Legislative Action

By DIANE ROSS

Daley — Sen. Richard M., that is — and his prospective of clout was the only hope of STOPing the Thompson-Byrne penny in the Senate, where the situation was much like that in the House. Chicago Democrats, who had blocked every tax relief bill but their own, finally dropped their override attempt and fell in behind Byrne when she came out for the Thompson penny.

It doesn't matter, of course, whether sales tax relief is spelled penny or pennies. The relief taxpayers want and the relief they'll get are two different things.

Few observers argue that Illinois has a tax that is more regressive than the one on groceries and medicine sold over the counter. Unlike the income tax, the sales tax discriminates against the poor and elderly, who must spend a larger percentage of their income on necessities each time inflation drives prices up. And Illinois is the only major industrial state where the tax is still on the books.

What is rarely noted, however, is that removing the sales tax on food and medicine has been a political issue in Illinois for decades. Democrats and Republicans have passed the tax torch back and forth depending on which party can use it against the governor. Since the tax went on the books 46 years ago, there have been no less than 31 attempts to remove it, according to Doug Whitley of the Taxpayers' Federation of Illinois. But given the state's economic climate at this time, it is incredible that sales tax relief finally came to a vote at all this year, much less a veto override vote.

It's not a question of whether taxpayers, especially the poor and elderly, deserve tax relief. Rather, it's a question of whether Illinois government ----especially Chicago — can afford sales tax relief right now. While the average taxpayer stands to gain about $52 a year — another week's worth of groceries — the state stands to lose about $100 million a year in revenue. That's money already earmarked for education and public aid. Chicago naturally nets the lion's share of the millions in sales tax revenue that the state returns to local governments each month, and an override of Thompson's veto of the phase-out bill would have jeopardized those revenues.

Politically, of course, it's a question of whether Thompson — really Byrne — can afford it. Once Byrne decided she couldn't chance it, it came down to power.

It will be difficult to tell how much clout Senator Daley lost until the next showdown. The succession of special sessions this year has left the powerful minorities in the legislature realigned with each adjournment. Daley could very well turn this session's defeat into a victory later.

With the penny compromise, Thompson gained at least a qualified victory. He claimed total victory when the legislature passed the compromise on the corporate personal property tax replacement in August, and again when his own billion-dollar road program was approved in September. But he paid a high price: overwhelming bipartisan opposition to his veto of the sales tax. Suburban Republicans, who wanted revenge for the roads tax deal, and blacks, who weren't about to let him rob them of tax relief, had already joined Daley. Still, Thompson had learned that the best weapon against bipartisan opposition is bipartisan leadership. Enter Jane Byrne.

With the special session on the sales tax, Thompson saw the chance for a clean-cut win. He had already announced he would veto any commitment beyond a penny cut. Now many legislators feared that if the override failed and Daley tried to effectively override by amending the penny compromise, the result would be no tax relief at all. Of course, Thompson could just as well have threatened to amendatorily veto the amended bill, cutting the commitment back to a penny. But that would have set the entire process back a month. Since the penny compromise was a new bill, not subject to veto session deadlines, legislators would have had still another chance to override it.

The original bill
The original measure, H.B. 2564, which listed Rep. Clarence A. Darrow (D., Rock Island) as chief sponsor but carried the 88 other House Democrats as co-sponsors, removed the four cents of state sales tax and the fifth cent of local sales tax on groceries and prescription medicine by phasing out the tax over four years. The first cent was to come off January 1,1980, and the others

24/ December 1979/ Illinois Issues

in July of 1980, 1981 and 1982. Tax-payers would see a two-penny cut during calendar year 1980.

H.B. 2564 meant a loss of revenue for local governments, although the loss was to be offset by an increase in income tax revenue to local governments.

California's Proposition 13, followed closely by Illinois' Thompson Proposition, had triggered a flood of tax relief measures including two packages of Thompson bills, sponsored by Minority Leader George Ryan (R., Kankakee) in the House and Minority Leader David Shapiro (R., Amboy) in the Senate. However, House Democrats, together with Senate Democrats, blocked all other tax relief measures. The timing was perfect. The strategy was obvious: force Thompson to practice tax relief.

H.B. 2564 passed the House 155-13 and the Senate 37-12; it was returned to the House for concurrence with Senate amendments, and passed the House again 100-43 on June 28. As Thompson had warned, he quickly vetoed the bill. Many observers wonder now why Thompson didn't use the amendatory veto instead, tailoring the bill to what he preferred. Despite Ryan's and Shapiro's bills, which centered on income and property taxes, Thompson apparently had not formulated a counter proposal on the sales tax. He was too busy collaborating with Byrne, determined to get his billion-dollar road program passed. Their strategy, despite the power of combined leadership, met roadblocks at every turn.

So it was too late by the time Thompson came up with a counter proposal and called a special session on sales tax in September. The Democrats derisively dismissed his plan as "a penny and a promise."

