Word has just come that Illinois Governor Pat Quinn, House Speaker Mike Madigan, and Senate President John Cullerton have reached an agreement that would increase the state's income tax rate by 75 percent and the state's cigarette tax rate by 102 percent to help close a projected $15 billion budget deficit. The agreement will likely be voted on by the full General Assembly tomorrow unless concerned Illinois taxpayers like you speak out, which you can do by clicking here to find your legislators and their contact information.
If legislators adopt the agreement, Illinois will go from having one of the lowest flat personal income tax rates in the nation to the second highest. Additionally, Illinois' cigarette tax rate will go from 29th highest to 14th highest in the nation. The impact of these changes could be very serious. A study by the Illinois Policy Institute found that 217,000 jobs could be lost from just a 66% income tax hike. Moreover, Illinois would likely loose cigarette tax revenue as smokers flock to neighboring states like Missouri and Indiana, where cigarettes would be cheaper.
Quinn has been promoting an income tax hike for months. Since winning reelection in November by a very slim margin, Quinn has claimed that he has a mandate for a tax hike. But for all the talk of a mandate, it is strange to see the governor and tax hike proponents quickly trying to enact a tax hike during a lame duck session. Perhaps that is because a number of newcomers who campaigned against higher taxes and overspending will be sworn in at the start of the new General Assembly, which is next week.
If only Quinn and company would devote their efforts to curbing spending and reducing the tax burden. Illinoisans alreadypay thefourteenth-highest state and local tax burden per capita in the nation. It makes no sense to pile more onto such aheavy load, especially in a down economy. The answer to Illinois fiscalproblems is less spending, not more taxes. Unless Governor Quinn and the StateLegislature agree to significantly reduce state spending, residents are in foreven tougher times ahead.