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Illinois Never Saw a Temporary Tax it Couldn't Make Permanent

Quinn wants to keep the temporary tax hike permanent
Quinn wants to keep the temporary tax hike permanent
Photo by Brian Kersey/Getty Images

The expected automatic rollback of the 2011 Illinois tax increase is in jeopardy, with Quinn and the Democrats who instituted it, leading the call to make it permanent.

No one who lives here is surprised, most Illinois residents never expected it to be rolled back.

The first temporary income tax, was supposed to pay for the tollways to be built. That became permanent, but times were better and people could live with it. But times are no longer better.

When the new income tax was instituted, it coincided with a 2 percent tax cut to payroll taxes to provide relief for all taxpayers, already pounded by the effects of the recession and skyrocketing gas prices.

The Illinois tax wiped out that relief much to the chagrin of all Illinois residents, many of whom hadn't received raises in years due to the economic downturn.

Now it's an election year, and Quinn and the Democrats want to make the cut permanent or face dire consequences. Interesting, though, are the what the benefits the state would reap if the 2.25 percent hike was passed.

The Huffington Post reported that lawmakers expected it to generate $6.2 billion per year.

In the same article, State Senate President John Cullerton said, "We would have all our bills, all those people that are owed money, $8 billion would go back into the economy. People will be paid on time. Our credit rating will be dramatically improved."

But did that happen? No, it did not.

In 2012, Moody's lowered Illinois' general obligation bond rating from A2 to A1and revised the state's outlook from stable to negative. According to the Chicago Suntimes, in June of 2013 Illinois' bond rating "slid to Moody’s lowest bond rating in the nation and the lowest in Illinois’ history because of its underfunded pensions and record of slow payments of appropriated funds"

It also downgraded the the ratings of seven of the eight Illinois public universities, who rely heavily on money from the state, due to Illinois' "underfunded pensions and record of slow payments of appropriated funds."

According to a recent editorial in the Chicago Tribune, since the tax hike was enacted, Illinois has fallen in many key economic indicators; Illinois is dead last in the nation in funding its pensions, is 17th in household income, 27th in poverty, 47th in overall economic performance, 48th in economic outlook due to "burdensome taxes and a high number of public employees as a share of the population," 2nd worst in unemployment, and 48th worst in job creation.

Quinn predicts that education cuts will be necessary if the tax isn't made permanent.

Only .25 percent of the hike was paying for education, perhaps they could roll back 2 percent of the tax, but keep the .25 percent for education.

Illinois residents could likely live with that.

The question is, would it be used for the education of the children or for the high salaries of the Illinois universities' presidents.

Where did the money go?

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