On Policy: Money for Special Interests, Straight from Your Paycheck

Note: This new blog series will address, from a Libertarian perspective, policy issues facing Champaign County residents, and those of Illinois state more broadly. It will examine upcoming or recently passed laws, and inform you about how your elected officials voted on them.

Campaign season 2020 is underway in Champaign County: mailers are arriving by foot carried by the faithful letter carriers, political swag is beginning to fly off tables at local events, and yard signs will soon begin sprouting in lawns all around town. At least one such mailer detailing Rep. Carol Ammons’ agenda and key legislative record has already been making the rounds. I thought this would be a good chance to reflect on her representation and voting record over the 2019-2020 term to date.

Rep. Ammons’ recent mailer.

Rep. Ammons has been an ally on two issues that Libertarians care about deeply; namely, criminal justice reform and legalization of recreational marijuana use (see Sec. 1.7 of the LP party platform here). I applaud her efforts to provide transparency of public complaints of policing (HB2503), work to improve independent legal review of the polygraph process (HB2569), support for lowering the burden of appearing in court for persons held in State confinement (SB1890), and creation of criminal ramifications for law enforcement officials guilty of fraud (HB2112, HB2111). She also co-sponsored the recently passed bill legalizing recreational marijuana use in Illinois (HB0902), which was a landmark achievement in US legalization efforts in that it provides provisions to free non-violent drug offenders.

Bills co-sponsored or voted for by Rep. Ammons.

That said, much of her voting record has been in opposition to the values of liberty, freedom to operate, personal choice, smaller government, and fiscal responsibility. As evidence, I will briefly review bills she has supported — and explicitly calls out in her flyer — as they represent examples of the worst type of government.

Rep. Ammons supported the “Prescription Drug Pricing Transparency Act” which places new regulations on the healthcare industry within the State of Illinois at a time when health insurance costs continue to rise at rates greatly outpacing income and GDP growth. HB 156 burdens insurance provides with reporting requirements related to prescription drug coverage. Additionally, the law requires drug manufactures to provide justifications for increases in drug prices. While on the one hand this legislation does not change the right of manufacturers and insurers to price costs of insurance, it is clearly meant to publicly shame companies for their business practices.

Enter HB 471, a bill that amends the “Illinois Insurance Code” which empowers the State to reject ACA health insurance premium rate increase. By nebulously defining “unreasonable rate increases” it essentially allows the state to impose price controls on health insurance plans. Many might think this is good policy considering the rapidly rising health insurance costs; however, this bill will likely decrease choice among an already sparsely populated market. Insurer participation in the health exchange marketplace has continually dropped since the passage of the ACA from a peak of 5 insurers on average in 2015 to 2.35 in 2019, and as things stand today 15% of Illinois enrollees only have a single insurer option [1]. This is unsurprising considering the high costs of compliance. Price controls will only exacerbate the problem. As a case study, Land of Lincoln Health closed operations in 2016 after $7.1M in losses, despite $160M in government grants [2]. Along with decreasing choices, enrollment in the exchange has been declining at a rate between 7% and 9% per year from 2016 to 2018 [3]. I highly doubt adding price controls will solve these problems, and my prediction is that HB 471 will eventually require further Illinois subsidies to prop up failing marketplace plans.

In economic policy areas, Rep. Ammons voted for efforts that will weaken employment in Illinois, while raising overall State spending. She supported the “Lifting Up Illinois Working Family Act” (SB 1) that increases the minimum wage to $15/hour over 5 years, the bloated appropriates bill (SB 262) which adds between $574M and $1.3B to the state deficit [4], and an amendment to the Illinois tax code (SB 687) that raises corporate tax rates by a percentage point and creates a steep progressive income tax. While individuals and families making less than $100K per year will see similar or slightly reduced tax rates, higher earners will face steep taxes ranging from 7.75% to 7.99%. This is the second tax increase in four years, after the increase from 3.75% to 4.95% in 2017.

Ramifications of Illinois corporate and individual taxes have been felt for years. Corporations have been leaving Illinois for years [5] due to high costs of business as have individuals [6]. In fact, Illinois has the second highest rate of emigration surpassed only by New Jersey, based on data from moving companies [7,8]. This trend will likely continue given the increased corporate and individual tax rate increases, resulting in worsening financial situation within the state.

To put a cherry on the cake, Rep. Ammons supported broad subsidies for R&D and apprenticeships via SB 1591 and SB 191. The former amends the Illinois tax code to extend R&D tax credits to 2027 of up to 6.5% for certain expenses and creates and Apprenticeship Tax Credit of $3500 per employee (up to $5M per company!). While innovation is important, rather than increasing tax rates followed by subsidies, why not just let businesses keep more of their money? The latter bill creates a “21st Century Employment” grant program for community colleges that requires the state to pay at least 60% of proposed training costs. While no specific dollar amount is allocated for the training program—which is itself irresponsible governance—we can estimate the deficit due to the apprenticeship tax credits of up to $48.7M (based on the 13,900 apprenticeships identified in a 2016 report [9]). Rather than require the State to sponsor apprenticeships, why not let the plethora of unions in Illinois pay for them? That is part of their raison d’etre after all.

