Budget Reaction: Is Illinois Putting Best Foot Forward?
7/2/2014 5:39:47 AM
Illinois' 2015 state budget went into effect Tuesday without maintaining the now-temporary income tax rate, which will result in a $2 billion revenue loss.
David Lloyd, director of the Fiscal Policy Center at Voices for Illinois Children, said lawmakers tried to solve the problem by shortchanging existing obligations and borrowing funds that must eventually be paid back. He cautioned that the situation will only worsen if the General Assembly does not extend the current tax rate when lawmakers return after the election.
"A year from now, we'll be talking about a $5 billion revenue collapse and the dam will truly break," he said. "They won't be able to do these half, short-sighted measures to kind of paper over big losses in one year and make it seem like everything is all right."
The income tax increase expires in January 2015. Gov. Pat Quinn signed the budget, but is among those criticizing it for being "incomplete."
Funding for K-through-12 education remained stable in the budget, but Lloyd said it is more than $2,500 less per student than recommended levels. He added that adequate investments are needed in education and other programs crucial to job growth and prosperity.
"We need to do so much more to make sure that we have a high-quality workforce in the future, and that we're preparing kids for the jobs of the 21st century," he said. "And right now, we're really failing to do that, by really not making the investments necessary in kids."
Lloyd also warned that the economy faces severe consequences if the state does not maintain sufficient revenue.
"It really creates uncertainty for everyone," he said. "It creates uncertainty for businesses, for workers, for consumers, for investors. It's really hard to make decisions when Illinois suffers from this cloud of uncertainty regarding its finances. We're not putting our best foot forward."
Over the past couple of years, the state's backlog of unpaid bills was cut in half - down to about $4 billion. Lloyd said this budget stops that progress in its tracks and also could worsen the state's credit rating, which already is the worst in the nation.