A proposal by State Sen. Kyle McCarter (R-Lebanon) to balance the state’s budget for 2017 without raising taxes deserves serious consideration, according the Illinois Policy Institute.
“Senator McCarter deserves a lot of credit for trying to pass a balanced budget that doesn’t involve tax hikes,” Ted Dabrowski, vice president of policy at the Illinois Policy Institute told the Record. “Tax hikes would hurt Illinois residents, and the state would just continue in the same downward spiral.”
In his announcement of his budget proposal, McCarter claimed that the last tax increase in the state resulted in 200,000 taxpayers leaving the state.
When taxpayers leave, Dabrowski said, not only do they take their resources and earnings with them, they also create a greater tax burden on remaining residents.
McCarter said his plan was responsible and treated taxpayers with respect.
"We cannot continue to spend more money than we collect in tax revenue,” he said in the release. “Budget waste, fraud and abuse is an insult to taxpayers so the necessary reforms this plan contains makes government more efficient, more effective, and more responsible and respectful to taxpayers."
The proposal would keep current funding levels for education and human services, reform worker’s compensation, and make changes to the way state pensions are funded. While McCarter hasn’t released details about his plan yet, Dabrowski said that the ideas being proposed make sense.
McCarter is proposing that local school districts and public universities should be paying for their employees’ pensions, and is suggesting reforms in procurement, among other areas, to offset that new spending.
“We do believe that, in the end, local school districts and universities should pay those costs,” Dabrowski said. “University professors and school district teachers are not state employees, and there’s no reason the state should be incurring the cost.”
He said that having the state fund such pensions creates a disconnect and leads to lax accountability. For example, he said, it makes it too easy for school districts to offer large raises without considering the long-term impact on the state’s pension funding.
Another proposal would create portable 401(k) retirement plans for all future state employees. Dabrowski said that the Illinois Policy Institute strongly supports 401(k) plans for state workers, because state pensions are too dependent on politics.
“It’s not fair to make state employees rely on politicians for retirement security,” he said. “Senator McCarter is right to take politicians out of the retirement business.”
In his announcement, McCarter said that his plan would not be easy to implement, but that it would offer a path toward prosperity and opportunity.
“This budget is not the easy way out,” he said. “Difficult choices lie ahead, but Illinois families and employers make difficult choices all the time to adjust to financial realities. We should expect no less from state government. We have been taxed enough."