By David Stanczak
An old saying holds that there are two things you don’t want to watch being made: laws and sausages. Many years ago, after my first opportunity to view the legislative process in action, I vowed I would never visit a sausage-making establishment. And that was back in the good old days, when Illinois had annual budgets that at least sort of balanced, before the elf king of the state had ascended his throne, and when there were two parties running the state.
What was true then is even more true now. After endless talk of a “grand bargain” which never came to pass, the General Assembly is passing a budget that, in the absence of additional taxes, will have a $5 billion hole in it. To fill this hole, there will be an increase in the income tax (it’s only 4.9 percent and we’re supposed to feel relieved that they didn’t jack it up all the way to five percent), an increase in the sales tax, an expansion of that tax to other commodities, and a services tax similar to the sales tax, covering a host of occupations and professions.
Republican legislators expressed skepticism over whether the tax increase would cover the entire $5 billion shortfall, which if true, would be the least of the problems with the increase.
We’ve seen this movie before and we know how it ends. In 2011, the temporary increase in the income tax from 3.5% to 5% to pay the state’s accumulated bills generated such an exodus of taxpayers (along with the corresponding tax base) that there was a net outflow of Illinois residents to every other jurisdiction in the country (and the state never did catch up on its bills).
Governor Rauner had been holding off on approval of any tax increase until there was agreement on reforms to make Illinois more business-friendly and hopefully offset the stifling impact of the higher taxes by bringing more businesses into the state. No word on the reforms.
A lot of people, knowing the straits the state is in were willing to kick in more money so long as it wasn’t just throwing more money down the same rathole. But without the reforms, it seems not only is the additional money going down the same rathole, the rathole is being enlarged.
The Governor has his veto pen, and the Constitution gives him a line item veto, so the budget and tax increase sans reforms are not done deals, but we may be headed for a repeat of 2011. I hate reruns, especially when I don’t like the ending.
David Stanczak, a Forum commentator since 1995, came to Bloomington in 1971. He served as the City of Bloomington’s first full-time legal counsel for over 18 years, before entering private practice. He is currently employed by the Snyder Companies and continues to reside in Bloomington with his family.
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