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Think Tank: Seizing Tax Refunds Won’t Help City Budget

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City Council Chambers

A Chicago City Council meeting. (Credit: CBS)

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UPDATED 02/16/12 7:12 a.m.

CHICAGO (CBS) — The head of a conservative think tank calls the plan to intercept ticket scofflaws’ tax refunds a desperate money grab by the city.

As WBBM Newsradio’s John Cody reports, Illinois Policy Institute chief executive officer John Tillman says the $5 million to $20 million to be gained by intercepting state tax dollars from scofflaws will not change the overall problem, which he says is government overspending.

LISTEN: WBBM Newsradio’s John Cody reports

“The only way to reform what’s going on in the city is to reform the (Tax Increment Financing districts), which are siphoning off tax dollars and putting them into development – that’s an easy fix,” he said. “Number two would be reforming the entire public employee compensation from wages to benefits, and obviously pensions. There is some movement on that, but until that is done, you cannot fix the major problem.”

Tillman also says Chicago needs to open up more city job functions to competitive bidding to reduce operational costs.

Meanwhile, Civic Federation chief executive officer Laurence Msall says the tax intercept plan is justifiable, but will not affect the big picture.

“It’s unfortunate, but the city is in a financial position that it needs to look underneath the couch cushion, basically, to find the resources necessary to maintain this government, because we are in a very difficult financial position,” he said.

Msall says city intercept of state tax refunds is essentially the same as blocking license plate renewal for people with unpaid traffic tickets.

The City Council on Wednesday approved the measure allowing the city to seize income tax refunds for scofflaws who have not paid judgments or parking ticket fines. If your tax return is less than what you owe, the remainder can be taken out of future refunds.

Mayor Rahm Emanuel said deadbeats must pay.

“We will not be in favor of deadbeats and delinquents who have been sitting on the sidelines, putting the burdens on the families in your district and throughout the city of Chicago,” the mayor said.

City officials said Chicago is owed some $400 million in unpaid tickets.

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