In his “State of the State” message, Illinois governor Pat Quinn, the former Lt. Governor who took over the job when the previous governor, Rod Blagojevich, was impeached and removed from office, has called for a sharp tax increase:
Gov. Pat Quinn today called for a 33 percent increase in the state income tax rate to raise money for education and ease deep cuts he’s proposed in his new budget plan.
In his short budget speech to the House and Senate, Quinn argued that an income tax “surcharge” would be enough to restore Illinois’ education budget to current levels and allow the state to get caught up on some of the millions owed to public schools, community colleges and four-year universities.
Quinn wants to increase the personal income tax rate from 3 percent to 4 percent — a 33 percent increase — with the corporate tax rate rising from 4.8 percent to 5.8 percent. The tax hike would bring in $2.8 billion a year.
“I believe this 1 percent for education makes sense, and I think the people of Illinois will understand. We must invest in the future, even in these tough economic times,” Quinn said. This is urgent. We don’t have six months. We don’t have six weeks. I challenge the General Assembly to take immediate action to enact the 1 percent for education initiative.”Last year, Quinn unsuccessfully tried to raise the personal income tax rate from 3 percent to 4.5 percent and provide some tax relief.
This may sound like a bold plan but it’s actually an evergreen. Illinois governors, Democratic and Republican, for the last decade or so have been calling for an increase in the income tax. I doubt the proposal will have any more traction than it has had for the last decade.
I don’t think that increasing the personal income tax is abhorrent but, in addition to the problems that will be created by increasing taxes during an economic downturn, I doubt that a tax increase will solve Illinois’s fiscal problems, either. Here’s my counter-proposal. Increase the personal and corporate income tax rates by a half percent each and cut the wages of state employees earning $150,000 or more by 20%, those making $100,000 or more by 10%, and those making $60,000 or more by 5%. If there’s anything left over after balancing a budget based on current spending (rather than on increased spending), put it into the pension fund. If there’s still a shortfall, come back and see me again.
