I agree with the Tribune’s April 2 editorial urging responsibility in the upcoming discussions of tax breaks. While I, too, have fought for tax relief for Illinois taxpayers, I hope lawmakers accomplish this goal without creating future financial problems. To minimize this risk, I have proposed the following.
First, tax relief should be structured so as to minimize the long-term impact on our general revenues and should be coupled with a slowdown on government spending. Last summer, I proposed a $280 million tax rebate plan, funded with expected tobacco lawsuit revenues, which would have no impact on our state’s general operating revenues. The General Assembly appears to be heading in a different direction–a variety of tax breaks that could reduce the state’s general revenue fund up to $550 million. In order to avoid future financial stress, these proposals should be matched with a corresponding slowdown in state spending.
Regardless of which tax relief plan is approved, Illinois must create a Rainy Day Fund. Illinois is one of only four states in the nation without such a reserve fund. By acting as a cushion against economic slowdowns or revenue shortfalls, a Rainy Day Fund would provide taxpayers, bond-rating agencies and our business partners some comfort as lawmakers make spending and tax relief decisions.
