Why did the Illinois General Assembly just pass a historic tax increase on individuals and corporations? Given our failures to address the state’s growing structural deficit for the past ten years, if not longer, it had no other choice.
The critical question now is: “Where do we go from here?”
The answer is complex. It depends, first, on what we think about the revenue increase itself. Surely it is a step forward. We have been living with a “structural deficit” in Illinois for years. Now we have gone a long way toward eliminating it.
We are all in the debt of the legislators who voted for the bill, some of whom may pay a high political price. But in their desperation to ward off fiscal disaster (I believe Governor Quinn when he tells us that we were on the verge of “junk bond” status), the General Assembly lost all sight of tax fairness.
The revenue bill could have provided earned income tax credits for working, low and moderate income families. It could have offered property tax relief for those at the lower end of the income ladder. It could have set aside funding for education, especially in the already underfunded inner city and rural school districts.
Why weren’t any of these things included? We are told that the legislative leaders were worried that “this would be too complicated.” The real reason is probably that tax fairness does not matter very much to most voters.
The second thing about this tax increase is that it puts those of us who supported it in a position that we are unaccustomed to. PCG’s usual role is to support services. But now we must also pay attention to saving money through cuts. Senate President John Cullerton estimates that it will be necessary to find at least $300 million in cuts to comply with the cap. The figure may be much higher.
If we care about tax fairness and the common good, we must be willing look at what economists call “opportunity costs.” We should remind ourselves that every dollar we spend where cuts could be made is a dollar not available to the mentally ill, the developmentally disabled, the aged, those seeking but unable to find work, and children.
Humane programs can often be “win-win”: they can help people at less cost. Expanding home health care is less expensive than nursing home care. Drug treatment programs are far less costly than putting low-level possession offenders in prison, most of whom, once in the system, will recycle through it.
Other areas are more difficult, but we should be open to them. The General Assembly took some steps last spring to reduce pension costs for new state hires. There are additional alternatives: requiring higher-income public employees to bear some of their retirement and health care costs, for example.
If we are unwilling to examine these, and other hard choices, we will once again be starting down the path toward fiscal collapse that we have just managed to narrowly avoid. Nor will we be able to gain support for new programs essential to the common good.