by  Ben VanMetre,  Illinois Policy Institute

Two years ago, families in Illinois started forking over an additional $1,500 as the result of a 67% personal income tax hike — pushing their state tax bill to $3,750.

Lawmakers said the tax hike was necessary to prevent cuts to core government services. They promised the new revenue would be used to pay down unpaid bills and restore Illinois’ finances.

At the time, taxpayers didn’t feel the pain because the state tax hike coincided with a 2% federal payroll tax cut.

Fast-forward two years.

Illinois raked in $6.4 billion in new money in 2012 as a result of the tax hike — but ended the year with $9.4 billion in unpaid bills.

The 2% federal payroll tax cut has been rolled back. And Illinois families are finally feeling the pain of the 2011 Quinncome tax.

So where did your money go?

Eighty cents of every tax-hike dollar went to pay government worker pensions in 2012. And because lawmakers failed to address the pension crisis, more than one-third of your annual tax bill now goes to pensions.

According to budget projections released by Gov. Quinn, during the next three fiscal years, Illinois will spend more on government employee pensions, while spending less on education, public safety, health care and human services.

The tax hike was nothing more than another broken promise. And lawmakers are considering making the “temporary” tax hike permanent. Or worse – pushing through another multibillion-dollar progressive tax hike.

Their reasoning: a permanent or graduated income tax hike is necessary to prevent cuts to core government services and pay down the backlog of unpaid bills.

Talk about deja vu.

Milton Friedman nailed it when he said, “Governments never learn. Only people learn.” 

We can’t allow a repeat of the last two years. Taxpayers must refuse to carry the burden of failed leadership.

Together, we must get government out of the pension business and give workers control of their retirement by shifting to defined contribution plans. We must also demand a repeal of the Quinncome tax.

Enough is enough. Let’s end the spending addiction in Springfield.

Ben VanMetre
Senior Budget and Tax Policy Analyst

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