Meanwhile, Daley had assumed leadership of STOP, and his image as the champion of the oppressed, coupled with the intrinsic popularity of eliminating the hated sales tax, provided plenty of copy for political columnists as well as reporters. Thompson, with Byrne's unwavering support, had managed to push the road program through, but at a high price. Suburban Republicans, who were sold out in that deal, revolted. Blacks, who were determined to see the sales tax go at any cost, were belligerent. A few Chicago Democrats, angry with Byrne for going over their heads on the road deal, were openly rebellious.

The powerful suburban Republican and black minorities were only too glad to close ranks behind Daley, who was expected to galvanize this unusual coalition.

The Democrats had Thompson right where they wanted him. With the 1980 elections (so crucial to reapportion-ment) only a year away, every penny saved meant another vote for Democrats.

Bryne's support
Thompson needed help. Byrne was ready, willing and able. Some observers said she was afraid Chicago would be shortchanged, despite H.B. 2564's provisions for increasing income tax revenue to locals. Byrne didn't want to take that kind of a chance with state aid. Many felt that by endorsing Edward Kennedy for president, she had jeopardized federal aid from the Carter administration. Others said she had agreed to stand by Thompson on sales tax when he agreed to tax the suburbs to subsidize Chicago mass transit. Whatever the reason, it worked. Byrne's support broke the Democrats' stranglehold on Thompson.

Suddenly the tables were turned; Thompson put the squeeze on the Democrats. If they wanted to override the sales tax veto, they'd have to answer to Byrne. Well-taught by her late, great boss, Byrne knew she controlled the crucial lever of power. For Chicago Democrats this meant only one thing: follow orders or find another job. To the Democratic party it meant: unite now or divide the party and kiss goodbye the chances of controlling the 1981 reapportionment. They followed orders. Daley, himself a Chicago Democrat, became a renegade.

H.B. 2796, which overnight became the Thompson-Byrne "penny compromise" carried as sponsors both Majority Leader Michael Madigan (D., Chicago) and Ryan when it was introduced in the special session.

H.B. 2796 removed only one cent of the state sales tax, effective January 1, 1980. Taxpayers would realize only a 20 percent cut in the sales tax, but it would come immediately. Presumably, the General Assembly will consider further tax relief next spring.

More to the point, H.B. 2796 would not affect the fifth cent of the local government sales tax.

Since the special session was to run concurrently with the regular fall veto session, both the override of H.B. 2564 and the vote on H.B. 2796 were at the top of the calendar when the House got down to work. The stage was set for a showdown: Thompson against the General Assembly; Byrne against Daley.

The override vote on H.B. 2564 came on October 16. Downstate Democrats, who found themselves serving as spokesmen for the larger cut, rallied around the battle-worn argument: Despite Thompson's talk of a contingency fund, there was a surplus in the general funds, possibly $236 million, or enough to cover the cost of axing the entire tax.

The downstate Democrats went on to demand that Chicago Democrats dismiss Byrne's highhanded directive. Despite STOP'S claim to be a solid coalition, it couldn't offset the defection of Chicago Democrats, which was important because it included most of the blacks. The override died, 11 votes short of the 107 necessary for a three-fifths majority.

The roll call showed 96 yes, 42 no, with 23 voting present and 16 not voting (due to absence or illness). The Chicago Democrats, carefully testing the coalitions's strength, simply withheld their votes. Of the 23 voting present, in effect a no vote, 16 were Chicago Democrats, including three blacks. Of the 19 not voting, nine, including four blacks, were Chicago Democrats. Only three of the Chicago Democrats actually voted no, including two blacks. Only four of the 14 blacks in the House voted yes.

However, the suburban Republicans held firm; only four voted no.

Plan number two
The override was only the first part of STOP's plan of attack, however. Plan number two called for amending H.B. 2796, turning the penny cut back into a phase out of the full five cents. The amendment vote, unlike the final action of the override, would need only a majority of those voting. Given the right attendance figures, the 96 yes votes from the ill-fated override would be more than enough.

The main amendment to H.B. 2796 was sponsored by downstate Democrat Fred J. Schraeder (D., Peoria) and like H.B. 2564, it would have phased out the four-cent state sales tax over five years.

December 1979/ Illinois Issues/ 25

One cent would have been cut January 1,1980, with additional one-cent cuts in September 1980, 1982 and 1984. Like the governor's compromise, the Schraeder amendment did not affect the fifth cent of local sales tax.

The House Revenue Committee, however, shot down the amendment 10-12 on October 30. Twelve of the 27 members are Chicago Democrats.

The Schraederamendment was resurrected when H.B. 2796 came up for second reading on the floor that night. It was Daley's third and final chance in the House. This time the Chicago Democrats slowly strangled it to death in a tense vote that finally deadlocked at 82-82. With the vote hovering at 83-82, Rep. William F. Mahar(R., Home-wood), a suburban Republican who two weeks earlier had voted to override, switched his vote from yes to no. That killed the amendment. Only three had voted present and only 10 had not voted. In the two weeks since the override, STOP had gained three votes, but lost 17, or a net loss of 14 votes.

