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To pay for Gov. Quinn’s tax hikes and the rising cost of state pensions, Illinoisans will lose out on an extra week’s paycheck this year.
In January, Gov. Pat Quinn signed a 67 percent income tax hike into law. While it was sold as necessary to pay down the state’s operating debt, the comptroller is now reporting that Illinois’s debt backlog at the end of the year will be around $8 billion – about the same amount as before the tax hike. Why? Most of the extra money is going to making the state’s growing pension payment.
The average Illinois household was set to spend $10,988 in state and local taxes this year, but the average state tax bill will climb by an extra $1,594, thanks to Gov. Quinn’s tax increase. This increase is nearly equal to what an average Illinois household spends annually on clothing.
Another way to look at the higher tax bill is to estimate the additional time spent working to pay for it. Before the tax hike, it took 58 minutes per workday to pay the average state and local tax bill. Now, it will take 67 minutes because of the state income tax increase. Over a full year, this adds up to an entire workweek.
Reform the state’s pension system to protect the benefits government workers have already earned for past service and also establish a sustainable system moving forward.
Why This Works
Big picture, Illinois’s economic outlook – and jobs climate – won’t improve until we get our state budget under control. And balancing our budget requires reforming pensions.
It’s a path a majority of Illinoisans support. A January 2011 poll asked likely Illinois voters how the state should address its increasing pension payment. Sixty-four percent of respondents said that benefits for current public employees should be reduced, while just 26 percent supported raising taxes.
Everyone is feeling the pain from losing an extra week of pay this year. Lawmakers in Springfield can ease that pain by enacting pension reform that rights the state’s fiscal ship and sets all Illinoisans back on the path to prosperity.
All of the Illinois Policy Institute's recent research on pension reform is available at www.illinoispolicy.org/pensions.Work an Extra Week to Pay for Gov. Quinn’s Tax Hikes
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