Pension Debt Grows, Lawmakers Consider Tax Hikes

Date: November 28, 2016

Your share of pension debt is $27,000; meanwhile, a $2.5 billion tax bill has been introduced.

Pension Debt Grows, Lawmakers Consider Tax Hikes

Happy Holidays
from the Illinois state government: Your share of pension debt just went up.

According to a
special pension briefing released in November from the Illinois Commission on
Government Forecasting and Accountability, the Prairie State’s pension debt
spiked by more than $18 billion in 2016—from $111 billion in 2015 to $129.8
billion. This means that each Illinois household is on the hook for more than
$27,000 in pension debt alone—an increase of 17 percent, or $4,000 from
2015—and that the state only has 38 cents on the dollar available to pay out
these future benefits, the Illinois Policy Institute reports.

Meanwhile, the
state budget crisis continues, and lawmakers in Springfield are considering a
slew of tax hikes to bridge the widening budget gap. HB 293 (Amendment 1), a $2.5 billion tax bill,
has been heard in the House Revenue Committee, but hasn’t been voted on. Among
those considered:

  • Raising the corporate income tax
    to 6 percent
  • Eliminating several business tax
    credits (rolling stock exemption, single sales factor, sales tax exemption for
    manufacturing equipment)
  • Capping retailer’s discount at
    $1,500
  • Ending partial sales tax exemption
    for gasohol
  • Reducing the exemption for the
    state estate tax from $4 million to $2 million

Gov. Rauner,
however, has repeatedly said that he will not approve tax hikes without
economic reforms, including pension reform. The governor recently reiterated
the need for these reforms to be implemented as soon as possible because of
their impact to the state’s budget. NFIB continues to support Gov. Rauner’s
stand for reform and a balanced budget and asks him to keep fighting for small
business.

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