A month ago we wrote about the hope of positive tax reform developments in Illinois in the midst of continuous budgetary chaos. Unfortunately, no such end is in sight.
Here’s an update:
While the campaign to adopt a graduated income tax made significant progress, lawmakers failed to call the bill to amend the constitution before the deadline due to lost support needed to satisfy the three-fifths supermajority requirement. Certainly not aiding the effort was a flawed impact analysis released last-minute by the Illinois Department of Revenue, which failed to account for the positive effect new tax revenues have on public investments. (Read ITEP’s critique of the study.) The earliest Illinois can reconsider this effort is in another two years.
Further, the legislative session just ended May 31st and no appropriations bills were passed, meaning the state is going into its second year without a budget. Any budget agreement that could be reached now has to meet a supermajority hurdle, making passage all the more difficult.
End-of-session reports read like an ancient Greek comedy, complete with ongoing debate among the primary actors, outlandish costuming, and increasingly fantastical plot elements as this unprecedented standoff drags out. The House, Senate, and governor have each presented their own budget proposals, none of which (to date) has received the necessary support from the others. The back and forth among the principal actors is scheduled to continue into June and may not see an end until after the elections in November. It’s difficult to envision a compromise on the horizon amid all the political costuming.
In the meantime, the state continues to face a growing backlog of unpaid bills, needing to rely on emergency procurements to keep basic operations open. Public universities prepare for further budget cuts, human service providers face difficult decisions, and public schools may not open on time or at all this fall. As the Sun-Times Editorial Board writes, absurdity reigns, leading to outcomes that are increasingly damaging to Illinois residents now and for years to come.
Illinois could move past these comedic storylines and tragic outcomes by reaching agreement on revenue solutions. While adopting a graduated personal income tax is a critical piece of real reform, there are many other options lawmakers can consider right now to end the madness and move toward fiscal stability.