As new Illinois Gov. J.B. Pritzker prepares to make his first budget address next week, Deputy Gov. Dan Hynes on Monday released the study "Digging Out: The Rauner Wreckage Report." It estimates a $3.2 billion budget deficit, a looming $9.2 billion pension bill due next year and the state's unpaid backlog of bills – also in the billions.
How can lawmakers and the governor tackle the state’s overwhelming financial burdens?
A progressive income tax is one of the ideas being floated, but that would require an amendment to the state’s constitution. Last week, the Civic Committee of the Commercial Club of Chicago recommended $6 billion in tax hikes.
“Illinois needs to repair its fiscal condition, which is the biggest impediment to the strong economic and job growth our state needs,” said Jay Henderson, chairman of the Civic Committee’s Tax Policy Task Force. “It is a solvable problem, and we have laid out a five-year framework that does it.”
Among other recommendations, the group says the income tax rate should be hiked to 5.95 percent from 4.95 percent, and the corporate tax rate should go up from 7 percent to 8 percent.
But some fear that higher taxes could drive more people out of Illinois.
“We need to find a way to put some spending restraints in place,” said House Minority Leader Tom Demmer, R-Dixon.
To drive revenue, other options are on the table, including a Chicago casino, sports betting, recreational marijuana, taxes on vaping and closing tax-haven loopholes.
“There’s a set amount of money that’s available for gaming revenue, and people choose different ways to spend it,” Harris said. “We just need to figure out as a state [how to] maximize the revenue we bring in.”
Other issues facing the Legislature this session include raising the minimum wage to $15 by 2025, which passed the Illinois Senate last week. But Republicans want to negotiate a different bill.
“Small businesses across the area have already complained about the high cost of doing business in Illinois,” Demmer said. “This is another pressure on their back.”
Harris, however, said businesses have benefitted from their own decisions to pay workers at least $15 per hour.
“What we’ve seen is a better quality workforce, people more committed to their jobs,” he said.
Harris and Demmer join us in conversation.
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