Illinois Policy Institute proposes property tax freeze, moving pensions to self-managed plans, no tax increase

By Ann Maher | Jan 31, 2017

The Illinois Policy Institute outlined a budget reform plan today that would balance the state budget and close a projected $7.1 billion budget deficit without raising taxes.

"Our plan, unlike every other plan being discussed in the state ensures that taxpayers are respected and treated fairly instead of being treated like an ATM machine to pay for the past mistakes of elected officials," said John Tillman, CEO of the Illinois Policy Institute.

The five areas outlined by the Illinois Policy Institute and their projected savings include:

-Property tax freeze - $3.4 billion-

-Ending Illinois’ pension crisis through self-managed plans - $1.65 billion less than baseline

-Aligning AFSCME costs with what taxpayers can afford - $1.1 billion

-Streamlining Medicaid spending - $415 million

-Higher education reform - $500 million

A current proposal advanced by Senate Leader John Cullerton (D-Chicago) and Minority Leader Christine Radogno (R-Lemont) calls for an income tax increase and borrowing $7 billion to pay overdue bills, among other measures. A vote had been scheduled last week on a package of bills dubbed the "Grand Bargain" but has been delayed until Feb. 7.

Tillman did not take direct aim at the Grand Bargain, rather, he described results of a personal income and corporate tax increase imposed in 2011 which he said did "none of the things" that politicians said they would do.

That tax increase, which was enacted under former Gov. Pat Quinn and partially sunset at the end of 2014, promised a stronger economy and that the state's backlog of bills would be paid down.

Tillman said that despite generating an additional $31 billion in revenue, the 2011 tax increase failed to fix the state’s economy or erase the backlog of bills.

"Instead, Illinois was thrust into an even deeper economic hole, the state’s pension debt increased by more than $20 billion over that period, businesses fled the state and so did hundreds of thousands of Illinois residents," he said.

"It made things worse."

Tillman was joined at a press conference by Republican lawmakers Jeanne Ives (R-Wheaton) and Allen Skillicorn (R-Crystal Lake).

Ives said that "nearly every conversation she has at the door" with constituents in Wheaton results in people telling her that they cannot afford their property taxes, some saying they will leave the state when their kids are finished with school. She also said they tell her they are not getting the benefit they deserve out of services paid for.

"My district is very much aware of where the state is headed," she said. "Unfortunately, the General Assembly is not."

Illinois is an "outlier," Ives said.

"Our financial condition is what is extreme, not these policies we are tyring to put in place. We need to correct that."

She said Springfield is "all about lobbyists, special interests, unions and longtime political people who have made their mark in Springfield, and not made their mark in private sector or with taxpayers."

Ives also said that the ideas being proposed in the Illinois Policy Institute budget are not new, and that many, including pension reform, have been written up years ago but have never gotten out of the House Rules Committee.

Skillicorn said the state needs bold leadership and transformative policies, including property tax reform since some Illinoisans pay two-to-three times more than average in the country.

He also said that municipalities should provide services at lower costs and that pension reform is needed, otherwise the "bubble," left unchecked will lead to more property tax and income tax increases.

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