Overall, these hallmark proposals supported by Rep. Ammons are misguided. They include bad governance, increased regulations and price controls, tax hikes, and payments to special interests. I expect this will result in decreased competition, further flight of taxpaying corporations and individuals alike, and a worsening condition in Illinois. I give Rep. Ammons a D- for the 2019-2020 term so far.

Detailed Notes on Policy

IL HB 156 – “Prescription Drug Pricing Transparency Act”

  • Status: Passed June 21, 2019
  • Bill Specifics
    • Requires health insurer to disclose to Illinois Department of Public Health:
      • all covered prescription drugs
      • % of premium attributable to drug costs
      • % spending change in year over year spending on drugs
    • IDPH will publish list of drugs for which it pays significant amounts
    • Require manufacturer to report:
      • Justification for increase in drug cost
    • Good: Does not change manufacturers right to change drug price

IL HB 471 – Amendment to the “Illinois Insurance Code”

  • Status: Passed May 24, 2019
  • Bill Specifics
    • Added a nebulous definition of “unreasonable rate increase” which subjectively determined by a State committee
    • Requires all ACA healthcare exchange plans to file rate increase proposals with the Illinois Department of Public Health which will then determines whether to allow or deny them

IL SB 1 – “Lifting Up Illinois Working Families Act”

  • Status: Passed February 19, 2019
  • Bill Specifics
    • Bill raises minimum wage to $15 over 5 years
    • Minimum wage increases to:
      •  $9.25/$10 in 2020
      • $11 in 2021
      • $12 in 2022
      • $13 in 2023
      • $14 in 2024
      • $15 after 2025
    • Credit for companies with <= 50 employees if average wage is <$55K
      • 25% in 2020, 21% in 2021, 13% in 2022, 9% in 2023, 5% in 2024
    • Penalty for underpayment increase from 2% to 5%

IL SB 262 – Appropriations Bill

  • Status: Bill Passed as of June 5
  • Bill Specifics
    • Increases spending across the board
    • Estimated deficits between $574M and $1.3B

IL SB 687 – Amendment to the “Illinois Income Tax Act”

  • Status: Passed June 5, 2019
  • Bill Specifics
    • Raises corporate income tax rate from 7% to 7.99% on Jan. 1 2021
    • Raises income tax rates:
      • For individuals:
        • 4.75% up to $10K
        • 4.9% from $10K to $100K
        • 4.95% from $100K to $250K
        • 7.75% from $250K to $350K
        • 7.85% from $350K to $750K
        • 7.99% for anyone making $750K or more
      • And married couples:
        • 4.75% up to $10K
        • 4.9% from $10K to $100K
        • 4.95% from $100K to $250K
        • 7.75% from $250K to $500K
        • 7.85% from $500K to $1M
        • 7.99% for anyone making $1M or more
    • Adds a tax credit equal to 6% of real property taxes
    • Adds a tax credit for each child <18 years old
      • $5 for each $2K up to $60K (joint; total $150) or $40K (single; total $100)
    • Changes married filing jointly to be spouse instead of husband and wife (good!)
    • Transfers General Revenue Fund to Local Gov. Dist. Fund:
      • Down from 6.06% to 5.32% revenue from income taxes
      • Down from 6.85% to 6.16% of revenue from corporate taxes

IL SB 1591 – Amendment to the “Illinois Income Tax Act”

  • Status: Passed June 6, 2019
  • Bill Specifics
    • Extends Tax credit for R&D of 6.5% of qualifying expenditures for research to 2027 (from 2022)
    • Creates an Apprenticeship Tax Credit of $3500 for employers (Up to $5M per company)

IL SB 1919 – Amendment to the “Public Community College Act”

  • Status: Passed June 21, 2019
  • Bill Specifics:
    •  Creates a “21st Century Employment” grant program for community colleges
      • Colleges create a training plan and budget to work with local development partners
      • Private public partnership where development partners pay maximally 40% of the costs
      • Creates an advisory panel for grant program
    • No Dollar amount is given; based on appropriations

