The 66 percent tax increase became a partisan issue largely because it failed to make the reforms and spending cuts needed for a long- term solution to the state’s fiscal problems. Certainly many of us believe that growing the economy is a better solution to increasing revenue but getting out of Illinois’ fiscal hole requires spending reductions too.
SB2505 was touted for its 2 percent cap on spending over the next four years. Those caps only apply to the spending authority not the actual expenditure levels which according to the administration are expected to grow at 8 percent per year. That means the current smoke and mirror games of fiscal accounting will continue.
Spending is expected to grow from $33 billion to $39 billion in four years just when the tax increase will be rolled back by $3 billion. That will create a new structural deficit in the budget.
Raising the income tax is expected to generate an additional $6 billion which is just enough to balance current revenue and expenditures. It doesn’t pay the existing backlog of unpaid bills, rising debt and pension payments each year, or expected health care costs for state employees and retirees.
State Borrowing Continues Even With Tax Increase
The income tax increase does not get the state out of its fiscal hole. A bill passed last week that authorizes borrowing $4 billion to pay for 2011 pension payments and another bill is anticipated in the next month to borrow about $12 billion to pay for current year unpaid bills.
If you are counting, state borrowing obligations of $29 billion are likely to increase by another $16 billion soon without considering the nearly $80 billion owed in unfunded pension and health care obligations. Now you know why many of us said this tax increase does not solve our fiscal problems.
My district phone and e-mail have been inundated with comments from distraught and irate citizens about the income tax and other issues. They had awoken to an issue and wanted to influence government action. If things didn’t go the way they wanted, I wonder if they will now grow disillusioned with their efforts to influence government action and stop sharing their views on issues?
I hope not. I urge citizens to stay engaged in the democratic process; follow the news, monitor the actions of elected officials, and encourage people who represent their views. Like Dr. King, don’t stop trying.
District Office 815-748-3494 or E-Mail to email@example.com
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