Governor Pat Quinn claims that $3.2 billion in new personal and corporate income tax receipts are necessary to put Illinois’s budget back in the black. In a down economy, however, the last thing that families and businesses need to worry about is the dangling noose of higher taxes.

The Illinois Policy Institute recently released an alternative plan: Budget Solutions 2010, which the Chicago Tribune called “a smart new smorgasbord” of spending reforms for our state. Here are 10 “Budget Solutions” steps legislators can take to put the state budget on sounder fiscal footing without job-killing tax hikes:

1. Reduce Governor Quinn’s $30.6 billion General Revenue Fund budget proposal for 2010 by just 10 percent  (worth $3 billion).
2. Roll back the 2010 spending increases Governor Quinn scheduled for certain departments over their 2009 allocations (worth $980 million). Pare back the budgets of the remaining “Governor’s Agencies” (a 15 percent cut is worth $963 million).
3. Reduce budgets for legislative, judicial, and elections agencies (a 10 percent cut is worth $80 million).
4. Stop the flow of general revenues into certain special state funds (worth upwards of $647 million). Stop the flow of state income tax receipts to localities (worth $1.2 billion).
5.  Reduce government payroll costs (a 10 percent reduction is worth $508 million). Require greater health care and pension contributions for public employees and retirees.
6. Pass the Illinois Efficient Government Act to help “right-size” state government by fostering competition, efficiency, and innovation in service delivery to Illinois taxpayers.
7. Adopt the savings suggestions of the Taxpayer Action Board, which focused on the areas of government operations, public safety, education, pensions, Medicaid, human services, and public employee and retiree health care.
8. Begin Medicaid delivery reform by implementing a mandatory managed care system, rebalancing long-term care away from institutions toward lower-cost community care, and requesting a waiver from federal mandates in order to give Illinois a greater degree of flexibility.
9. Prevent future deficits and ensure that the government does not grow beyond taxpayers’ ability to pay for it by passing an expenditure limit tied to population growth and inflation. If this had been passed in 2004, the state could have saved $13.7 billion over the past six years.
10. Pass the Illinois Policy Institute’s Economic Reform Agenda, which consists of four common-sense proposals (PAYGO, 3/5 supermajority requirement for tax increases, Sunshine Act, and Stimulus Watch Act) that address the root causes of Illinois’s fiscal and economic crisis.

Illinois leaders do not need to increase taxes to balance the state’s budget. Deciding to hike taxes on Illinoisans is a choice, not a necessity. Nor do state leaders need to impose “doomsday” budget cuts. Our alternative approach shows that the deficit can be resolved with a variety of sensible and reasonable spending reforms. For more information, visit our “Budget Solutions 2010” plan.