Fiscal and Economic Issues Discussion Group August 2016 Meeting NWSOFA Introductions of Presenters and Participants

NWSOFA Fiscal & Economic Issues NWSOFA Resources http://www.nwsofa.org/ https://www.facebook.com/groups/nws4obama/ https://www.facebook.com/nwsofa/?fref=ts https://connect.barackobama.com/groups/181/ NWSOFA https://connect.barackobama.com/groups/41/ Economic Opportunity https://my.barackobama.com/page/event/search_simple?source=events-redirect To find our next meeting https://docs.google.com/document/d/1I16PAS0r42RAJXF4JH-Q0XLto-gsCLRwMl15ulYFGIs/edit?usp=sharing Analyses of presidential candidates’ policy proposals

NWSOFA Fiscal & Economic Issues When we review policy issues we ask: How will this policy issue affect economic growth and jobs? How will this policy issue affect the budget deficit, both now and in the future? We spend a lot of time examining economic and jobs growth and budget issues at the national level We started looking at the Illinois budget more last year So how is the U.S. economy doing? How are we doing with the federal budget deficit?

NWSOFA Fiscal & Economic Issues Perception on Direction of the Country is not good

NWSOFA Fiscal & Economic Issues Why it isn’t full recovery yet, i. e NWSOFA Fiscal & Economic Issues Why it isn’t full recovery yet, i.e. the U-6 Unemployment Rate Historical Range (1994-2007) vs. June 2016 Level July 2016 = 9.7%, i.e. still a lot of slack in the labor market

NWSOFA Fiscal & Economic Issues Why it isn’t full recovery yet, i. e NWSOFA Fiscal & Economic Issues Why it isn’t full recovery yet, i.e. the U-6 Unemployment Rate

NWSOFA Fiscal & Economic Issues The graphs we usually see from the White House (and OFA). Is the country going in the right direction? Most people can’t tell from these graphs.

NWSOFA Fiscal & Economic Issues The graphs we should see – GDP trending up for 6.75 years, jobs for over 6.0 years Is the economy going in the right direction? Yes !!

NWSOFA Fiscal & Economic Issues This actually agrees with how people view the direction of their personal situation

NWSOFA Fiscal & Economic Issues Unrealistic Expectations - Big wage gains are NOT a normal part of a recovery

NWSOFA Fiscal & Economic Issues The Federal Budget Deficit – The issue is increasing deficits in future years

NWSOFA Fiscal & Economic Issues Fiscal Year Totals (billions of dollars) Bush Budget Years    |           Obama Budget Years             2008 2009 2010 2011 2012 2013 2014 2015 Receipts 2,524 2,105 2,163 2,303 2,449 2,774 3,021 3,249 % of GDP 17.0% 14.6% 14.7% 14.9% 15.3% 16.7% 17.5% 18.3% Outlays 2,983 3,518 3,457 3,603 3,538 3,454 3,506 3,759 20.1% 24.4% 23.5% 23.3% 22.1% 20.8% 20.3% 20.7% Deficit -459 -1,413 -1,294 -1,300 -1,089 -680 -485 -439 -3.1% -9.8% -8.8% -8.4% -6.8% -4.1% -2.8% -2.5%

NWSOFA Fiscal & Economic Issues Since our last meeting, Illinois jobs numbers were updated from January through March, with prior years restated significantly. 2014 job growth went from +66,800 to +88,000. 2015 job growth went from -3,000 to +51,400. 2016 is off to a good start - +30,600 jobs in first five months

NWSOFA Fiscal & Economic Issues Job Growth in Illinois

NWSOFA Fiscal & Economic Issues Illinois’ Alleged Spending Spree with the Higher Income Tax Rates

NWSOFA Fiscal & Economic Issues The 5th most regressive state and local tax structure in the country

NWSOFA Fiscal & Economic Issues Rauner’s FY 2017 Budget: $3.5 billion shortfall in estimated revenue vs. proposed spending Revenue estimate may be $725 million high In other words, Governor Rauner’s budget needs between $3.5 and $4.2 billion in additional revenue to be in balance

NWSOFA Fiscal & Economic Issues Some revenue ideas from CRS since all budgets need revenue Reinstating the 5% income tax rate for another 2-3 years ($5 billion per year) Expanding the state sales tax to include all consumer services ($2 billion per year) [regressive] Taxing a percentage of retirement income for individuals with an Adjusted Gross Income over $50,000 per year ($1.2 billion per year) [doubtful due to politics – seniors vote] Passing a constitutional amendment to allow a progressive income tax [2016 ballot, FY 2018 is 1st impacted year]

NWSOFA Fiscal & Economic Issues The IL economy that Rauner wanted to “turnaround”

NWSOFA Fiscal & Economic Issues The IL economy that Rauner wanted to “turnaround” In 2014, the year before Governor Rauner took office, Illinois added 88,000 jobs per the Establishment survey, unemployment declined by 2.1% and employment increased by 94,701 per the Household Survey. The job gains were the 2nd best year since 1998, trailing only 2012. The employment gains were the best since 2006. For 2015 under Governor Rauner jobs were up 51,400, unemployment is up 0.1% and employment is up 48,203.  (Dec 2014 – December 2015) So Governor Rauner is accomplishing a “turnaround”—a negative “turnaround” Our last real (negative) turnaround governor was George Ryan (Jan 1999 - Jan 2003) who presided over a 110,532 person decline in the labor force, a 252,273 person decline in employment, and a loss of 86,400 jobs in the Establishment survey. (Dec 1998 - Dec 2002) By contrast under Blagojevich and Quinn we increased the labor force by 221,523, increased employment by 234,954, and increased jobs by 46,100. (Dec 2002 - Dec 2014)

NWSOFA Fiscal & Economic Issues Let’s talk about the presidential candidates’ policy proposals https://docs.google.com/document/d/1I16PAS0r42RAJXF4JH-Q0XLto- gsCLRwMl15ulYFGIs/edit?usp=sharing