Taxpayers United of America to Celebrate 38th Anniversary

View Release as PDF
CHICAGO—Taxpayers United of America (TUA) will celebrate its 38th anniversary on June 27, 2014, according to Katie McNeilly, TUA Director of Operations.
“TUA has grown to become one of the largest taxpayer organizations in the country,” said McNeilly. “It was founded in 1976 by legendary activist and noted economist, Jim Tobin. Since that time, we have saved taxpayers over $200 billion in income, property, sales, and other taxes.”
HIST Evanston_Taxes.jpg
“Under Jim’s leadership, TUA has helped local taxpayer groups defeat 203 property-tax-increase referenda.”
“We also have defeated 18 attempts to raise the Illinois state income tax, and since 1992, have defeated every attempt to introduce a graduated state income tax.”
“In 1989, we helped our members defeat Ronald Reagan’s tax increase on senior citizens, the so-called ‘catastrophic’ health care bill. Our members chased U.S. Rep. Dan Rostenkowski, Chairman of the House Ways and Means Committee, down the street, forcing him to take refuge in his limousine. Soon after, the rest of the members in the U.S. House of Representatives got the message and repealed the tax.”
“TUA has led the way in releasing government employees’ names and pension payments here in Illinois and around the country. We have analyzed and exposed government employee pensions in 19 states so far.”
“We are conducting workshops across the country, sharing the methods and tips that Jim Tobin has pioneered in government pension analysis and grassroots tax activism.”
“As our organization continues to grow in size and influence, we look forward to even greater victories on behalf of taxpayers.”

Wisconsin Reporter | Will taxpayers have to pay for frivolity of John Doe prosecutors?

