March 3, 2010
ISSUE: Governor Quinn Wants to Hear from You on the Illinois Budget Crisis!
ACTION NEEDED:Take a few minutes to become part of the budget process and submit your recommendations to Governor Quinn. The Governor’s office has developed a website encouraging the public to electronically submit recommendations on the FY11 budget. The Governor and his staff will review and use these recommendations to assist them in developing this budget.
Submit your comments at www.budget.illinois.gov. Click on “Suggest a Solution” from the left column or go directly to http://www2.illinois.gov/BUDGET/Pages/Suggest.aspx.
Our message: Support and pass HB 174. Passage of this bill would provide needed revenue to the state by increasing the personal income tax rate to at least 5 per cent. It also provides for needed tax reform, property tax credits and adds some progressivity to the current tax structure in the form of tax credits to low and moderate income families.
BACKGROUND: HB 174 would increase the personal income tax by two percentage points, from 3% to 5%, and broaden the sales tax base to include 39 services commonly taxed in other states. It would raise the corporate income tax to 5% from 4.8 %. It would generate $5 to $6 billion in new revenues so the state could pay its bills.
The bill would double the income tax credit for property taxes paid by individuals and make it refundable. This credit would be capped at $1500. It would triple the value of the Earned Income Tax Credit and make other tax relief adjustments for middle- and lower-income taxpayers, who make up 60% of all income tax payers.
If HB 174 is passed, the new monies raised in Fiscal Year 2010 will be used to pay the state’s bills. Starting in Fiscal Year 2011 and continuing thereafter, 33 and 1/3% of all new revenues generated from the tax increases in HB 174 will go to the Common School Fund (this new revenue for education must be added to the appropriation amount from the previous year). Similarly, commencing in FY 2011 and continuing each year thereafter, 16 and 2/3% of all new revenues generated from the tax increases in HB 174 will go to the Higher Edu cation Fund. The rest of the new revenue from HB 174 will go to the State General Revenue Fund (GRF).
The LWVIL has supported HB 174 and its earlier version, SB 750, since it was introduced by Sen. James Meeks in 2004. Although HB174 has undergone some revisions, it still provides for schools and necessary services that serve children and families. It will improve the financial status of Illinois.
To learn more, study the following sources:
Center for Tax and Budget Accountability: www.ctbaonline.org.
Voices for Illinois Children, Budget & Tax Policy Initiative: www.voices4kids.org.
Responsible Budget Coalition: www.abetterillinois.com.
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