Tax Revenues Aren’t Illinois’ Problem—Spending Is
Tax-hike proponents claim there’s no way to fix Illinois’ chronic budget problems without more money. They want Illinoisans to believe that the state’s tax revenues simply aren’t enough to cover the cost of government. But tax revenues aren’t the real problem. Illinois’ perennial budget crises stem from the state’s persistent overspending and its misplaced spending priorities. The 2016 budget gridlock is the culmination of years of fiscal mismanagement under House Speaker Mike Madigan’s leadership. A look at the state’s budget numbers since Madigan came to power as House speaker shows the state has had ample tax revenues – now and over the past 30 years – but has consistently mismanaged its spending. Illinois has repeatedly prioritized government-worker pay and benefits over core services. That’s led to Illinois’ dramatic fiscal decline and the current budget crisis.
Without significant reforms in the way state government operates, primary spending drivers such as state-worker compensation will continue to crowd out funding for other services. But tax hikes aren’t the solution. Any tax increases will only put additional pressure on overburdened taxpayers and encourage more residents to seek opportunities in other states. Illinois already has the fourth-highest state and local tax burden as a percentage of income, and that includes the highest property taxes in the nation. The reality is, unless Illinois reforms its core cost drivers and reinvigorates its economy, the state’s finances – and its tax base – will continue to deteriorate.