Illinois Budget Pressures Won’t Ease
A report from the University of Illinois' Institute of Government and Public Affairs lays out options for lawmakers if they want to put Illinois on a path toward fiscal stability.
Among other things, researcher said even if the state keeps its 5% income tax rate – which is set to drop in just over a year -- Illinois is still on a path to spend more than it takes in.
And if the income tax rate does roll back, economist David Merriman predicted the deficit will reach $14 billion by the year 2025.
“(It’s) a very large percentage of the budget, and would be probably an intolerable situation,” Merriman said.
“We wouldn't be able to have contractors work for us because we wouldn't be able to promise to pay them the money we owe them.”
Merriman, who co-authored the IGPA's study, said lawmakers should think about how to engineer the state's budget so it can be balanced.
That could mean an entire re-do of the state's tax structure.
Instead of taxing everyone's income at the same rate, Illinois could move to a graduated income tax --- though that would mean amending the state constitution. Or it could mean beginning to levy a sales tax on services, rather than just goods.
Merriman won't say what's the best course. But he said voters need to challenge politicians who claim Illinois can get its budget in order just by making cuts.