By U.S. Sen. Mark Kirk, R-Ill.
The nonpartisan Tax Foundation defines Tax Freedom Day as the day: “When the nation has finally earned enough to pay all the taxes that will be due for that year…” In Illinois, Tax Freedom Day falls on April 23, meaning every dollar earned by citizens of Illinois from Jan. 1 until April 23 will go to pay taxes owed to local, state and federal governments. Illinois’ late Tax Freedom Day, the last in the Midwest and tied for fifth latest in the nation, is a reflection of our state’s current financial condition.
Last October, Sen. Kirk’s office released the original Report on Illinois Debt with assistance from his Sovereign Debt Advisory Board. The report warned of a growing crisis in the state of Illinois due to expanding debts and unfunded obligations. Since then, Illinois leaders have failed to make necessary changes: increasing taxpayer liabilities, deteriorating the state’s fiscal environment and incurring additional debt downgrade by Moody’s Investor services. On top of our late Tax Freedom Day, Illinois citizens must also worry about high debts that may drive even higher taxes down the road.
The Updated Illinois Debt Report shows how Illinois leaders have failed to make necessary reforms, address the impacts of overspending and fix pension funding, causing the fiscal outlook of the state to worsen. The main points include the following:
Moody’s has downgraded Illinois’ debt from A1 to A2, the lowest rating in the nation. The state’s low credit ratings have resulted in Illinois paying more to borrow money than other states.
The state is expected to end the fiscal year with a $508 million operating deficit, despite the $6.8 billion income tax increase pushed through last year.
Although the governor’s budget proposes modest cuts, pension and interest costs have increased so much that total spending is still up.
The state is still failing to pay its bills on time. In January, the Comptroller’s office estimated Illinois had a backlog of $8.5 billion in unpaid bills. As of yesterday, the General Fund alone had a backlog of over $6 billion in unpaid bills.
Overspending, tax hikes and blocking fiscal reform have given Illinois the worst economic reputation in the nation. As the Illinois General Assembly prepares to cast a critical vote on our state’s Fiscal Year 2013 Budget, state leaders should recognize the need to reverse the negative trend in Illinois and promote fiscally responsible policies.
Please feel free to contact Sen. Kirk’s office at (312) 886-3506 or reach us online at www.kirksenate.gov whenever an issue of concern to you comes before the Congress. For updates on our work on your behalf and in Washington, “Like” my Facebook page and “Follow” me on Twitter.
From the April 25-May 1, 2012, issue