Referenced Materials

  1. R. Fehr, C. Cox, L. Levitt, “Insurer Participation on ACA Marketplaces, 2014-2019”, Kaiser Family Foundation, Nov. 14. 2018. Accessed: Aug. 8, 2019.
  2. L. Norris, “Illinois Health Insurance”, Health, Dec. 17, 2018. Accessed: Aug. 8, 2019.
  3. C. Gaba, “UPDATE: 2018 ACA Open Enrollment: FINAL TOTAL: 11,760,533”,, Feb. 7, 2018. Accessed: Aug. 8, 2019.
  4. A. Schuster, “Pritzker Signs Illinois Budget Out of Balance By Up to $1.3 Billion”, Illinois Policy, Jun. 11, 2019. Accessed: Aug. 8, 2019.
  5. A.M. Kukec, “Illinois Loses Out as Companies Move Out: Budget woes and political chaos have businesses and workers fleeing Illinois”, U.S. News, Mar. 15, 2018. Accessed: Aug. 8, 2019.
  6. D. Keene, “Fleeing the Land of Lincoln”, The Washington Times, Mar. 13, 2018. Accessed: Aug. 8, 2019.
  7. J. Barnas, “Moving Company Ranks Illinois 2nd in Nation for Outbound Moves”, Illinois Policy, Jan. 7, 2019. Accessed: Aug. 8, 2019.
  8. United Van Lines, “2018 National Movers Survey: New Jersey Tops List of Outbound Moves while Western ad Southern States Lead Inbound Moves”, Jan. 2, 2019. Accessed: Aug. 8, 2019.
  9. Illinois Department of Labor, “2016 Apprenticeship Survey Report “, Mar. 1, 2017. Accessed: Aug. 8, 2019.

From the Chair: IL DCFS Needs Accountability

A recent report from the Inspector General found that the Illinois Dept. of Children and Family Services (DCFS) played a role in 102 children deaths in the past 3 years.  102 deaths that don’t include Tanaja Barnes of Decatur, 2, in 2019.  She froze to death in her home as her mother’s boyfriend refused to pay for heat.  102 deaths don’t include AJ Freund of Crystal Lake, 5, who died being beaten at the hands of his drug addicted parents.  Those parents had repeated contact with DCFS from Tanaja’s and AJ’s births.

JB promised to expand DCFS role in child upbringing during the campaign.  He promised to increase the birth-to-three services of the during the campaign.  This includes expanding home visits because it “increased school readiness, reduced child maltreatment and reduced lifetime arrests and convictions.”  He also promised to create a mobile and online portal to provide information from the state so the state can reach all new parents.  This will require ever increasing budgets for a state agency that consistently fails its mission today.

DCFS staffers face high workloads and, unfortunately for the children, it can result in the death of those in their care.  The majority of DCFS workers are not evil, thrive on forcing drama, or incompetent.  The ones that are cause dire consequences.  The majority of children who come into contact with DCFS will not be taken from their parents.  The ones that are face peril not only from our legal system but also those charged with their care.  This agency is in drastic need of reform and formal policies that will guide a good working culture.

The agency contractors who were in contact Tanaja and AJ will not face criminal charges for their actions.  In these cases, the contractors didn’t attempt to falsify reports.  They did falsify reports in the case of Semaj Crosby in 2017.  This contract employee, to date, has not been charged with any crime.  This is wrong.  If a prisoner dies in custody and a police officer falsifies the report, that officer is accountable of any number of offenses at the very least, filing a false report.  The DCFS worker who falsifies a report and a child dies, faces being fired but no jail time.  Given that current employment law prohibits employers from given information as to why a former employee is released, this seems like a small consequence for doing such an important job so poorly.  The contractor will likely not face any financial harm at all for a 17 month old baby that is crushed under the living room couch.

This agency needs reform, not more contact with more parents who will fear their children being taken away.  The agency needs to be accountable to those it assumes the care of, not a union that protects those who cannot be trusted to tell the truth.  The agency needs a stable director, not a political flunky who is unwilling to make tough choices fighting that union or worse, do their bidding.  If the agency is unwilling to do so, it should be dissolved and its charge handed back to law enforcement with full capacity.  102 lives and no agency employees being held to account.  One can only imagine the cost for expanding DCFS’ reach into every Illinois family.

From the Chair: Mahomet Annexes Outlying Subdivisions

On April 23, the Village of Mahomet annexed three subdivisions against the wishes of a vocal contingent of homeowners in those subdivisions.  The Briarcliff and Summit Ridge subdivisions were developed outside the existing limits of the village explicitly for a country feel and lower taxes.  Many of those residents attended study sessions explaining to elected Mahomet trustees that they purchased their home, in part, because it was not in the Village.  Village officials have been concerned with increasing revenues and increasing the Village’s population count for the upcoming 2020 Census.

A Federal Census should NEVER be a reason to annex property into a city or village.  Nor should property owners be forcibly annexed into a city or village.  These homeowners are now facing increased property taxes and fees that they didn’t want.  These homeowners are now forced to purchase services from a provider they didn’t choose. These homeowners are now taxed without elected representation as the homeowners couldn’t vote in the 2019 Village of Mahomet election.  These communities would have been better served to be annexed after a referendum vote on annexation.  We doubt this would have passed given the large number of negative comments given in public meetings.

This is taxation without representation.  We believe the annexation statutes should be changed to require subdivision annexations to go to a direct vote of the proposed annexation residents.  These residents should be allowed to have their say at the ballot box, not railroaded in a village hearing or ask for relief in a court of law.  The statutes should also be changed to require cities and villages to annex properties PRIOR to a municipal election so newly annexed residents can elect their officials, not have them foisted upon them.