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Illinois lawmakers are scrambling to cut billions of dollars from the state budget. It follows the apparent collapse of efforts to postpone an income tax cut scheduled to take effect next New Year’s Day.
Jan 1st: 3.75%
When state and local fiscal systems are not designed to work in a modern economy, government must turn to smaller user taxes to fill budget holes to provide needed services, services that really should be funded by primary revenue.
Ralph Martire, executive director of the Center for Tax and Budget Acountability, speaks about Illinois school funding during a forum at the Decatur Civic Center. Pictured from left are Martire, state Sen. Andy Manar, Warrensburg-Latham Superintendent Kristen Kendrick and Todd Covault, director of business affairs for the Decatur School District.
Senator Manar is the driving force behind Senate Bill 16, which seeks to change the distribution of education funds but not the amount. Addressing the amount of funds is an issue to be dealt with later, he said at a forum held on Thursday in the Decatur Civic Center Theater. The forum was sponsored by Archer Daniels Midland Co., WSOY and the Herald & Review. The first order of business is to change the current model of distribution.
To inform the community about the proposed legislation (Senate Bill 16, or SB16), the Education Coalition of Macon County hosted a public forum Thursday evening in the Decatur Civic Center entitled, “Transforming Our Schools: A Panel on Funding Reform.” The panel consisted of Sen. Manar; Decatur Public Schools Director of Business Affairs Dr. Todd Covault; Warrensburg-Latham School District Superintendent Kristen Kendrick; and Ralph Martire, Executive Director of the Center for Tax and Budget Accountability. The event was moderated by Bill Wheelhouse of WIUS radio station and Brian Byers of local station WSOY, and was sponsored by ADM, WSOY, and the Herald & Review.
The Illinois General Assembly has still not decided whether to keep permanent the income tax increase enacted in 2011. Both supporters and opponents are ratcheting up the debate; with supporters, such as various state agencies, predicting dire budgetary circumstances if the increase is allowed to expire. WBEZ talks with Ralph Martire of the Center for Tax and Budget Accountability and Bob Flider, Director of the Illinois Dept. of Agriculture, about how the revenue from the increase has been spent and what the fiscal picture will really look like if the increase is allowed to expire.
Fiscal reality check: Illinois has an accumulated deficit north of $7.5 billion. That's roughly 30 percent of total spending on the core services of education, health care, social services and public safety, which collectively account for more than 90 percent of Illinois' annual service expenditures. Illinois has that huge deficit despite the new revenue generated by the temporary income tax increases (personal and corporate) that passed a couple of years ago, and the $4.7 billion in core service spending cuts made over the past five years.
And things are about to get worse...........
This November Illinois voters will get the chance to ratify two potential amendments to the state's Constitution. The first would establish rights for crime victims. The second would expand protections of the right to vote. Here's hoping a third amendment gets on the ballot -- the one proposed by state Sen. Harmon and state Rep. Mitchell that would allow state income tax rates to track ability to pay by assessing lower rates on lower levels of income and higher rates on higher levels of income. If it gets on the ballot, this initiative would permit Illinois voters to decide if they'd like to be taxed in a manner that is fairer than current law.
Mayor Emanuel's new pension plan was rolled out with lots of talk about bravely facing challenges and sharing sacrifices. It does neither.
What it does do is cut retiree pensions — dramatically. Over 20 years, a retiree in the laborers' or municipal employees' systems will see a 20 to 30 percent reduction in the value of their benefit. That will put many moderate-income retirees at risk of impoverishment, especially since the subsidy for their health care is being phased out.
The systems' unfunded liability will come down at first — mostly due to benefit cuts — then it will start rising again, under a payment plan that is "backloaded by design," said Amanda Kass of the Center for Tax and Budget Accountability. Meanwhile, the plan for police and fire funds seems to be changing the law to postpone tackling their huge unfunded liabilities for several years.
This November, Illinois voters will get the chance to ratify two potential amendments to the state’s Constitution. The first would establish rights for crime victims. The second would expand protections of the right to vote. Here’s hoping a third amendment gets on the ballot — the one proposed by state Senator Harmon and Representative Mitchell that would allow state income tax rates to track ability to pay, by assessing lower rates on lower levels of income and higher rates on higher levels of income. If it gets on the ballot, this initiative would permit Illinois voters to decide if they’d like to be taxed in a manner that’s fairer than current law.
1. More than any other taxes, income taxes are most closely related to a citizen’s ability to pay.
2. Income taxes can easily be tweaked to go easiest on low wage earners.
3. Income taxes are more transparent than property taxes.
4. A tax on income earned in the city nicks suburban commuters for the services they use.