Illinois political class must act to reverse the state’s fiscal slump. Here’s how. – Crain’s Chicago Business

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It’s a great idea, one that legions of Illinois politicians from former Comptroller Dawn Clark Netsch to Kaegi predecessor Jim Houlihan have pursued on and off for at least three decades. Swap higher state taxes, likely on income, for lowering the hated property tax.

But sadly, it is just as unlikely to be enacted now as it was then. Not because it’s a bad idea—it’s a great idea—but because most Illinois politicians then and now lack the guts to do what’s needed to be done. That’s to bring everybody to the table, elicit some needed fiscal pain from each of the stakeholders, and finally act decisively to end Illinois’ slide into an economic black hole.

Anyone who’s been around Springfield and a calculator for more than 10 minutes knows what needs to be done.   Real estate taxes, which are based on value rather than income and generally do not factor in ability to pay, need to be lowered. Other taxes, including on services and retirement income above a set level, need to be raised.  And as part of the deal, some reasonable limits need to be imposed on spending, like that wholly unreasonable circa-1975 pension deal in which in which retirees continue to get a minimum 3 percent annual cost-of-living increase at a time when inflation is running 1 percent or perhaps a bit more.

Democrats certainly are willing to raise taxes. And Republicans to cut spending. But if you don’t do the full monty at the same time, the deal falls apart and nothing happens. Which is why the swap never passed, because voters never were convinced that some taxes would go down if others went up.

There’s a word for that. Distrust. Voters don’t trust Springfield. Gov. J.B. Pritzker certainly knows that by now. Though he hasn’t admitted it out loud, lack of trust is why voters shot down his vaunted graduated income-tax amendment last November. And now he’s pushing his own version of the swap, demanding that business groups and Republicans come up with their own revenue or cost-cutting ideas or he’ll close $934 million in “corporate tax loopholes,” some of which he himself signed into law. But expecting a minority party to lead when you’re the leader and have a super-majority in your pocket is a bit much.

The cost of Illinois’ politicians refusal to butch it up and do what needs to be done becomes clearer by the day. For instance, in a March 3 report on the state’s lagging economic prospects, Moody’s Analytics said Illinois, on paper, has everything it needs to be a top job magnet. But unless fiscal pressures and soaring pension costs that now are somewhere past $144 billion in unfunded liabilities are solved, “the state will grow a step behind the Midwest average and a few steps behind the nation over the extended forecast horizon. . . .Over the next five years, employment in Illinois is forecast to increase 6.7 percent, below the 7.7 percent increase for the Midwest and 8.8 percent rise nationally.”

Sigh. Just do it already, wouldya? That means not being Bruce Rauner stubborn, or J.B. Pritzker aloof, or organized labor selfish, or hard-core Republican clueless but getting into the big room and solving the problem with some sort of comprehensive package, something like what the Civic Committee of the Commercial Club and Civic Federation proposed in recent years. This voter is sick and tired of the big stall. I don’t think I’m the only one.

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via “Illinois Politics” – Google News https://ift.tt/2DKMb2N

March 4, 2021 at 06:45PM

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