Progress Illinois

We've been following the momentum that's building around HB 174, which appears to be the most politically-viable and progressive plan for fixing Illinois flawed tax structure.  As proposed by State Sen. James Meeks in the spring, the plan raises the income tax rate and extends the sales tax to certain services while providing low-income tax credits and property tax relief. Senate President John Cullerton ushered the bill through his chamber at the end of the session in May, but it never came up for a full vote in the House. Some other high-profile officials -- Illinois Board of Education chair Jesse Ruiz, for example -- have already expressed public support for the measure. And the Responsible Budget Coalition -- a newly-formed assemblage of grassroots organizations, labor unions, and social service providers -- is planning to push the plan as a solution to the state's perennial budget woes. But where does Pat Quinn stand?

This morning, we caught up with the governor at a press conference announcing Rep. Mike Quigley's endorsement of his primary campaign. On the subject of HB 174, Quinn told us he's "optimistic" about the prospect of "generating more revenue" this fiscal year and said he plans to work with supporters of the bill. Watch it:

QUINN: We need to get revenue to pay the bills . There will be another effort.  I think, particularly the bill you mentioned will probably be refined a bit.  So we'll work together on it.  I'm optimistic that in this fiscal year we'll get more revenue in order to make sure Illinois is a solvent state and that we also invest in education, health care, public safety, helping our veterans.  We have to do that.  That's what Illinois is all about.

Judging by the first quarterly report (PDF) released by the non-partisan Commission on Government Forecasting and Accountability (CGFA) last week, it's absolutely crucial that we close the state budget deficit -- and soon.

Since July, personal income taxes fell 18 percent, corporate income taxes dropped 29 percent, and sales taxes revenues shrunk by 15 percent. In cash-flow terms, the state bank account has $340 million less on hand than at the same time last year, even after factoring in a $289 million-infusion of federal funds.  "[T]he magnitude of the falloffs are somewhat unsettling," the CGFA reports, "and serve as a reminder that despite being in a recovery phase, revenues should not be expected to abruptly improve." Elsewhere in the country, state tax revenues fell by 17 percent last quarter on average.

But compounding the problem here in Illinois is the stop-gap budget approved by the General Assembly earlier this year, which deferred $3.2 billion worth of bills and borrowed another $3.5 billion against future revenues.  Those liabilities must be addressed as well.

CGFA Revenue Manager Jim Muschinske told Rich Miller last week that an economic recovery would “mitigate” some of the first quarter revenue losses. “We just hope it doesn’t get worse,” he added.

Next week, the Responsible Budget Coalition will be in Springfield to lobby for the Meeks plan during veto session.  In the meantime, you can check out the entire CGFA report here (PDF).