Gov. Pat Quinn says there’s no doubt the state must tighten its financial belt again this year. His comments come after his office released a budget outlook that shows most state operations should expect a 9 percent reduction. Quinn says it’s in order to trim the fat and help the state pay pension and Medicaid costs which have been on the rise.
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“We’ve got to make a serious investment and maintain our investment as best we can in our schools and same way with health care,” Quinn said. “We have to have decent health care for everyone and we work hard at that, but having said that, there are other parts of state government that do have to economize.”
The projections also show the state in financial trouble when a temporary income tax increase expires in 2014. Quinn says it’s too soon to talk about that scenario and he’s is dealing with the budget one year at a time.
Meanwhile, Quinn says a change in the tax structure could help down the road. He says he’s open to looking at the effects of switching from a flat income tax rate to a progressive tax rate. “That’s something that I hope we look at,” Quinn said. “I think it’s very important for fairness and also for economic growth.” Quinn says that 70 percent of the economy is based on consumer demand, and the more money you let a worker keep, the more money they have to spend. A Democratic state senator last week suggested lawmakers hold hearings on the tax structure. Instituting a progressive tax would require a constitutional amendment.