Dillard looking forward to Gov’s ‘State of the State’

State Sen. Kirk Dillard's Weekly E-Newsletter: Jan. 23 - 27: Dillard looking forward to Gov’s "State of the State," Tax Foundation: Illinois falls “dramatically” in national tax rankings

Dillard looking forward to Gov’s ‘State of the State’

Senator Kirk Dillard is looking forward to Gov. Pat Quinn’s annual “State of the State” address on Feb. 1, which he hopes will provide insight into the Governor’s priorities for the upcoming legislative session.

“New budget forecasts released by Gov. Quinn and Comptroller Topinka indicate the state’s finances remain our top priority during the spring session,” Dillard said, noting the Comptroller estimates Illinois’ bill backlog tops $8 billion.

But while the state’s budget woes remain a top priority for lawmakers, media reports indicate the Governor will likely turn his attention to other important—and contentious—issues like public pensions, taxes, and the Medicaid system.

Illinois’ obligations to its state workers and retirees, and to its taxpayer-financed health care programs, are gobbling up state revenues at an unsustainable rate. Those commitments are increasing each year, and without serious changes threaten to overwhelm available revenues. Senate Republicans are interested in learning more about Gov. Quinn’s plans to tackle Illinois’ Medicaid and pension system obligations.

Sen. Dillard said he hopes the Governor explains how he intends to meet his pledge to roll-back the 67 percent tax increase as scheduled, and what spending cuts the Governor will support in order to avoid the $800 million FY 2015 deficit that Quinn’s budget office is projecting. In order to address that deficit, the Senator is eager for more details about the Governor’s plan to hold education and health care spending level through Fiscal Year 2015.

Sen. Dillard stressed the Senate Republican Caucus is willing to work with Gov. Quinn and the state’s Democrat legislative leaders to right Illinois’ budget wrongs. Last March the Caucus introduced a “Reality Check” budget proposal that outlines difficult, yet achievable, ways to reduce state spending, return the state to solvency, and roll-back the 2011 tax hike.

Tax Foundation: Illinois falls “dramatically” in national tax rankings

The Tax Foundation’s 2012 State Business Tax Climate Index was recently released, revealing Illinois saw the biggest downward shift of any state. The nationally recognized and widely respected non-partisan organization reports that Illinois fell a whopping twelve places in the rankings, from 16th place in 2011 to 28th place in 2012.  

Though the state’s 67 percent income tax hike undoubtedly contributed to the drop, Illinois is a high-tax state in other areas. According to the Tax Foundation, the state ranks as the fifth worst in business taxes, the seventh worst in unemployment insurance taxes and the sixth worst in property taxes. Though some of Illinois’ neighboring states were ranked more poorly in these areas, when comparing rates in all tax categories to those of our neighbors, Illinois takes the cake.

“I’ve often said that we need to create a ‘destination economy’ in Illinois—an environment where employers want to do business,” Dillard said. “The Tax Foundation’s rankings underscore the importance of adopting a competitive tax structure. Illinois is home to an educated, desirable workforce, and many great resources. We can’t afford to let our unattractive tax policies undermine the state’s appeal to employers.”

The Tax Foundation highlighted the important role taxes play when it comes to a state’s ability to attract and retain employers. Echoing the concerns of Republican lawmakers, the report noted that, “States do not institute tax policy in a vacuum. Every change to a state’s tax system makes its business tax climate more or less competitive compared to other states, and makes the state more or less attractive to business.” The Tax Foundation emphasized that when higher taxes cut into profits the cost is passed on to consumers—through higher prices, employees—in lower wages and fewer jobs, or shareholders—in lower dividends or share value.

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