By Ben VanMetre -
The Illinois General Assembly is currently passing the series of appropriation bills that will make up Illinois’ fiscal year 2014 budget. Lawmakers are gearing up to increase spending to more than $35.4 billion, up approximately $2 billion from what was approved for the current fiscal year.
The budget handouts being passed around the Statehouse describe this as an “honest budget,” thesame language Gov. Pat Quinn used when he proposed his version of a budget back in March. The truth is, not only is this gearing up to be the largest budget on record, but it’s also one of the most dishonest budgets to date.
This budget:
- Fails to prepare for the legally required tax-hike sunset. In 2011 lawmakers passed a record 67 percent tax hike. The increased personal income tax rate is legally required to sunset to 3.75 percent in January 2015 from the current 5 percent. That means the state will have less revenue in 2015 than it does today. In fact, Illinois’ projected revenue for fiscal year 2015 is approximately$33.4 billion, or $2 billion less than the projected $35.4 for fiscal year 2014.
Any responsible family in Illinois who knew they were going to start taking in less income in a year would begin the belt-tightening now; that is, if they hadn’t already started. But lawmakers did nothing in the fiscal year 2014 budget that would allow them to keep their promise and sunset the tax hike in 2015. They actually went the other way and made the sunset even more difficult to follow through on.
- Deliberately ramps up spending to set the stage for even higher taxes. Sunsetting the tax hike is more than a promise – it’s in the statute. Lawmakers should have used the fiscal year 2014 budget as an opportunity to make the cuts and reforms necessary to sunset the tax hike next year. Instead, they intentionally ramped up state spending. Why? Pushing rapidly growing state spending even higher this year sets the stage to make lowering the tax rate next year look like a political impossibility.
Closing out the next fiscal year with record spending simply gives lawmakers a few talking points on the “draconian” cuts they’d be forced to make without a little more revenue in the state’s coffers. Not only does this set the state to make the tax hike permanent (as was already proposed during the current session) but it also gives lawmakers an out to make the case for another multibillion tax increase – a progressive income tax. Quinn has already said that passing a progressive income tax is “one of my goals before I stop breathing.” Another tax hike may sound unlikely as the recent one was a complete flop but the appropriations bills being passed now show that lawmakers are gearing up for record breaking levels of state spending, which, as Illinoisans should know all too well, means higher taxes.
- Ignores reform. Perhaps one of the most dishonest parts of the planning that took place around this budget is the fact that lawmakers simply ignored reform, and in some cases actually made things worse. There’s still a small chance for the General Assembly to pass some kind of pension reform today, but nearly every plan introduced during this session would merely tinker at the margins of reform or make the problem even worse. The only bill that actually had a chance to address the pension problem was House Bill 3303 (and the accompanying Senate Bill 2026), but a majority of those in the Statehouse were unwilling to move forward with reform this bold.
And lawmakers passed the Medicaid expansion, one of the major provisions of ObamaCare. Not only are the costs of implementing an expansion of Medicaid completely unknown, but the passage of this bill also will overload a program that is already on the brink of collapse.
Lawmakers already broke their promise regarding how they were going to use the tax-hike money. They said the tax hike was designed to pay down the state’s unpaid bills and restore fiscal order. Instead, 80 cents of every 2012 tax hike dollar went to pensions. That was broken promise number one.
Now they are setting up the fiscal year 2014 budget to break another tax-hike promise by ramping up spending instead of preparing for a sunset. That’s broken promise number two.
Higher taxes will only end with more broken promises and even bigger problems in Illinois. Lawmakers haven’t earned the right to take more taxpayer money. And the fiscal year 2014 budget is proof of that. This is what failed leadership looks like. It’s time for change.
Ben VanMetre is Senior Budget and Tax Policy Analyst at the Illinois Policy Institute
