By the end of May, the Illinois General Assembly will decide whether to pass a budget that has enough revenue to maintain current spending levels for education, heath care, human services and public safety or pass a budget that makes cuts in all these program areas.
This decision hinges on whether the temporary income tax increase passed in 2011 is allowed to phase out or not. If the tax phases out, Illinois will lose around $2 billion in revenue in FY15 and $5 billion in FY16.
Click here to contact your state legislators and let them know you support making the income tax increase permanent.
Since 2011, income tax rates have been 5% for individuals and 7% for corporations. Under current law, the rates would go to 3.75% for individuals and 5.25% for corporations half way through next fiscal year. The phase out would continue through 2024 ending with rates of 3.25% and 4.8%.
Governor Quinn laid out the impact of this revenue loss in his budget proposal for next year, which included “recommended” amounts based on the tax increase being made permanent and “not recommended” amounts if revenues are allowed to collapse.
An analysis by Voices for Illinois Children demonstrates that the impact on human services would be particularly harsh, as more than half of General Funds spending is considered “mandatory” under current law and would not be affected by the cuts. Mandatory spending includes spending medical assistance programs, state employee group insurance, pension contributions, debt service and statutory transfers into special state funds.
In the FY 2015 revenue-collapse budget, mandatory spending would increase by about $470 million. As a result of the loss of revenue and the increases in mandatory spending, the rest of the budget — “discretionary spending” — would be reduced by more than $2 billion. About three-fourths of the cuts would come from early childhood and K-12 education (31%), human services (31%), and higher education (12%).
The revenue-collapse budget would reduce the General Revenue Funds appropriations for the Department of Human Services (DHS) by almost $400 million. Specific housing-related cuts could impact many thousand of vulnerable people in Illinois, including:
- 21,000 seniors not getting the help they need from in-home caretakers.
- 11,000 victims of domestic violence not being able to find emergency shelter and assistance.
- 13,600 people, including 500 homeless youth, would not having access to supportive housing and homeless services.
- Hundreds of veterans being evicted from state veterans’ houses
- Undermining compliance with consent decrees allowing people with disabilities to move from institutions such as nursing homes into community-based housing.
Click here to contact your state legislators and let them know you support making the income tax increase permanent.