Commentary: Read my lips: More new taxes
This article first appeared in the St. Louis Beacon, March 29, 2010 - On the campaign trail and in the State House, politicians woo us by pledging allegiance to "jobs, jobs, jobs," but we need to pierce the platitudes and demand they focus on the chaos, chaos, chaos.
Agencies reluctantly curtail services for those with mental illness. School districts move to drop more than 15,000 teachers. Small businesses that sell goods and services to the state struggle to meet payrolls while they wait months for checks. All because governors and lawmakers have overpromised and underpaid, allowing the state of Illinois to become a shameless deadbeat.
"We always fought over how large the state appropriation would be. Never occurred to us ... that they would pass the state appropriation and never send the money. Which is a really clever idea," University of Illinois President Stanley Ikenberry wryly told a newspaper editorial board.
"I think the longer we wait, the bigger and more intractable the problem becomes," he added.
Fortunately, pillars of our corporate community concur. Using their influence as folks who actually create those jobs, jobs, jobs, they warn Illinois' post-recession economy will reel as other states rebound unless we take bold steps to eradicate a $13 billion deficit, one of the worst in the nation. So, exhibiting no-nonsense leadership lacking in Springfield, the business titans have proposed tax increases premised on public pension reforms and billions in spending cuts addressing not only the crisis of the moment but long-term obligations that have rapidly escalated in recent years.
The executives do not relish depositing more of their personal and company earnings in government coffers. However, they deem the alternatives of borrowing on top of borrowing to support unsustainable commitments as markedly more repugnant. The state, one of five to lose jobs in the last decade, cannot stem the employment exodus and re-establish itself as a land of promise if it continues careening toward a fiscal cliff.
It will offer neither the trained and educated workforce nor the quality of life needed to entice and keep jobs here. Further deterioration of its once premier higher education system will undercut the capacity of public universities to serve less affluent young people and to do the research and development that catalyzes entrepreneurial growth in a knowledge-based economy. Taxes for those lucky enough to earn wages will skyrocket as the state becomes a wasteland.
The Civic Federation, whose members include companies that helped build Illinois into an economic giant, has proposed increasing the individual income tax from 3 percent rate to 5 percent, hiking the corporate tax from 4.8 percent to 6.2 percent and scrapping some business tax breaks. It also supports taxing retirement benefits, which likely will stir protests from older Illinoisans. But the state could exempt $50,000 of such income and still realize nearly $1 billion.
Indeed, we need almost universal sacrifice to avoid a fiscal armageddon. The Federation and another business-backed group, the Civic Committee of the Commercial Club, properly condition endorsement of additional revenues on eliminating non-essential government outlays -- many of which the two organizations and the Illinois Policy Institute, among others, have identified.
"Although our common sense recommendations for reducing the state budget deficit may not be immediately popular in Springfield, these problems will not go away by ignoring our obligations or borrowing to pay operating expenses," said Laurence Msall, the federation's president.
Thus far in this election year, our politicians have been more fascinated by the "it's the economy, stupid" mantra from the successful Clinton presidential campaign in 1992. But the business community's welcome, aggressive intervention packs a far more relevant message.
It's the chaos, stupid.
Mike Lawrence, former director of the Paul Simon Public Policy Institute at Southern Illinois University, writes a twice-monthly column.