Op-Ed: Illinois Debt as a Rallying Cry for Reducing State Spending, Not Raising Taxes

Last Friday, Spend Matters shared some initial thoughts on the current proposal making its way through the Illinois state legislator that would potentially raise personal income taxes by 75%. Speaking further on the subject, Jason and Lisa recently published an op-ed in Surplus Record, positing that rather than raising taxes, Illinois needs to take a deep look into slashing state spending. Click here to check out the article, and see excerpts below.

They say, "For those outside of Illinois, the proposed tax increase should serve as a model and lesson for how professional state politicians are often more out of touch with industrial reality." Further, "The tax hit is a double-whammy for businesses. Illinois manufacturers, which are facing greater costs and uncertainty than ever thanks to rising healthcare costs and mandates, are also finding themselves more challenged than ever when it comes to finding access to working capital to fund inventory and other costs as orders increase. Taxing what's left of profits (if any) as well as increasing the personal income tax of owners and managers – not to mention workers – is as good a recipe as any to encourage businesses to close up shop or cross state lines."

They then delve into Illinois' murky world of government spending, saying "In 2009, Illinois' total state and local government expenditures totaled $123 billion dollars, a number that rose $10 billion (significantly outpacing inflation) in 2010. While much of this money goes to infrastructure and other important spending, a significant portion raises more eyebrows than anything else. Consider that Illinois spends $428 million per year to keep elderly prisoners behind bars, including paying for nursing care. Or what about the $2M grant in 2010 from the Illinois Department of Commerce to an organization that decided it would be in the State's best interest to ship Asian Carp back to China (we're not making this up)."

Take a few minutes to read through the rest of the article, as it goes on to discuss state workers on a total cost basis and if "state politicians and Governor Quinn want to create an environment where manufacturers don't feel like they're having the shirt stolen off of their back – what's left of the tattered rag -- they should reduce and reform state pensions, rid the state of ridiculous union work rules and lay off 15% of the bloated public sector workforce before considering a tax hike." It seems that prioritization needs some serious reconsideration in Illinois.

- Sheena Moore

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