By state Rep. Barbara Flynn Currie (D-25)
Whither the budget?
What is the long-term solution for the state’s budget challenges? Clearly the first priority is adequate and responsible funding for the state’s current fiscal year. While courts have, so far, mandated ongoing payments to some programs, not every critically important program is protected. These forced payments are based on last year’s spending. That guarantees the state will run out of money long before the end of the current fiscal year, as income tax rates fell Jan. 1.
What it will take to stabilize state finances, while protecting the vulnerable, is a balanced approach to the state budget that includes both spending reductions and new revenues. Many groups and budget experts agree.
That includes the Civic Federation, an independent, nonpartisan government watchdog organization founded in 1894. Its members include the leaders of Chicago’s business and corporate community.
The Federation proposes a five-year plan that it believes will restore fiscal stability to the state of Illinois. The Federation notes that the repeal of a portion of the income tax last January pushed the state off a fiscal cliff: the sudden 25 percent drop in income taxes, it maintains, should be rescinded and retroactively increased until 2018. The Federation plan includes additional ideas for new revenues. One, for example, is to expand the sales tax base to include some services. When the sales tax was first adopted, ours was a sales economy. Families used to buy lawnmowers, which are taxed. Families today increasingly buy lawn care services, which are not taxed.
The report calls for stronger controls on state spending, with reductions that would amount to a quarter-of-a-billion dollars a year over the next five years. The report isn’t wrong: the state does need to cut. The budget the General Assembly sent the Governor cut spending close to that amount, although higher overall budget totals reflected mandated increases in pension contributions.
The Federation’s report recognizes that the state’s fiscal crisis imposes real hardships on our low-income neighbors. The programs they depend on face budget cuts, even though they are by no means immune from paying the higher taxes. To help struggling families, the Federation recommends an increase in the state’s Earned Income Tax Credit (EITC). I sponsored the measure that first created the state EITC and I’ve worked to expand the relief it provides low-income, working families.
I don’t agree with each of the suggestions in the Civic Federation’s report. But that it seems an unlikely group to lead the charge for new taxes gives, to me, special credence to its analysis of our serious fiscal problems. Beyond the Federation’s proposals, other ideas to increase revenues are also on the table. It is my hope that the Governor, lawmakers and the Illinois body politic sit up and take notice: this state needs budget cuts—but it also needs an infusion of new money in order to stabilize and sustain our finances.