Blacks and suburbs
In the final analysis, downstate Democrats couldn't win without the Chicago Democrats. And Chicago blacks found themselves trapped between constituents who had everything to gain, and the mayor — who had the gun. Some cried for forgiveness. Some cursed Byrne. But nearly all voted no. From their point of view, they had no choice.

The blacks weren't the only ones under fire. STOP had, after all, come dangerously close as far as Thompson was concerned. The suburban Republicans were threatened more subtly. The strongest weapon Thompson had was his threat to veto his own bill, if the coalition succeeded in turning the penny cut back into a phaseout of the full four or five cents. With the blacks boxed in by Byrne, the suburban Republicans didn't want to take the blame for causing a second veto — or no sales tax relief at all. Republicans have to run for reelection too.

The final House vote, when it came the next day, October 17, was anti-climatic. The Scoreboard lit up in seconds: 168 yes, 5 no, none present, four not voting.

Daley hadn't STOPed the Thompson-Byrne penny compromise from rolling out of the House. But there was always the chance that Plan Two could be resurrected in the Senate, where the Daley forces could attempt to amend the bill. Only a majority of those voting would be needed. If STOP succeeded in amending H.B. 2796 in the Senate, the penny would be forced to roll back to the House for concurrence. A STOP win in the Senate could conceivably produce the single vote needed in the House. If not, the penny would land stalemated in conference committee.

The first amendment vote came a week later, November 6, in the Senate Revenue Committee. The amendment was sponsored by Sen. George Sangmeister (D., Mokena) who had sponsored H.B. 2564 in the Senate. Like H.B. 2564 and the Schraeder amendment, the Sangmeister amendment phased out the four-cent state sales tax, but over the next three years. Like the others, taxpayers would see a two-penny cut in calendar 1980. Like the penny compromise, it didn't affect the fifth cent of the local sales tax. The difference lay in its obvious political expediency.

Because tax relief would not become effective until the start of a new fiscal year, H.B. 2796, if so amended, would need only 30, not 36 or three-fifths majority to pass. And when the bill went back to the House for concurrence, it would need only 89, not the 107 three-fifths majority, to pass there.

The Sangmeister amendment hit a snag immediately when Senate President Philip J. Rock named himself to replace vacationing Sen. Robert J. Egan (D., Chicago) as chairman of the Revenue Committee. Defection from what had been the Democratic Party's position, obviously made Rock uncomfortable. But having made the decision, he apparently felt compelled to support Byrne's position in the Senate showdown.

Nevertheless, the Sangmeister amendment went with H.B. 2796 to the Senate floor. It seemed like STOP had scored at last since the Senate committee was packed with Chicago Democrats (five of 11 members) and Rock had chaired the committee meeting.

Unlike the House, there were two hours of debate in the Senate when the Sangmeister amendment came up the next day, November 7. Nearly every one of the 59 members wanted to speak. But it was Sen. Mark Rhoads (R., Western Springs), a suburban Republican, who seemed to bring the bitter fight between downstate Democrats and Chicago Democrats out into the open. Rhoads was right when he characterized the debate as shedding "more heat than light" on the purported issue. It had come down to one thing in the final showdown: power. It was a struggle that pitted Byrne against Daley.

Byrne won. STOP's last plan failed.

The final day
It was Daley who spoke to salve the wounds. "I know more about political tactics than anyone else," he quietly reminded the downstaters standing with him. "There were no deals. Senator [Frank D.] Savickas [D., Chicago] and Sen. Rock guaranteed us there were no deals," he said, referring to charges by downstaters that Byrne had agreed all along to support Thompson on the sales tax when he supported her on the road program. It seemed ironic that Daley was defending Byrne. Perhaps it was the Democratic party, especially the Chicago Democrats, that Daley defended, Byrne or no Byrne.

In a replay of the Schraeder amendment vote in the House, the Sangmeister amendment went down in another tense, tie vote — this time 27-27.

Of the 59 Senate members, none had voted present and only five had not voted. The roll call showed the basic party-line split, with 20 of the 28 Democrats voting yes and 19 of the 26 Republicans voting no.

Rock, who had abdicated the chair to Savickas, the better to work the floor, had delivered Byrne's votes: eight Chicago Democrats had joined the 19 Republicans to tie the vote; none were blacks. The no vote would probably have been larger if not for those not voting; four of the five were Chicago Democrats.

But the deciding vote was cast by Sen. Sam M. Vadalabene(D., Edwardsville), a downstater who had co-sponsored the Sangmeister amendment.

The final vote in the Senate, when it came the next day, November 8, was fully as flat as that in the House: 54-1, with none voting present and four not voting.

Daley had failed to STOP the Thompson-Byrne penny compromise. Thompson wasted no time in signing H.B. 2796 when the penny landed on his desk a few hours later.□

26/ December 1979/ Illinois Issues