Decades of blue model governance have left Illinois with powerful public sector unions, a legislature subservient to them, and an intractable public pension problem. Politico recently labeled Illinois America’s first “failed state,” as feuding between the Democratic legislature and the Republican governor over how to handle the state’s cascading fiscal crisis brings governance to a standstill.
San Diegans voted five years ago this month to switch all new city hires, except police, from pensions to 401(k)-style individual investment plans, becoming one of the first big cities to take the plunge.
Before the budget change, a family of three that exceeded $3,518 in monthly income or $42,216 a year would no longer be eligible. This figure was calculated based on the current income limit for a family of three, which cannot exceed 70 percent of the 2005 state median income. The new state law still requires that a family’s income be 70 percent of the state median or less to be eligible for the subsidy. However, more families will be able to qualify, since the overall income limit will be higher when calculated using the most current state median income information. The new budget also states that families will be allowed “ongoing eligibility” as long as their income is not more than 85 percent of the state median income. This means families would not have to re-apply for services because of increases in income that didn’t exceed that level and more families will remain eligible.
California lawmakers passed a spending plan for the coming fiscal year Thursday, meeting the state’s budget approval deadline with a $183.2 billion package that raises school funding, expands a tax credit for the working poor and gives the Capitol a greater say over University of California finances
There are serious reasons to consider cutting the U.S. corporate income tax. However, many of the best arguments for cutting the corporate income tax apply most strongly to permanent cuts, not temporary ones. A temporary corporate income tax cut is less likely to promote growth and less likely to benefit workers than a permanent corporate income tax cut. A tax reform effort should hope to boost incomes for all, and a corporate income tax cut could be a means to do it. However, a large but short-lived reduction in corporate income taxes may be largely a windfall for investors, pension funds, and retirement accounts, with precious few broader benefits to the economy at large.