Nice Op Ed from David Lloyd at Voices for Illiniois Children in today’s State Journal Register .



Illinois can choose revenue over cuts

May. 5, 2015 at 10:05 PM

The way Gov. Bruce Rauner tells it, Illinois has no choice but to cut services for families and
communities by billions of dollars.

Cutting services for children with autism next year? No choice, says the governor. Funding
for Alzheimer’s disease centers? Not essential, he claims. Denying 50,000 seniors and
people with disabilities cost-effective in-home services, forcing many into expensive nursing
homes? More efficient, his budget remarkably declares.

But Rauner and legislators are not helpless bystanders. Legislators chose to allow — and
candidate Rauner campaigned in support of — the expiration of previous income tax rates.
Because of the 25-percent tax cut that took effect in January, revenue is collapsing, with $5
billion to $6 billion less to fund services next budget year.

Just as allowing prior income tax rates to expire was a choice, so is deciding not to develop
revenue to replace it. And while the decision to cut rather than to develop revenue may
appear neutral on a spreadsheet, it’s not neutral in real life. Cuts have consequences.

The people who will most bear the consequences of Rauner’s proposed cuts are those who
can least afford to. Children, college students, seniors, the poor, people with disabilities,
people with mental illness — all would be hard hit. Meanwhile, the top 1 percent of taxpayers
in Illinois (average income: $1.9 million) will pay on about $18,000 less in state income tax in
2015 on average, according to the Institute on Taxation and Economic Policy.

The cuts would be felt everywhere in Illinois. Under Rauner’s budget, every municipality would
receive 50 percent less in state revenue sharing. Given that public safety costs make up a
large percentage of local budgets, his plan would mean fewer police and fire personnel serving
our communities.

Now is the time to be serious and think long term about our choices. We should choose to help
children with developmental delays catch up so they don’t need more expensive special
education later. We should choose to not make it harder for college students with large tuition
increases because of the proposed 30-percent cut to state universities.

The good news is that Rauner and legislators have many choices when it comes to avoiding
cuts by choosing revenue, as detailed in a report the Fiscal Policy Center at Voices for Illinois
Children released this week. For example:

* Illinois could follow the lead of neighboring states by modernizing its tax code to conform to an
economy that is more service-oriented than decades past. By expanding our sales tax to include
more services, which tend to be purchased more by high-income individuals, Illinois could raise
more than $1 billion annually.

* Illinois could end its status as the only Midwestern state to not tax any retirement income.
Even after exempting from taxation Social Security and the first $50,000 of other retirement
income for seniors, Illinois could raise more than $600 million.

* Illinois could close unjustifiable corporate loopholes that cost hundreds of millions of dollars,
tax e-cigarettes like normal cigarettes, and treat downloaded e-books like books bought in a

* Illinois could restore at least a portion of the individual income tax rate. For every quarter-
percentage-point increase, the state raises about $1 billion.

The governor and lawmakers must recognize they do have a choice. Illinois could choose
deep cuts that will create inefficiency and harm families and communities for years to come.
Or they can choose to develop new revenue and move this state toward a prosperous future.

— David Lloyd is director of the Fiscal Policy Center at Voices for Illinois Children, a Chicago-
based statewide, nonpartisan organization committed to building better lives for children.

Tony Paulauski
Executive Director
The Arc of Illinois
20901 S. LaGrange Rd. Suite 209
Frankfort, IL 60423
815-464-1832 (OFFICE)
815-464-1832 (CELL)