A spending cut that’s really a tax hike
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A few weeks ago, a contingent of Illinois Senate Republicans from the suburbs met with our editorial board to promote an expansive budget reform plan they are touting to bring sanity back to the state’s sorry finances.
The group led by Matt Murphy of Palatine and Pam Althoff of Crystal Lake found a receptive audience around our conference table. We’ve long decried the spending malfeasance in Springfield, and we recognize that tough cuts and hard discipline are necessary if the state’s to avoid a cataclysmic bankruptcy down the road.
The cuts in that proposal amount to $6.7 billion, and of course, you don’t reduce that amount of spending easily. Some of it can be achieved by increased efficiency and decreased waste, but for the most part, you’ve got to do without some things that in better times you wouldn’t want to do without.
“If we don’t take the medicine on the front end, we continue to languish where we’ve been,” Murphy said. “We’re saying spending cuts have to be part of this solution.”
We agree wholeheartedly with that philosophy. How, really, could anyone disagree?
But as with any plan of this magnitude, the devil is in the details.
Let us go on record with this: One devilish detail that needs to be reworked is the notion of a 30 percent cut in the share of income tax receipts going to municipalities.
This is money that was promised to municipalities as part of the bargaining to create the state income tax in 1969.
Reducing that 42-year obligation wouldn’t really be a cut, an example of the state tightening its belt. What it would be is one more instance of a state that has been steadfastly delinquent in paying its bills finding one more bill that it would fail to pay.
Instead of the state tightening its belt, it would be asking municipalities to tighten theirs. In Buffalo Grove, for example, where the village board is expected Monday night to pass a resolution against this proposal, the impact would be a $900,000 cut in revenue.
Not that there isn’t belt tightening to be done all around, but we ought not look to local government to bail out the state over its mismanagement. Let local governments rebate taxes when they tighten theirs.
Instead, this element of the GOP plan would, in reality, drive up property taxes as municipalities all around would look for ways to fill the revenue gap.
In other words, a state government that already raised our income taxes in a cynical lame-duck maneuver now would be raising our property taxes, too.
We like the Republican push for financial reform in Springfield. But this is one element that needs to be rethought.
