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Monday, January 10, 2011

Ind. Gov't. - "In Illinois, a Giant Deficit Leads to Talk of a Giant Tax Increase"

This long story from Monica Davey of the NY Times, dated Jan. 9th, begins:

SPRINGFIELD, Ill. — With Illinois’s budget crisis reaching dizzying, desperate levels, lawmakers here over the weekend were seriously pondering something that would have been unimaginable even a few months ago: a 75 percent increase in the state’s income tax. * * *

In a moment when states around the country are wrestling with withered revenues, Illinois faces a deficit of at least $13 billion; more than $6 billion in unpaid bills to social service agencies, schools and funeral homes; the most underfinanced state pension system; and growing signs of concern from bond investors.

“We are very close to things becoming unraveled,” said Richard F. Dye, the co-author of a study released last week by a University of Illinois institute titled “Titanic and Sinking: The Illinois Budget Disaster.” The report suggested that doing nothing is simply no longer an alternative.

“It won’t take long,” Mr. Dye said, “for this backlog of bills to be so outrageous that people will not deal with the state.”

From this morning's Chicago Tribune, this story by Rick Pearson and Monique Garcia, headlined "Quinn mum on possible tax increase: State leaders not tipping hand ahead of swearing-in ceremonies." From late in the story:
The most daunting challenge for Quinn is the state's financial dilemma, an expected $15 billion deficit and $8 billion backlog of overdue bills — and the refusal of politicians to deal with it.

Quinn and other elected statewide officials will have only moments to celebrate their election victories at the traditional Inaugural Ball on Monday night.

Against the backdrop of the bleak budget and economic challenges that lie ahead, researchers at the University of Illinois' Institute of Government and Public Affairs issued a sobering report that concluded that to quickly balance its budget, the state would have to more than double its income or sales tax, both politically unpalatable.

Posted by Marcia Oddi on January 10, 2011 12:41 PM
Posted to Indiana Government