New Experiment: Mornings with Meep
by meep
Inspired by Truth in Accounting’s Beer with Bill Youtube series (that they just started… there are only a few entries right now), I bring you… Mornings with Meep!
Link to the video on YouTube: Mornings with Meep, March 11, 2018 ep. 1
LINKS FROM THE VIDEO
First, last week’s posts:
- Memory Monday: Current Reflections on the Spanish Flu Pandemic and First Week of March 1918
- Taxing Tuesday: Update Your Withholdings, Shot Across the Bow, and “Clever” Ideas Progressing
- The Fiscal State of Connecticut: Totally Screwed
- Divestment and Activist Investing Follies: Don’t Let the Evil Ones Bank! Also more Pension Divestment Idiocy
- Around the Pension-o-Sphere: Public Unions, Illinois, Connecticut, Kentucky, and More!
Second, my email address: marypat.campbell@gmail.com
Beer with Bill episode 1: YouTube link
Beer with Bill episode 2: YouTube link
Post with Indiana billboard: Marathon Pundit post from 2014 — (Billboard) Stillinnoyed? Indiana, a state that works
Indiana’s bizdev website: A State that Works
Public Pensions thread at Actuarial Outpost: Public Pensions Watch 2018 [I make a new thread every year — the first one was in September 2008]
DEPARTMENT OF CORRECTIONS
I get emails!
First, a correction re: Illinois’s corporate tax.
A quick note in the IL Corp rate in your last article: effective 7/1/17 Illinois is back up 9.5%. (Which is where the rate was for years)
Plus, it’s a tough comparison to Iowa. Iowa is not a unitary filing state. Illinois takes the position that they can tax almost all c-corporations within a company’s structure.
I had pulled from the Tax Foundation’s most recent post on state corporate taxes, and they’ve got some of the fidgety details there. However, that post was from February 2017, before the corporate tax rate in Illinois got changed. There are all sorts of issues with the business environment in Illinois, obviously.
Next, on the sovereign immunity argument from one of the gubernatorial candidates:
In your most recent blog posting, you reference Peter Thalheim’s advocacy of sovereign immunity in Connecticut and you indicate that Illinois had tried to use that doctrine. In the interest of clarification, let me offer some observations.
First, after reading Thalheim’s position on sovereign immunity from his campaign website, here is what I think he means. He correctly notes that in Connecticut, the right to a pension is a property right, not a contract right. By tying that doctrine to sovereign immunity, what I think he is saying is that Connecticut could just stop funding pensions, let the funds pay out whatever they have, and then let pensioners try to sue to enforce their property interests. Here’s a summary of Connecticut sovereign immunity law. https://www.cga.ct.gov/2011/rpt/2011-R-0076.htm Now I don’t know whether Connecticut has waived sovereign immunity on pension rights, but this all sounds a bit draconian to me. On the other hand, his larger point might be that this is a way to force people to the negotiating table. Clearly, for public employees, this would not be a BATNA (best alternative to a negotiated agreement).
As for Illinois, the gambit there was a bit different. The legislature, at the urging of Governor Quinn, enacted sweeping pension reforms in 2013, despite several court decisions interpreting the pension clause that had been in the State Constitution since the Convention from the 1970’s. Against that history, it was easy for even people like me to predict that the courts would hold the legislation unconstitutional. The excuse used by Sidley & Austin in support of the legislation was that the reserved police powers of the state justified it. That’s where the decision in United States Trust Co. v. New Jersey, 431 U.S. 1 (1977) fits in.
Obviously, that’s a lawyer writing to me.
I can understand that the issues are different, but others have made similar arguments re: letting the money out (Mark Glennon in particular.)
The thing is, the constitutional arguments really don’t matter in these cases — the issue is so big, it doesn’t matter if the constitutions allow for the actions or not. You have to have the political buy-in, and it needs to be broad. This is why I’m annoyed at both Illinois and Kentucky – the work needed to get buy-in hasn’t been done. And it’s tough work. (The lawyer did reply to me after I made that point that the ineffectiveness of Rauner in Illinois and Bevin in Kentucky relate to their hedge fund-ish/finance backgrounds — a place where you don’t necessarily need political skills…but it puts to mind Trump, who did need political skills to build his businesses, and is playing this politics game far better than many people thought.)
Again, if you find an error, even if it’s a fiddly detail, feel free to email me at marypat.campbell@gmail.com.
I’m a fiddly detail person, and I do not mind being pointed out that I got an item of fact wrong. It’s more important that what I end up with is eventually correct in terms of fact. Now, my opinions — you can try to convince me there, but I’m pretty damn bullheaded.
See y’all next week!
