Illinois FY 2015 budget paves way for income tax hike sunset, but falls short overall

On June 30, Illinois Gov. Pat Quinn signed the state budget for the next fiscal year, which starts July 1. The good news is that this budget does not make the 2011 state income tax increase permanent; all Illinois taxpayers are still on track to see income tax relief next year. The bad news is...

On June 30, Illinois Gov. Pat Quinn signed the state budget for the next fiscal year, which starts July 1.

The good news is that this budget does not make the 2011 state income tax increase permanent; all Illinois taxpayers are still on track to see income tax relief next year. The bad news is that the budget preserves the status quo in Illinois, does nothing to address the state’s horrific fiscal health, ignores reform and kicks tough decisions down the road. Consider the following:

• Illinois’ flawed method of funding education will continue. Instead of money following the students, some of it will subsidize economic development projects for TIF districts.

• The state’s massive pension debt will continue to crowd out resources for schools, roads and public safety.

• Those who rely on government most will continue to struggle to find the care they need.

• It will be no easier for the hundreds of thousands of people who woke up this morning either unemployed or underemployed to find a job in their state.

Quinn did make a few last-minute changes. He vetoed $250 million for renovations to the Capitol building and will put half the state’s air fleet up for sale.

Despite those minor changes, the fiscal year 2015 budget is still slated to exceed $35 billion. Part of the spending will cover the state’s record-setting pension payment, nearing $6.5 billion.

To put this budget into context, state revenue totaled about $36.7 billion during the 2014 budget year and $36.4 billion in 2013. In 2012, state revenues were closer to $34 billion. This means that even with the tax-hike sunset, the state is spending more than it was just a few years ago.

The 2015 budget is bad leadership on paper. And hardworking Illinois families and entrepreneurs will suffer because of it.

Things need to change in Illinois. The real issues dodged by the 2015 budget will make next year’s budget an even bigger battle. General Fund revenues are projected to drop to roughly $32 billion in 2016, the first full year of the tax-hike sunset.

The biggest concern in the coming months is the potential for state politicians to make the tax hike permanent when the Illinois General Assembly reconvenes for a lame-duck session in January 2015.

But now politicians have a full year to plan for the big reforms necessary to balance the budget. There’s simply no excuse for playing the same budget games next year. Illinoisans deserve better.