Editorial: Disappointing Illinois budget needs new ideas

Staff Writer
Mount Shasta Herald

Illinois residents pay the lowest income tax rate among states that levy income taxes, but Gov. Pat Quinn would change that if his budget proposal goes through.

Which is disappointing, because we expected more of Quinn.

There’s nothing innovative in Quinn’s proposal. He falls back on ideas that have been floated and failed. Some have merit, such as a two-tiered pension system. Others are irresponsible, such as underfunding pension payments by $2.9 billion and taking money from dedicated funds. Others may cause more harm, such as increasing the corporate income tax rate.

“In tough times, everyone, everyone must live within their means. And that goes for government, too,” Quinn said during his budget address Wednesday.

Our understanding of living within their means would mean the state would live with what it has now, cut to balance the budget and resist the temptation to increase taxes and/or fees.

The proposed increase in the corporate income tax would make Illinois’ business climate even more unfriendly.

Illinois’ corporate tax rate is 4.8 percent, but when you add the corporate property replacement tax, which nearby states do not have, the effective rate is 7.3 percent. Quinn’s proposal would put the effective rate at 9.7 percent.

The Tax Foundation, a nonpartisan organization that’s been around since 1937, ranks Illinois 23rd in its State Business Tax Climate Index. The index is compiled by comparing corporate taxes, individual income taxes, sales taxes, unemployment insurance taxes and taxes on property, including residential and commercial property.

Illinois is behind three neighboring states. Indiana is best at 14th, Missouri is 16th and Michigan is 20th. Illinois cannot afford a tax structure that would make it fall even further behind.

Individuals stressed out about whether they’ll still have a job tomorrow don’t need the added stress of an income tax increase.

Quinn has tried to soften the blow by raising the income tax exemption to $6,000 from the current $2,000.

While that would mean a family of four making $25,000 would see a dramatic reduction in state income tax, a single person making $20,000 would see a big increase.

There are other taxes and fees we could quibble with, but we hope to see a more palatable budget when negotiators in the House and Senate finish their work.

Calculate your taxes at budget.illinois.gov/taxcalculator.htm

Rockford Register Star