Guest Column: Sales tax holiday will be no holiday for taxpayers

July 28, 2010

By State Sen. Dave Syverson and State Sen. Brad Burzynski

Recently, two leading bond rating agencies lowered Illinois’ financial credit rating, underscoring an almost universal recognition that our state’s leadership has failed to deal with the current fiscal crisis.

In lowering its rating for Illinois, Fitch Ratings cited the “continuing unwillingness of the state of Illinois to take action to address its significant budgetary problems.” A week earlier, Moody’s Investors Service knocked the state for having a “chronic lack of political will” in addressing the fiscal shortfall in explaining its downgrade.

Part of the problem is a governor and legislative leaders who are unwilling to rein in spending and make the reforms necessary to bring the deficits under control. Also contributing to the problem are policies that decimate our already struggling state revenues.

Case in point: New legislation recently passed (S.B. 3658) creates a “sales tax holiday” on clothing and school supplies—a plan that sounds nice, but which is actually just election-year pandering that will end up costing taxpayers more over the long run.

In some ways, it’s similar to those “too good to be true” vacation deals that, when reading the fine print, you realize you are being taken to the cleaners. In reality, the sales tax holiday isn’t a holiday at all—consumers would still pay the 1.25 percent local/municipal portion of the sales tax, and the actual savings received would amount to $10 if you spent $200 on school supplies.

Altogether, this program is estimated to cost the state $40 to $60 million at a time Illinois faces a multi-billion-dollar deficit, and $6 billion in unpaid bills. If the governor truly wants to help area families and taxpayers, he would veto the bill and direct this relief to human service providers, many of whom have not been paid in months and are being forced to slash staffs and services for those most in need.

Additionally, Illinois is paying up to 12 percent to some vendors on the state’s $6 billion backlog of bills. By directing the tax holiday revenues toward paying our bills instead, we would not only save taxpayers more than $5 million in interest payments, but we would be getting crucial relief to our providers, who will, in turn, put that money back into our local communities. Now that’s a responsible way to help the taxpayers.

Sen. State Dave Syverson represents the 34th District, and State Sen. Brad Burzynski represents the 35th District. Both are Republicans.

From the July 28-Aug 3, 2010 issue

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