enact a crippling income tax increase by any means necessary. By doing so in a last-minute lame duck session bereft of transparency, they are acting expressly in contempt of voters, who oppose such a massive tax hike, especially from a legislature with one foot out the door. I urge you to see through the usual horse-trading gimmicks taking place in Springfield and oppose a tax increase of any kind.
House Republican Leader Tom Cross was correct to characterize Democrats’ efforts to “justify” an income tax increase with toothless spending restraint as falling “woefully short.” In particular, a phony spending cap being pushed by Speaker Michael Madigan is woefully inadequate. Its “emergency” loopholes (along with exemptions for pension payments) are enormous, rendering the cap effectively useless. And it pushes any remaining restraint to 2014, when a presumed multi-billion dollar income tax increase would further inflate the spending baseline.
Rep. Mike Bost has filed an amendment to the Speaker’s bill addressing its major flaws. With the amendment in place, the bill represents real reform and should be supported.
Regardless of any offer of budgetary reform, real or imaginary, I urge you to remain steadfast in opposition to a tax increase of any size. Illinois' economy – its small business owners and individual taxpayers in particular – cannot sustain the drubbing of yet another round of tax hikes.
The current budget crisis is a product of overspending. While an amended spending cap that eliminates massive exemptions and loopholes would certainly be a positive development for taxpayers, a tax increase should be firmly off the table. Illinois legacy of profligacy, debt and deficits must end here.
To ignore the will of the voters by ramming a massive tax increase through as the legislature walks out the door is a slap in the face of those who choose to participate in the democratic process. On their behalf, I ask that you end discussion of a lame duck surprise and commit to an adult conversation about the state budget when the next legislature gavels in on January 12.
If you have any questions about this issue, please contact ATR state affairs manager Joshua Culling at email@example.com.