A bipartisan compromise signed into law by Governor Bruce Rauner during the week means local governments will receive funding to help them salt icy roads this winter, local 9-1-1 centers can continue to provide vital services, and the state’s portion of the Low-Income Home Energy Assistance Program (LIHEAP) will be funded.
Also during the week, legislative leaders met with Governor Rauner to discuss the state’s ongoing budget stalemate. While no compromise emerged from the meeting, the leaders and the Governor have agreed to meet again next week to continue negotiations.
Just a day after engaging in budget talks with the Governor and fellow legislative leaders, House Speaker Michael Madigan called for increasing Illinois’ individual income tax rate to five percent – a 33 percent increase.
Meanwhile, Illinois’ ranking has improved slightly in 24/7 Wall Street’s annual list of best-run and worst-run states.
Legislation to fund 9-1-1 centers, local governments signed into law
Road crews will be able to salt icy roads this winter, local 9-1-1 centers will continue to operate, and firefighters will receive vital training as a result of legislation unanimously passed by the Senate December 7 and signed into law by Governor Rauner later in the day.
Senate Bill 2039, the result of bipartisan negotiations between the Governor and lawmakers, will also ensure funding for the state’s portion of LIHEAP, lottery winners, HIV/Aids prevention, the Special Olympics, and other important state programs.
Most of the funding in the new law are federal dollars or special state funds designated for specific programs such as motor fuel tax distributions to local governments. A small portion of the funding comes from Illinois’ General Revenue Fund (GRF) and will go to the Secretary of State to cover electric bills and maintenance costs at state facilities, as well as to shelters that serve victims of domestic violence.
Leaders meet in Chicago
Legislative leaders and Governor Rauner met again December 8 to discuss the state’s ongoing budget impasse. The meeting, held in Chicago, was not as high-profile as last week’s gathering of the leaders in Springfield, which included a public portion open to media.
While no major breakthroughs were made this week, leaders have agreed to meet again next week to continue working toward a solution to Illinois’ fiscal woes.
Madigan says 33% income tax hike is a ‘good place to begin’
Addressing the City Club of Chicago on December 9, Speaker Madigan said increasing Illinois’ income tax rates to those in place after the 2010 temporary income tax hike is “a good place to begin.” I disagree! I think Illinois should focus on reforming how the state does business, boosting Illinois’ economy, and protecting taxpayers.
In December 2010, Democrats lawmakers approved a 67% income tax hike that increased Illinois taxpayers’ individual income tax rates to five percent, and corporate tax rates to seven percent. In January 2015, the temporary tax rate was allowed to expire, reducing individual income tax rates to 3.75 percent and corporate rates to 5.25 percent. Madigan says we should increase income tax rates once again, but has resisted implementing much-needed structural reforms.
Throughout the budget impasse, my Republican legislative colleagues and I have maintained that Illinois needs fundamental reforms to improve the state’s economic climate, create jobs, and grow the middle-class. Any solution must treat the problem, not just the symptoms.
Report: Illinois now second worst-run state in the nation
Financial news corporation 24/7 Wall Street released its annual list of best-run and worst-run states. Last year, Illinois was named the worst-run state in America, but this year, the state has pulled ahead of New Mexico, placing the state at 49th in the annual ranking.
Illinois continues to face major challenges. According to 24/7 Wall Street, Illinois’ low ranking is largely due to long-term issues with fiscal mismanagement.
“Illinois has one of the smallest rainy day funds compared to other states, at 1 percent of its general annual budget — an indication the state may not be able to satisfy its short-term obligations,” 24/7 Wall Street noted.
The study noted that Illinois’ major debt is equal to more than three-fourths of its annual revenue. In addition, the state’s pension fund only has assets on hand to meet 39 percent of its pension obligations, the lowest ratio of any state.
As Illinois’ budget stalemate continues, implementing fundamental reforms to address issues like the state’s budget, debt, and pension crisis are top priorities of Republican legislators.