It will take a massive tax increase -- and $2 billion more in cuts -- to reach solvency, group says.Watchdogs or Warthogs?
To become solvent, the state must enact the largest tax-increase package in Illinois history, whack another $2 billion from already starved government programs and wrest major financial concessions from the state's unionized work force, a nonpartisan government watchdog contends.
In a new analysis of Illinois' "horrific" finances, the Civic Federation lays out the painful choices awaiting Gov. Quinn and the Legislature as they stare down an epic $12.8 billion budget deficit that has choked the flow of state cash to public universities and schools, transit systems and social-service agencies to the point of economic collapse.
"Doomsday is here for the State of Illinois," said Laurence Msall, the organization's president.
The Civic Federation recommends that the state income tax be increased from 3 percent to 5 percent for individuals, that retirees' pension and Social Security checks be taxed for the first time at the same rate as workers' paychecks, and the tax on cigarettes be raised by another $1 per pack. The group also favors getting rid of $181 million in corporate tax breaks.
But AFSCME Council 31, state government's largest union, has shown no interest in having its members -- who have accepted furloughs and deferred pay increases -- pay more toward their pensions and health care or in establishing what is known as a two-tier pension system where new employees would receive a less-generous retirement package than existing workers.
"Since this proposal to slash $2 billion exempts education and health care, it would mean reducing human services and public safety," AFSCME spokesman Anders Lindall said. "We think that's reckless, especially in a recession that's driving demand for public services up, not down."
House Minority Leader Tom Cross (R-Oswego) has taken a tax increase off the table, instead pressing for budget cuts and pension reforms and noting the state's fiscal crisis bloomed under seven years of Democratic-crafted budgets that Republicans didn't vote for.
Any group calling for income and corporate tax hikes is a warthog not a watchdog.
I side with the republican minority leader Tom Cross who has taken a tax hike off the table. Balancing the budget deficit must come 100% from union salaries, union pension plans, and union membership.
The state's number one priority should be to eliminate programs entirely, privatize everything that remains, and kill defined benefit pension plans for all public workers.
The state's number two priority should be to eliminate programs entirely, privatize everything that remains, and kill defined benefit pension plans for all public workers.
The state's number three priority should be to eliminate programs entirely, privatize everything that remains, and kill defined benefit pension plans for all public workers.
Civic Federation Calls For Big Tax Hikes
The Sun Times says Only big tax increase can dig out Illinois
The respected Civic Federation put it on the line today: Illinois desperately needs a major income tax increase to clean up the financial mess it's in.Leadership or Insanity?
That's called leadership.
Nobody likes higher taxes, especially at this time of year when we're all filing our tax returns.
But the State of Illinois is maxed out.
Leadership is calling for a new way of doing business. Leadership is not calling for more tax and spend.
Tax hikes benefits unions and big government, two things that desperately need to shrink dramatically.
Tax hikes will drive away businesses, shrink growth, and cripple already overburdened taxpayers. The proposal is not leadership, it is insanity.
Overburdened Taxpayers
Tax hikes should not be in the equation.
Workers are taxed enough. The goal should be to reduce taxes, not hike them.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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