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Press Release

    The Quiet Push for Massive Tax Increases in Illinois

    03/17/2005

    Many Illinois residents are unaware that there is a quiet but powerful push for a massive tax increase. This bill, entitled HB750 (but also known as SB2 & E.F.R.A.) is slated to increase income taxes by 67 percent (from 3 percent to 5 percent) and the corporate income tax rate 67 percent (from 4.8 percent to 8 percent). There is also talk of expanding the sales tax to cover things like auto repair and health club memberships.

    The legislators pushing this job-killing increase are attempting to wrap its bitter taste in a sugar coating called “property tax relief.” Like most sugar coating, this relief will melt away quickly.

    It is my hope that the citizens of Illinois will awaken in time to make their views known and kill this tax increase. As the State Director for Freedom Works, I have the opportunity to travel around the state organizing grassroots support for good policy. This work has given me the opportunity to meet hundreds of Illinois citizens and hear their concerns. They tell me that they are becoming increasingly frustrated by the apparent inability of the state government to control spending. This frustration is increased by the relentless push for tax increases and tax shifting schemes.

    At the local level, citizens are under continuous pressure to increase property taxes by an over-funded education bureaucracy. At the state level, this same bureaucracy, combined with numerous others; which I affectionately call the "spending lobby"; are clamoring for this massive tax increase without even the slightest nod toward any spending restraint, financial reform, or one iota of accountability.

    In the last few years Illinois companies; including big names like Motorola and small names too numerous to mention; have been forced to lay off workers and cut back spending and investment. Citizens have had to forego things that grow the economy -such as the remodeling or the purchase of a home. Yet the governmental units of Illinois – both state and local – have grown dramatically.

    Yes, we have heard about the number of school districts "operating in the red." But we have also seen some of these same districts (such as Palatine’s District 15) shower 25 percent per year salary increases upon highly paid teachers and administrators only to slough them off on the Teachers Retirement System with a hefty pension liability.

    Now, we all know that many organizations complain that the state "isn't doing enough" to assist their particular need. This may seem true. It may be true that there are programs that deserve a greater level of funding than the state is currently giving them. Frankly, as state legislators, the citizens of Illinois look to you not only to make the proper decisions as to which program gets funded, but also which featherbedded and over-funded bureaucracies deserve a haircut.

    Speaker of the House Madigan is sending his staff around the state with a slide show outlining the budget crisis and the so-called “structural deficit.” In this presentation is a fascinating slide (pictured here) that shows the dramatic growth in education expenditures. Given that education spending has crowded out so much spending on other governmental priorities, it seems only fair that this level of education spending be viewed as a “rainy day fund.” The legislature can begin to draw it down by cutting many state jobs and payments to rich school districts.

    The fact is that the solution to the state's budget problem is simple - assuming that the goal is to enact good policy. But let's be honest here. Enacting good policy is often simple, but becomes complicated by the pressure of the spending lobby-- which we all know funds a great number of legislative campaigns. The simple solution is for the Illinois legislature to simply tell the spending lobby "NO!" Of course, I understand that this is politically difficult.

    One of our goals at Freedom Works (as well as The Coalition for our Children's Future) is to provide grassroots support for legislators who have the political courage to stand up for the taxpayers of Illinois instead of the bureaucracies that are bankrupting the state. Our Coalition is working on developing details on how to reform the state budget. Here, I will start with only a few suggestions.

    First, the area where Illinois can fix many of its budget problems lies in the reform of its Medicare and Medicaid programs. I suggest that each of you look to the research coming out of two excellent Illinois institutions. The Illinois Policy Institute and the Heartland Institute have excellent suggestions as to how Medicare and Medicaid can be reformed at the state level. Their plans show the promise of both reining in spending while improving the quality of the services the state provides.

    Second, it is imperative to reform the Teachers Retirement System. The first step in this process is simple, in that the legislature simply need not renew the Early Retirement Option. This option has become one of the most egregious examples of the type of "shell games" the spending lobby plays with taxpayer dollars. Another step in reforming the pension system would be to place it on solid actuarial footing. This may require increasing the portion that teachers must pay into the system. Converting the system from a “defined benefit” to a “defined contribution” plan may also solve the problem.

    Third, the citizens of Illinois deserve honest and open spending disclosure at the state and local level. Many citizen activists can testify about the difficulty of getting good information from their local governments – particularly the school districts. This is unconscionable.

    Each and every school district in the state should be required to place its budget online – in a uniform fashion – for every taxpayer to see – including account balances, and the sources and uses of each and every district dollar. At the federal level, accounting abuses created the passage of onerous new regulations, yet at the local level, numerous abuses of taxpayer dollars occur regularly.

    In conclusion, I can only remind you that way back in the 1970s the lottery was supposed to fix our funding problem. Then we were told that a small income tax increase was supposed to fix the funding problem. In the mid-nineties were told once again that a small temporary income tax increase was going to fix the funding problem. When this temporary income tax increase was made permanent we were told that it would fix the funding problem. Next, we were told that the advent of gambling would solve the funding problem. Now, we are asked to believe that a massive 67 percent tax increase with a tax-shifting scheme will fix our funding problem.

    The citizens of Illinois are getting sick of it. The truth is that there is no funding problem! There is a spending problem, and the solution is to cut spending.

    Bruno Behrend is the Illinois State Director of Freedom Works and hosts Extreme Wisdom on Chicago's WIND AM. You can contact him at (847) 343-4250.