Illinois fiscal cliff looms
A new issue brief from the nonprofit, nonpartisan Center for Tax and Budget Accountability lays out the hard facts: With current state income tax rates set to fall from 5 percent to 3.75 percent on January 1, the incoming governor and state legislators will have $3.64 billion less to spend in the coming fiscal year -- unless they act to replace the lost revenue.
AFSCME and our allies have long advocated for extending current rates or for other revenue measures such as a graduated income tax, the millionaires surcharge, closing corporate loopholes and applying the sales tax to services. Governor Quinn last spring recommended adoption of a budget based on making the current income tax rates permanent, but the General Assembly declined to do so.
The CTBA report simply lays out the dire consequences for the state's balance sheet if elected officials fail once again to raise adequate revenue. And while those numbers are frightening -- a one-year shortfall of $3.64 billion, an accumulated deficit of unpaid bills ballooning to $12.7 billion from the current $6.8 billion -- even more chilling is what CTBA doesn't say: That closing such a shortfall with cuts to budgets, public services and jobs would be devastating.
After all, the state spends only about $36 billion from its general fund each year. The looming fiscal cliff is equal to 10% of that. State agencies already ravaged by more than a decade of bleak budgets and a workforce spread thin by years of cuts and attrition simply cannot sustain cuts of that magnitude.
Read the full report below.