Illinois Democrats, with the help of a few weak-kneed
Republicans pressured and duped into joining them, just overrode the Republican
governor’s veto to push through a massive, permanent income tax hike (for
individuals, a 32% increase up to a shade shy of 5%). Not many years ago, Democrats passed a
temporary four-year massive (67% for individuals) income tax hike that they
said would right the foundering ship that is Illinois finances. To no one’s surprise, after the period of
higher taxes Illinois was in a deeper financial hole than it was before all
that additional tax revenue because the state’s profligate spending was never
reduced. Illinois doesn’t have a revenue
problem, it has a spending problem. The
Democrat party formula is to spend recklessly on their constituency groups, and
when the financial meltdown inevitable occurs pressure enough dim-witted
Republicans into supporting a tax hike (Think of the kids! What about the schools!); then repeat the
cycle all over again.
In the last 10-15 year, Illinois’ spending has zoomed while its
population has shrunk. Big dollars go to
Medicaid and other social services that keeps dependents voting Democrat, and big
dollars also go to current and retired government workers. Illinois state workers are the highest paid,
adjusted for cost-of-living, of any state in the nation, even before generous
retirement benefits kick in. (In 2016,
there were 17,638 retired state and local workers whose annual pensions were
over $99,000, with 15 over $348,000!) And
Illinois has far more units of government than any other state, and all of those
townships and forest preserve districts and library boards and water reclamation
districts have employees and expenses. After
all that spending, there’s not much cash left over for services for the regular
people, otherwise known as the taxpayers.
And those taxpayers are voting with their feet, as Illinois and
Cook County (home of Chicago) lead the nation in population loss. The Illinois tax base is eroding fast, and
yet the Democrats have chosen to raise taxes rather than cut spending. Higher taxes without spending reform will
just accelerate the population exodus and the state’s financial decline.
I have no sense of what the ultimate resolution will be for Illinois,
which is arguably already in the direst financial straits of all the states
even before this tax hike. Like the City
of Chicago and the Chicago Public Schools System, Illinois is functionally bankrupt. I blame chronic, excessive spending that increasingly
benefits Democrat party constituencies rather than state residents as a whole,
combined with chronic underfunding of pensions that appear overly-generous and
based on increasingly over-market salaries.
Throw in the usual fraud and abuse, like pension-spiking, to the
mix. Although the nominal rate of the
Illinois state income tax may seem not particularly high even at 5%, given the
very high property and other taxes some analysts say Illinois residents have
the highest overall tax burden in the United States. Overspending and mal-spending continue
seemingly unabated, and real pension reform remains a pipedream.
Increasingly, the political divide in Illinois is between
those who benefit from the state and local government spending largesse, like
current public employees, government pensioners, and welfare recipients, and
those who foot the bill. While the
beneficiaries feed at the trough the bill-payers are getting fleeced, and
increasingly they’re leaving for better pastures.
R Balsamo
