U Of I Report: Tax Hike Won’t Fix State Deficit

SPRINGFIELD, Ill. (WBBM) — A new report from the University of Illinois on Wednesday said that the income tax hike recently approved by Gov. Pat Quinn and the General Assembly is not enough of a solution to the state’s $15 billion deficit.

As part of the Fiscal Futures Project from the university’s Institute of Government and Public Affairs, the report said that the increases – two percentage points for individuals and 2.2 percentage points for corporations – will not fully solve the deficit problems.

LISTEN: Newsradio 780’s Dave Dahl reports

“We estimate that the structural deficit, the difference between what we spend and what we raise in continuing revenues, is $11 billion in fiscal year 2011, and this tax increase raises only less than $4 billion in 2011,” says IGPA associate director David Merriman. “In the following year it raises more than that, over $7 billion, but it’s still not enough to close the deficit.”

Merriman says the state’s modus operandi appears to be to slap something together at the last minute, as opposed to having a comprehensive plan. Merriman says some ideas which have not gotten a thorough hearing here, but which are in use in other states, include taxing retirement income and broadening the sales tax base.

Read the full report here.


    Maybe they need to increase the personal rate another 2% to 7% and the business rate from 4.8% to 9.0% Which equates to 11.5 for the business. Quick pass it behind closed doors. I think this is good for the children!

  • Jim

    Wow that’s a shocker. Maybe they should tax state pensions at 10%? We would have a HUGE surplus with all the money that we pay to these politicians!

  • Gee-reg

    Why not stop some if not not all the free government give aways like giving away free cell phones with 200 free minutes per month to a certain minority in the state paid for with tax money taken from workers who can not afford their own cell phones !!!!!

  • Tim Lee

    Here’s a unique idea – stop spending what we don’t have. We will never get out of this debt, unless the reckless spending stops.

  • Suprise!!!!

    NO $HIT!!!! But Quinn and his theives know best, right???

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