A local state representative will make an effort to carry a state budget plan developed by a conservative free-market group.
Rep. Allen Skillicorn, R-East Dundee, will join Rep. Jeanne Ives, R-Wheaton, in filing a House bill to carry the budget plan floated by the Illinois Policy Institute. The institute unveiled the plan Tuesday, which they say would balance the state budget and right its finances through cuts and reforms with no need for a tax increase.
The plan has little chance of traction in a House and Senate with solid Democratic majorities. When it reconvenes next week, the Senate is expected to begin voting on a budget plan that includes significant tax increases.
“Constituents contact me every day to tell me that Illinois taxes are too high, and I agree,” Skillicorn said. “Illinois residents do not receive a good return on their investment. Property taxes are driving seniors, small businesses and working-class families out of state. We need bold leadership and transformative policies.”
Illinois has been without a budget since July 2015, minus a six-month stopgap budget that expired Jan. 1 of this year. An impasse exists between the Democratic leaders of the General Assembly and Republican Gov. Bruce Rauner, who will not agree to raise taxes or revenue without accompanying business-friendly and good-government reforms.
Almost half of the $7.1 billion in savings would come from a five-year property tax freeze that would include an end to revenue-sharing agreements with local governments that the institute alleges help fuel “excessive local spending” and end-of-career salary hikes to sweeten pensions.
Another $2 billion to $3 billion in savings would be realized through reforms such as allowing local governments to set their own collective bargaining rules, changing workers’ compensation laws, reforming unfunded state mandates and reforming prevailing wage laws.
The proposal also creates a self-managed, 401(k)-style retirement plan for new hires – and allows existing employees to enroll as well – freeing up another $1.65 billion and setting the state on a path to addressing its $130 billion unfunded pension liability.
More than 20 percent of Illinois’ general fund budget now goes to paying for pensions for people enrolled in the five state-run systems for state employees, teachers, university professors, General Assembly lawmakers and judges.
The Senate plan, hashed out by Democratic and Republican leaders, raises the individual tax rate from 3.75 percent to 5 percent, and the corporate tax rate from 5.25 percent to 7 percent, which doesn’t count the 2.5 percent replacement tax they also pay.
It also creates a payroll tax – which the sponsor calls an “opportunity tax” – which charges businesses based on how many employees they have. The Senate plan also slaps the sales tax on a number of services as well as imposes a tax on entertainment.
In exchange, the Senate plan imposes a two-year property tax freeze, offers some reforms to the pension systems and workers’ compensation laws, and makes it easier to consolidate some of the state’s 7,000 units of local government.
One factor that could aggravate the ongoing budget standoff is a motion filed by Attorney General Lisa Madigan to end a court order that has allowed state workers to be paid without a budget in place.
Rauner will deliver his proposed budget Feb. 15 for fiscal 2018, which begins July 1.
Illinois currently has the worst credit rating of all 50 states, and for the past several years has been at or near the top of the list of states losing population.