Illinois debates Tax increase | Financial Buzz

Illinois debates Tax increase

On Sunday, the Democrats debated the question of increasing tax in their home state of Illinois. The state has been seeing a budget deadlock that has lasted about two years now. The discussion does not appear to have yielded any concrete results though, as no consensus has emerged as yet.

Devastating cuts if support fails to come in

While there is no clarity yet on what kind of changes may finally take shape, one thing has become rather clear. The key budget negotiator has made no bones about what will happen if support is not ample- major cuts would be on the table in such a scenario. At the meeting on Sunday where the Democrats met, Democrat Rep. Greg Harris made a presentation that had left the House members with little choice about what to do. Harris made it abundantly clear that if there was a shortage in revenue to the tune of some 2 to 3 billion dollars, there would be no choice but to cut down even in key areas such as public schools, higher education and human services.

No annual budget since 2015

Illinois also holds a dubious distinction in that it is the longest running state to go without an annual budget. The last budget was finalized here in the summer of the year 2015. This could all change now though with revenues falling short of needs quite dramatically. Governor Rauner is keen to bring in significant changes that will, ostensibly provide an impetus to commerce. He has also mooted a proposal to freeze property tax bills and this, he explains, will be done in exchange for authority to spend. Rauner has also made his support for tax increases in the state quite clear.  If his proposals gain support, Illinois residents will have to gear up for some changes on the tax front.

At the end of the fiscal year, on June 30th, Illinois will have a deficit of a whopping $6 billion. The State's election board is in such dire financial straits that it is overdue to pay for its anti-virus protection and if it fails to make payment soon, the board will no longer be able to connect to the internet safely. Rep. Jeanne Ives voiced the people's view, cautioning that Illinois residents were very much against huge tax increases, as expected. She went to say that, given the Democrats' stance, it seems unlikely that any decision will be taken with bipartisan support.