TUA’s pension project on Wisconsin government employees is utilized in this story from the Wisconsin Reporter about the John Doe investigation targeting Wisconsin conservative groups.
frivolousBy M.D. Kittle | Wisconsin Reporter
MADISON, Wis. — Frivolous.
That’s the word that U.S. District Judge Rudolph Randa has repeatedly applied to motions filed by John Doe prosecutors-turned-defendants in a civil rights lawsuit.
Most notably, last month Randa said that he was “absolutely convinced that the defendants’ attempt to appeal this issue is a frivolous effort to deprive the Court of its jurisdiction to enter an injunction,” the federal judge wrote in his ruling that reinstated his preliminary injunction shutting down a secret John Doe investigation into dozens of conservative groups.
Then, earlier this week the 7th Circuit U.S. Court of Appeals ruled that Randa did have the authority to issue the preliminary injunction, shutting down the nearly 2-year-old probe. And the appeals court questioned the defendants’ defense, that they are immune from the federal lawsuit because of protections under the 11th Amendment.
Take that notion up with “Ex Parte Young,” the 7th Circuit told the prosecutors, referring to a century-plus-old Supreme Court ruling that allows lawsuits in federal courts against state officials despite a state’s claim of “sovereign immunity.”
The question has arisen, particularly from conservative targets of the investigation: Do Wisconsin taxpayers have to pick up the tab for the prosecutors’ defense if, indeed, their motions are deemed frivolous?
The answer is, yes, and maybe not.
Conservative activist Eric O’Keefe and his Wisconsin Club for Growth, targets of the investigation, in February filed a civil rights lawsuit against Milwaukee County District Attorney John Chisholm, the Democrat who launched the secret probe in late summer 2012; his two assistant DAs, Bruce Landgraf and David Robles; John Doe special prosecutor Francis Schmitz; and Dean Nickel, a special investigator contracted by the state Government Accountability Board.
The lawsuit claims the prosecutors and the shadowy investigator violated their First Amendment rights in an investigation based on a legal theory that the conservative groups may have illegally coordinated with Gov. Scott Walker’s campaign. Randa has found the theory seriously flawed, indicating, as did the presiding John Doe judge, that the conservatives did not commit any crime under Wisconsin campaign finance law — a portion of which was recently ruled unconstitutional by the 7th Circuit.
Constitutional law expert Rick Esenberg  says under civil rights cases, parties can recover attorney fees for frivolous motions.
But what about Wisconsin taxpayers, who are paying the legal defense bills of the defendants, to the tune of potentially more than $150,000? Would they be reimbursed? That is, would the state be reimbursed?
“The state can, whoever is reviewing the bill at the state, can say, ‘We’re not going to pay you for that. That’s not professional work. Everyone knows you can bring Ex Parte Young for an injunctive claim for relief,” Esenberg said.
Well, apparently not everyone.
It becomes a question of contracts and professional liability, Esenberg said. A court would have to decide whether there was malpractice involved.
“It’s just like if you hire a guy to replace your roof and he screws up the east side of the roof,” said Esenberg, president and general counsel of the Wisconsin Institute for Law and Liberty, a Milwaukee-based public interest law firm.
There’s much at stake in this lawsuit for the prosecutors. O’Keefe and the club are not only suing the defendants in their official capacities, but in their individual capacities. If the plaintiffs win their lawsuit and are award damages, the prosecutors and Nickel could face expensive personal judgments.
Their “1 percent” wages and savings could be up for grabs.
Robles grossed $123,209.05 last year, at an hourly rate of $57.218, according to information Wisconsin Reporter obtained through the Milwaukee County Office of the Comptroller. Robles, who started with the Milwaukee County DA’s office in 1982, is a state employee like his fellow assistant DAs, but he opted for a more lucrative Milwaukee County pension and retirement health benefits plan.
Taxpayers United of America in 2010 estimated that Robles’ total retirement payout, including Social Security would top $2.27 million, if Robles lives to average life expectancy on the Social Security Administration’s actuarial table.
Robles’ pension more than likely would be off limits in any legal judgment. Such covered benefits are generally protected from damage awards, Esenberg said.
“That’s why when O.J. Simpson had a big judgment against him, he still was not living in poverty because his pension could not be touched,” the attorney said. “When they collect a judgment, they look for money in the bank, they garnish wages, they can foreclose on property, although there are all sorts of exemptions and complications.”
Landgraf earned $112,017.45 in gross pay, at $53.27 an hour, last year, according to the state.
Chisholm’s salary was $133,389.52, at $64.27 an hour.
We don’t know exactly how much Schmitz and Nickel have pulled in under the employ of the Government Accountability Board.
In 2014 alone, the GAB has spent at least $55,000 in connection with the John Doe investigation, including paying both Nickel and Schmitz as special investigators, according to a lawsuit that O’Keefe recently filed against the GAB in Waukesha County Circuit Court.
The state Department of Administration, in charge of the state’s bills, isn’t talking about the contracts, citing the John Doe secrecy order even after Randa ordered the probe shut down.
“As you are undoubtedly aware, anything dealing with an alleged John Doe investigation is normally sealed in accordance with the law Wis. Stat 968.26(3),” wrote Patricia Reardon, DOA program and policy analyst, in response to Wisconsin Reporter’s open records request. “Therefore, to the extent any such alleged contracts or communications did in fact exist, we would be compelled to deny your request.”
Wisconsin Reporter also attempted to contact Brian Hagehorn, Walker’s chief legal counsel. Ironically, as the John Doe prosecutors have spent years investigating Walker’s campaign, it’s the governor’s legal representative who authorized the contracts putting state taxpayers on the hook for the prosecutors’ legal fees.
Walker spokeswoman Laurel Patrick did not return multiple requests for comment over the past three days.
Wisconsin Reporter sought answers to these questions:

  • Should the state be responsible for covering the legal bills of defendants who file frivolous motions?
  • Will the governor’s office challenge the bills if the motions are ultimately deemed to be frivolous?
  • Also, Wisconsin Reporter would like to know whether Schmitz is being paid for his special prosecutor services during the time he spends defending himself in federal court?

Silence. Like the secrecy order surrounding the John Doe investigation.
The prosecutors repeatedly have declined to comment on the lawsuit or the probe.

Daily Herald | Which suburbs are income tax givers and takers?

