The Illinois Policy Institute is proposing its solution to the state’s budget problems. The Institute, which lobbies for conservative fiscal causes, suggests ways for the state to cut the spending necessary to allow the income tax increase to expire. The individual tax rate rose from 3 percent to 5 percent at the start of 2011; at the end of this year it will go down to 3.75 percent, unless lawmakers act to extend it.
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The cuts necessary if the tax increase expires are $1.8 billion for Fiscal Year 2015, $3.1 billion for Fiscal Year 2016, and then $4.9 billion for each succeeding fiscal year. Budget cuts proposed by the IPI:
$870 million for education. They say the state should support local schools through the general state aid formula, but should not be sending money to school districts whose communities imposed property tax caps or who siphon money away from schools through tax increment financing in order to make up the difference.
$2 billion in Medicaid by reinstating a contractor that was purging ineligible Medicaid recipients from the rolls. However, the governor’s budget office notes that the bulk of those removed had moved out of state. That made them ineligible for Illinois Medicaid, but they were not, in fact, receiving benefits.
$800 million by requiring state retirees to pay for their own health insurance
$1.7 billion by cutting revenue sharing with local governments
An unspecified amount by means-testing cost-of-living adjustments for those receiving pensions, and from shifting the cost of teachers’ pensions and state universities’ employees’ pensions to their respective employers.
Vice president Kristina Rasmussen says some of these ideas are doable in Springfield. She also says that even though the group has received $500,000 in funding from Republican governor candidate Bruce Rauner over the last five years, all politicians are welcome to use the ideas.
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