The editors of the Wall Street Journal weigh in on Illinois’s ongoing political kabuki:
The deal now being crafted in the state Senate would increase the state’s flat income-tax rate to somewhere around 5% from the current 3.75%. That is close to the increase the state endured in 2011 when former Governor Pat Quinn raised the income tax to 5% from 3%. That tax hike partially expired (declining to 3.75%) on December 31, 2014 and Democrats say restoring it is the secret to solving the state’s problems.
That’s hilarious since the years of an elevated income tax produced one of the country’s weakest state economic recoveries, with bond-rating declines in Chicago and staggering deficits statewide. The state has a $11.9 billion backlog of unpaid bills and $130 billion in unfunded pension liabilities, according to the state’s Commission on Government Forecasting and Accountability.
In 2011 Senate President John Cullerton said the point of the temporary hike was to pay pensions, “pay off our debt [and] to have enough money to pay the interest on that debt.” But the roughly $31 billion it generated made hardly a dent. Since 2011 the unfunded pension liability in Illinois has grown by $47 billion, even as the tax hike was mostly spent on pensions. Meanwhile, Democrats won’t change the state constitution to allow for pension reform that won’t be overturned by the Illinois Supreme Court.
I’m not opposed to a tax hike out of hand but there are limits. Here in Chicago if my property taxes double every triennial assessment as they did this time around it will drive me out. I can’t afford that. Very few can and it hits the poor the worst of all. Even those who rent rather than own are affected by increases in property taxes.
Thinking that absent any pressure to introduce reforms that would actually help the state of Illinois our state legislators will act out of public spiritedness requires the willing suspension of disbelief in our fiscal drama. We don’t just need higher taxes. We need a prospering economy and the smaller tax base as 40 years that Mike Madigan’s Speakership has brought us makes our problems that much harder to solve.