Words no Illinois lawmaker will say

By Times Staff | Monday, February 11, 2008

The reelection of our Illinois Quad-City incumbent legislators puts the same players back into the same Illinois legislative quagmire that has turned hundred-million-dollar annual deficits into billion dollar deficits.

Nothing has changed. House Speaker Michael Madigan is at war with Gov. Rod Blagojevich and Senate Majority Leader Emil Jones. Blagojevich is a perennial no-show, foisting scheme after scheme that neither the legislature or the public is

buying.

“This is our state’s darkest fiscal hour,” the governor said in his 2004 State of the State address. That’s when Blagojevich was looking at a $400 million deficit. He seemed oblivious to how much darker it could get.

State Treasurer Alexi Giannoulias this week said a flagging stock market will drop Illinois’ investment earnings by $240 million. A new report from the Illinois Commission on Government Forecasting and Accountability warned the lagging economy may cause state tax revenues to drop another $600 million.

The Illinois Center for Tax and Budget Accountability pegs the overall shortfall at $3 billion. Much of that is in 2007 Medicaid bills that the legislature and governor deferred to 2008, but without the revenue to pay

for it.

It’s a hole so deep, budget cuts alone cannot fill it. Casino expansion or one-time tricks like selling the lottery or the tollway system can’t cover it.

Something has to give. Someone has to say

“tax hike.”

No incumbent of either party will say it, so we will. In Illinois, lawmakers have to look at increasing the state’s lowest-in-the-Midwest income tax and some comparatively low fees.

They could start with a vehicle registration fee, still the lowest in the midwest. State Rep. Kevin McCarthy, D-Orland Park, has proposed raising the registration from $78 to $96 in 2009. That leaves it far below Iowa, which charges based on the size and value of the vehicle. That alone would generate $162 million for Illinois. Aggressive marketing of higher-priced novelty and special cause plates also would generate more revenue.

But lawmakers in a billion-dollar deficit state can’t ignore Illinois’ three-percent income tax rate. That rate is ranked 12th lowest overall by the Tax Foundation, a non-partisan, Washington-based non-profit research firm.

While no state lawmaker will whisper “income tax hike,” their collective silence on the billion-dollar deficit screams “property tax hike.” Every time the legislature defers action on out-of-control public pensions or cuts services further, some of the differences are made up by local property taxes. Illinois property tax rates are among the top 10 highest nationally, according to the Tax Foundation, and have no room to grow. In fact, a case could be made to use a portion of a nominal income tax increase to drop property taxes, which are crippling to homeowners and

businesses.

We have no enthusiasm for a tax increase of any kind. We have less enthusiasm for billion-dollar deficits. Illinois’ flailing state leadership keeps piling on unsustainable deficits and waiting for an economic miracle or a quick-fix scheme to buy more time.

But time isn’t solving this problem. It’s making it worse.

Leadership can solve it.

Who in Springfield will utter those unwelcome words?