The Road to a Responsible Budget

In January, the Illinois General Assembly adopted an income tax increase to address the state’s ongoing budget crisis. Our state’s structural deficit has been exacerbated by the economic crisis, thus creating an estimated $15 billion budget gap in Illinois. Heartland Alliance, as a founding steering committee member of the Responsible Budget Coalition, advocated for this new revenue as a critical step towards ensuring the state has the resources it needs to provide supports to the most vulnerable. Our policy and advocacy team talked to legislators about the importance of new revenue, how the structural deficit was negatively impacting those with the greatest need, and encouraged individuals signed-up for our action alerts to do the same.

As a result of the law, Illinois’ income tax increased from 3% to 5% for individuals and from 4.8% to 7.0% for corporations until 2015. In 2015, the tax rate reduces to 3.75% and 5.25%, respectively. The tax rates remain at these levels until 2025, when the individual income tax rate reduces to 3.25% and the corporate tax rate reverts to 4.8%.

While the state estimates these changes will increase its revenue by $6.8 billion annually until 2015, a budget gap remains for the state of Illinois. This continued gap, coupled with the fact the new revenue will not be received until tax time in 2012, means that entities that are owed money by the state of Illinois – social service providers, schools, and others are not being paid in a timely fashion. Heartland Alliance is advocating for the passage of Senate Bill 3, which would restructure the state’s debt, reduce interest rates, and provide the state with needed cash flow to pay providers what they are owed by the state.

Heartland Alliance continues to work on this critical budget issue during the current legislative session and will keep you informed on how you can make your voice heard in the coming weeks and months.