Illinois' New Governor Proposes a 50% Tax Hike To Close Budget Gap Caused By Years of Reckless Overspending

Illinois’ New Governor Democrat Pat Quinn, about whom I recently posted (link), has just floated the idea of a 50% hike in the personal and corporate income tax rate, dashing hopes that he would not be just another anti-growth tax and tax and spend and spend and tax and spend Democrat. In his first opportunity to show his true colors now as the state government’s top politician, the man who long cultivated the image of the tax-payers’ champion and advocate for fiscal responsibility has just switched sides.

As revenues fall for all levels of government, all the talk now from Democrat politicians is about the grave need for tax hikes. No mention of how in recent years government spending has grossly outstripped population growth. These politicians are happy and anxious to expand government spending when revenues rise but cannot find much to cut when revenues drop. All we get are visions of looming catastrophe if every proposed tax increase isn’t pushed through.

The facts aren’t pretty, and neither is the reckless malfeasance by Illinois politicians.

According to the Illinois Policy Institute, Illinois has “a $9 billion budget hole … and our job and income growth has stagnated. Meanwhile, spending is skyrocketing — up approximately 45% since 1998. In the same time period, population has grown only 4%” (link). These stats are staggering -- in 10 years, Illinois state spending has gone up 45% while the population has gone up only 4%.

How did Illinois get into this mess? According to Charles N. Wheeler III, writing in the November, 2008, issue of Illinois Issues Magazine:

Illinois’ fiscal problems are deeper and more longstanding, the inevitable consequence of budget and fiscal policies that habitually have the state living beyond its means. Indeed, not since FY 2001 has the state had enough money on hand to cover outstanding bills — that’s seven straight budgetary deficits, with an eighth a sure bet for FY 2009. “Illinois’ deficit is not just a one-time aberration resulting from unforeseen economic conditions … ,” noted the Center for Tax and Budget Accountability, a nonpartisan, nonprofit think tank. [Unsound budgetary] tactics “have allowed the state to maintain public service levels that it does not have the fiscal capacity to afford,” said a Center analysis.

Wheeler also noted stated that Medicaid, education and human services account for roughly $8 out of every $10 spent from general funds. Oh, and by the way, Steve Malanga wrote in the Wall Street Journal last November (link) that “according to a study published by the Pew Charitable Trusts' Center on the States, … Illinois … has the largest percentage of unfunded pension liabilities among the states [and] actually cut its contributions to pension funds by $2.3 billion in the flush years of 2006 and 2007….” According to the Institute for Truth in Accounting, Illinois' pensions and long-term liabilities amount to $26.6 billion.

So for years Illinois politicians have spent far beyond the state’s means. They have what Dennis Byrne has called "Budget Deficit Disorder." They’ve made themselves heroes at home to inattentive and hoodwinked tax payers, while kicking the bill down the road by budget legerdemain. But now the jig is up, the music has stopped, and the game they’ve played is out in the open. And so what’s Quinn’s solution? Cut all those programs we couldn’t afford all along and should never have been funded in the first place? Nope – just raise taxes now to fund them out in the open, without budget trickery. Apparently this is Governor Quinn’s vision of honest government. Rather than stifle economic growth, retard job creation, and bankrupt Illinois behind our backs, he’s wants Illinois politicians to do it out in the open.

John M Greco