SPRINGFIELD - Governor Rauner's comments Wednesday indicating his willingness to compromise on a "grand bargain" to achieve the state's first budget in 18 months is causing one of the governor's long-standing, most loyal supporters to pause.
Illinois Policy Institute's CEO John Tillman responded to the governor's third budget address saying the proposed budget doesn't touch the state's foundational budget weaknesses. Tax hikes don't work without major policy adjustments.
"Springfield doesn't deserve another penny from Illinois families," Tillman said. “Gov. Rauner is right that Illinois needs structural reforms to become attractive to job creators and residents. The so-called ‘grand bargain’ that has been talked about does not do this.
“The proposal that has been worked on by state Sens. John Cullerton and Christine Radogno would raise taxes without any meaningful pension reform, property tax relief, or promise to put Illinois on a better economic path going forward. It is unfair to all Illinois residents, but unfortunately the state’s most vulnerable will be hit the hardest.
“We know what happens when the state raises taxes without making structural reforms. In 2011, former Gov. Pat Quinn raised taxes without reforming spending. Every household paid thousands of dollars in higher taxes, and the state collected $31 billion in additional revenue. Where did that $31 billion go? It didn’t go toward repairing our economy or erasing the backlog of unpaid bills. It did nothing to fund programs for the poor. Most of that money went to highly paid government workers."
And what happened to the state during and after that tax increase? Tillman asked.
- Bloomington, Carbondale, Peoria and the Quad Cities are already in recession, and four more Illinois metro areas are on the brink of economic collapse, according to Moody’s Investors Service.
- Illinois lost a net 300,000 people to other states from 2011 to 2014 due to out-migration, according to the U.S. Census Bureau. During the four years of the full income-tax hike Illinois lost $14 billion in annual adjusted gross income, or AGI, to other states, on net. The out-migration of income cost Illinois $2.7 billion in 2011, $3.9 billion in 2012, $4.2 billion in 2013 and $3.4 billion in 2014. That compares with an average annual loss of $2.2 billion of AGI per year over the 16 years prior to the tax hike.
- Nearly 20 percent of Illinois homes are deeply underwater on their mortgages, the second-worst in the U.S., according to realtytrac.com.
“Illinois can’t weather another tax increase. And the state legislature’s insistence on doing nothing and standing in the way of reform make it clearer than ever before that Springfield doesn’t deserve another penny from Illinois families.
“Illinois does not have a tax problem; it has a spending problem.
Tillman pointed to a budget the Illinois Policy Institute proposed recently, which, Tillman said, has outlined precisely how the General Assembly can balance the state budget without tax increases, and how the state can enact pension reform that complies with the Illinois Constitution as it is written.
"In our 52-page proposal, ‘Budget Solutions 2018,’ we show what real reform looks like. And our proposal is based on measures that all have been backed legislatively," he said.
“We’ve shown that not only is it possible, but it is also economically necessary. Illinois has reached a point of no return. A balanced budget with spending reform is the bare minimum that our legislators must do if there is to be any hope of turning around our state. It’s also the moral thing to do. It’s not right to ask Illinois families to send thousands of dollars to Springfield while politicians continue the same antics.
“Many Springfield insiders have called our budget plan impossible – that’s because they are used to only doing what is politically possible. Any so-called ‘solution’ crafted for the 177 politicians in Springfield is not good enough. Illinois must pass a budget that was made for the 12 million Illinoisans.”