As lawmakers and stakeholders await Gov. Bruce Rauner’s budget proposal next week, the Institute for Illinois' Fiscal Sustainability at the Civic Federation has released a five-year roadmap that it says will stabilize state finances and protect government services.
.......While the group’s plan calls for a rate hike, it wants to see the income tax drop on Jan. 1, 2018 to 4 percent for individuals and 5.6 percent for corporations. Ralph Martire, executive director of the Center for Tax and Budget Accountability, says while income tax rates do need to be adjusted, it’s not sound policy to temporarily increase the rates and call for a rollback in three years.
“You’re implementing artificial changes in policy that aren’t based on anything economically driven – rather, they’re politically driven,” Martire said. “The problem with our revenue system isn’t temporary, it’s structural.”
Martire says a more sound approach is to adjust the rates to account for the gap between the revenue Illinois takes in and what it spends on services, like education and health care.