TUA President Jim Tobin was quoted by the Daily Herald about Illinois income taxes and local government.
taxgiverstakersSince municipalities and counties share in the income taxes collected by the state, how much is coming back home?
That depends on where you live.
Some suburban workers pay a lot more to the state than what comes back through what’s known as the Local Government Distributive Fund.
But some places get much more back from the state — in one case, as high as 25 percent of what residents paid in.
As a whole, the suburbs are more giving than Chicago and much of downstate when it comes to redistribution of income taxes, but individually the suburbs are a mixed bag, based on a Daily Herald analysis of Illinois Department of Revenue and U.S. Census Bureau data.
That’s because taxes are paid to the state based on wages earned, but the amount returned from the state is a fixed amount per resident.
Each year, a chunk of the income taxes collected by the state is given back to municipalities and counties.
In recent years, that chunk has been 6 percent of the state’s total income tax haul, and in 2012 it amounted to more than $1 billion for the state’s towns and counties, according to state revenue figures.
The money then gets split among the local governments based on population. In 2012, each town got $87.85 per person, according to state revenue department records. For residents living in unincorporated areas, the county received those funds, state officials explained.
This state’s income tax redistribution policy means some suburban areas like parts of Aurora got back more than 25 percent of what residents paid in income taxes, while other areas like Oak Brook and Barrington received less than 2 percent of the income taxes workers there paid.
Despite the disparity, tax policy experts said the state’s income tax redistribution formula is doing what it’s supposed to do. “It may be the one and only thing that is OK with the state’s current tax policies,” said Ralph Martire, executive director of the Chicago-based Center for Tax and Budget Accountability, a bipartisan government finance think tank.
“Normally, per capita distributions are not the best thing to do. However, in this instance, because the cost of providing local government assistance is most closely tied to the number of people you serve, it’s the best way of doing things,” he said.
Taxes on higher incomes cover not only the local share but also a bigger portion of the cost of operating the state. The distribution of the income taxes helps ensure all parts of the state have the resources to operate effectively, experts said.
“The state’s interest is in providing basic services and support for all, not just those that have the highest ability to pay,” said Laurence Msall, president of the Chicago-based Civic Federation, a government finance research organization.
The state’s current policy is basic economics, Martire said.
“You remedy the inequality of riches by relieving the poor and burdening the rich,” Martire said. “That’s straight out of ‘The Wealth of Nations’ by the father of capitalism, Adam Smith. As a resident and a taxpayer, you have an interest in ensuring all local governments throughout the state have the capacity to have core services at an adequate level.”
Yet, critics argue income taxes returned to local governments go too much toward salaries and benefits for public employees instead of infrastructure and services.
“It’s happening because our state pushed down onto local governments a lot more responsibilities than other states have done,” said Carol Portman, president of the Taxpayers Federation of Illinois, a Springfield-based public finance efficiency organization.
Staffing costs are the majority of expenses for all of the state’s nearly 7,000 units of government, critics said.
“Eighty percent of their spending is on salaries and fringe benefits like pensions,” said Jim Tobin, president of Taxpayers United of America, a Chicago-based anti-tax group that fights tax hike proposals. “Most of us are going to have to work into our 70s to pay taxes so these guys can retire in their 50s and live the life of Riley.”
Roughly 1,400 municipalities and counties received income tax funds from the state in 2012, according to revenue department records. Chicago received the most, at more than $235 million. That amounted to 7.3 percent of the $3.2 billion of income taxes paid by the city’s residents.
By comparison, roughly 100 suburban governments in parts of Cook, DuPage, Kane, Lake, McHenry and Will counties received 5.4 percent of the $4.7 billion in income tax revenue collected from the workforce that year, according to the analysis. Those local governments split nearly $255 million among them, according to state financial reports.
“Every municipality hopes to receive more than it currently does,” said Art Osten, Oak Brook’s interim village manager. “The reality is that the distribution of taxes collected by the state is a political question. We hope the determination of need and reallocation is done in a reasonable and equitable manner and that Oak Brook receives its fair share of what its residents contribute.”
The future of the local governments’ share of income tax revenue is murky. Legislative leaders have threatened to shrink or eliminate the local funding since the income tax rate is set to drop from 5 percent to 3.75 percent next year. Under the current proposed budget, the local share would remain roughly the same.
State Rep. David Harris, an Arlington Heights Republican who sits on the House Income Tax subcommittee, said there hasn’t been much talk of changing the state’s income tax funding policy and he wouldn’t support it.
“To my mind, it’s a fair way to do it now,” he said. “I don’t want to go complicating the formula. The more complicated the formula gets, the more people play games with the money.”