Can't Fix Illinois' Finances Without Tax Hikes, Civic Federation Says
From Crain's Chicago Business
Just days before Gov. Bruce Rauner unveils a budget that is expected to include few new revenues, one of the state's leading taxpayer watchdog groups is proposing a sharply different path.
In a report issued today, Chicago's Civic Federation proposes not massive spending cuts but a range of revenue hikes, including a partial rollback of the income tax cut that took effect on Jan. 1; expanding the sales tax base to include services; temporarily eliminating the sales tax exemption for food and nonprescription drugs; and taxing some retirement income.
The group also wants to slow spending growth to 2 percent from the recent 2.7 percent annual level but warns that much deeper cuts than that may be counterproductive.
In an interview, federation President Laurence Msall said the five-year plan is "not a shot across the bow" at Rauner, who is expected to include few if any new revenues when he unveils his fiscal 2016 budget Feb. 18. Rather, Msall said, the report is "a warning call about how dire the state's fiscal condition is."
But given ongoing debate in Springfield, the report is likely to be seized on by ruling Democrats as proof that the new GOP governor is being unreasonable.
Msall said the federation looked for a way to balance the books and pay the state's bills without making the roughly 20 percent across-the-board cuts in discretionary spending that would be needed. "We were not able to do it," Msall said.
Read more in our daily News Update...
From Crain's Chicago Business
Just days before Gov. Bruce Rauner unveils a budget that is expected to include few new revenues, one of the state's leading taxpayer watchdog groups is proposing a sharply different path.
In a report issued today, Chicago's Civic Federation proposes not massive spending cuts but a range of revenue hikes, including a partial rollback of the income tax cut that took effect on Jan. 1; expanding the sales tax base to include services; temporarily eliminating the sales tax exemption for food and nonprescription drugs; and taxing some retirement income.
The group also wants to slow spending growth to 2 percent from the recent 2.7 percent annual level but warns that much deeper cuts than that may be counterproductive.
In an interview, federation President Laurence Msall said the five-year plan is "not a shot across the bow" at Rauner, who is expected to include few if any new revenues when he unveils his fiscal 2016 budget Feb. 18. Rather, Msall said, the report is "a warning call about how dire the state's fiscal condition is."
But given ongoing debate in Springfield, the report is likely to be seized on by ruling Democrats as proof that the new GOP governor is being unreasonable.
Msall said the federation looked for a way to balance the books and pay the state's bills without making the roughly 20 percent across-the-board cuts in discretionary spending that would be needed. "We were not able to do it," Msall said.
Read more in our daily News Update...