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posted: 4/22/2014 12:01 AM

Illinois should at least 'break even'

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Illinois should at least 'break even'

I appreciate the Daily Herald's efforts to identify ways to improve the efficiency of our state and local governments. However, another topic I would like you to report on is the phenomenon of "Payers and Takers."

This refers to a graph in The Wall Street Journal Sunday section, in the Herald's April 13 edition. It shows which states benefit the most from the federal government. For example, for every $1 paid by Illinois taxpayers in federal income taxes, less than one dollar is received back from the federal government in direct or indirect financial support, like road repairs or contracts to local businesses. Since Illinois receives less than it contributes to the federal government, we are considered a "payer" state.

In contrast, a "taker" state receives more financial support than it provides. Indiana is a "taker" state. For every $1 paid in federal income taxes, it receives more than $2 in federal support. In fact, all the states that surround Illinois, along with Texas, Florida and Arizona, are "taker" states. All these states boast about their lower taxes. Well, that's because they are "takers," and taxpayers in "payer" states like Illinois are subsidizing them.

What would happen if Illinois received its fair share of financial support from the federal government? Let's say, going from being a 'payer" state to just a "break even" state. How would this affect Illinois state finances? We face serious financial challenges and the solution includes both cost reductions and income expansion.

We can't afford to let our neighbor states lure businesses from Illinois by proudly proclaiming lower taxes when they take more from the federal government than they contribute. If the playing field was even would businesses really move to Indiana? Perhaps the Daily Herald could investigate and report on this.

Kevin O'Neill


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