Taxable Talk

I’m a native of Illinois, and most of my relatives still reside there. Unfortunately, the home of the Cubs is having a multitude of tax troubles.

First, unemployment in the state is now over 11 percent (11.1% to be exact). Fewer people working leads to less tax collected.

Second, Illinois has changed how property taxes are collected. The first installment is due on March 2, but it’s not 50% of the tax. It’s now 55% of the tax (with 45% due late in 2010) thanks to a change in Illinois law. It’s a way for local government to make money off of our money instead of us having it to live off of.

Of course, politicians in Illinois are scrupulously honest, forthright, and have never ever been known to lie, cheat, or steal, right? Oh yes, the trial of disgraced former governor Rod Blagojevich will be late this summer.

Rocky Wirtz is a folk hero among Chicago’s long-suffering hockey fans. After his father, William (Bill) Wirtz, passed away in 2007, he changed the Blackhawks’ philosophy. Suddenly, the laughable losers turned into winners, and the Blackhawks played in the Western Conference Finals last year.

Mr. Wirtz also owns a liquor distributorship in Chicago. It’s not a little business–it’s a $1.5 billion company. And so when Illinois lawmakers decided to balance its budget partially by hiking liquor taxes, he was annoyed. Well, more than annoyed. He’s challenging the liquor tax hike on grounds that it violates the state’s constitution by covering disparate subjects.

Mr. Wirtz is also challenging Illinois’ new video poker law. In theory, come mid-September there should be video poker terminals in bars and taverns throughout Illinois. Hogwash, says Aaron Jaffe, chair of the Illinois Gaming Board. While the state legislature approved the video poker terminals, they didn’t fund any of the needed personnel or the $75 million needed to just implement the program. So if there’s no court order stopping the program it’s likely that video poker is still months away.

But Mr. Wirtz is challenging the gaming expansion, too. He claims that the expansion violates federal gambling law. Mr. Wirtz’s attorney is asking for an immediate injunction.

Meanwhile, the AFSCME has filed a lawsuit to stop Illinois from laying off 2,600 state workers. The union argues that under their collective bargaining agreement, layoffs must be negotiated.

One thing is certain: Expect lots more labor unrest as state budgets shrink. That’s a conclusion that everyone involved can agree with.

Speaking of governors having troubles there’s Governor Blagojevich of Illinois. Christopher Kelly was a fundraiser for Governor Blagojevich until he was indicted on 12 counts of tax fraud. Last week Mr. Kelly changed his plea to guilty from not guilty. There’s no word on whether Mr. Kelly will be testifying against Governor Blagojevich in his upcoming corruption trials.

Sentencing for Mr. Kelly will be in 2009.

When I was growing up just north of Chicago my parents told me about how the dead voted. That didn’t seem right to me, but I did learn at a young age about Chicago politics.

Last year I reported that former Alderman Arenda Troutman was accused of 13 counts, including mail fraud and tax fraud. She had said she was innocent…until this week.

Sam Adam, Jr., Troutman’s attorney, told the Chicago Defender, “I can say that the federal government did their homework, which is evident by what we see here today. For the benefit of her family and for the benefit of her personally, we felt this was the best thing to do at this time.” What she did was to plead guilty to one count each of mail fraud and tax fraud.

When she’s sentenced this December she’ll be spending some time at ClubFed. Her attorney is hoping to keep the sentence under 33 months; however, she’s likely to spend around four years there.