A bipartisan compromise that passed the Illinois Senate this week and was signed into law by Gov. Bruce Rauner means local governments will receive funding to help them salt icy roads this winter, local 9-1-1 centers will be able to continue to provide vital services, and the state’s portion of the Low-Income Home Energy Assistance Program (LIHEAP) will be funded.
Also this week, legislative leaders met with Gov. Rauner on Dec. 8 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.
On Dec. 9, 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, during a speech at the City Club of Chicago.
Meanwhile, Illinois’ ranking has improved, slightly, in 24/7 Wall Street’s annual list of best-and-worst-run states. Last year’s ranking named Illinois the worst-run state in the nation, but this year, Illinois pulled ahead of New Mexico, making it only the second worst-run state in the nation. Long-term issues such as fiscal mismanagement, something Republicans have been spearheading ways to address, contributed to Illinois’ low ranking on the list.
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 this week and signed into law by Gov. Rauner Dec. 7.
Senate Bill 2039, the result of bipartisan negotiations between the Governor and the Legislature, 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). These GRF dollars will provide money to the Secretary of State to cover electric bills and maintenance costs at state facilities, as well as providing funds to shelters that serve victims of domestic violence.
Leaders meet in Chicago
Legislative leaders and Gov. Rauner met again on Dec. 8 to discuss the state’s ongoing budget impasse. This week’s 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 Dec. 9, House 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.” State Senator Dave Syverson (R-Rockford), however, says 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, Republican lawmakers have maintained that Illinois needs fundamental reforms to improve the state’s economic climate, create jobs, and grow the middle-class, saying any solution must treat the problem, not just the symptoms.
Report: Illinois now second worst-run state in the nation
Illinois received some good news this week, albeit barely good news, when financial news corporation 24/7 Wall Street released its annual list of best-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.
Senator Syverson says this small improvement is no reason to celebrate, as 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.
Illinois’ major debt, which the study noted is more than three quarters of the state’s annual revenue, and ongoing pension crisis, were also cited as contributing factors to Illinois’ ranking as second-worst run state in the nation.
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.