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Gauen: Illinois tax increase will pay bills that grew as voters dozed

St. Louis Post Dispatch

Thursday, July 6, 2017  |  Commentary  |  Pat Gauen

Budget--State (8) , Taxes, income (86)
Do you buy things knowing you may not ever be able to pay them off? And can you do it without worry for who gets hurt? If so, perhaps you qualify to be an Illinois lawmaker.

For years, legislators virtually ignored the expenses they and their forebears ran up. They knew the state was spending more than it was taking in but continued anyway. They violated the rules of common sense, and probably their oath to support a state constitution whose provisions put tight limits on taxpayers’ debt.

Yet only when faced with unbearable consequences — including threats to downgrade the Illinois credit rating by one final step, to the basement called “junk” — did legislators pass the tax hike that long loomed as the only practical escape.

There is understandable gloom over a 32 percent personal income tax increase endorsed on Sunday by the House and on Monday by the Senate. But it was, unfortunately, a bill that had been coming for a long, long time.

Gov. Bruce Rauner, frustrated that he could not leverage the debt crisis into a win for Republican-backed business and tax reforms, issued symbolic vetoes. He had to realize that since the June 30 legislative adjournment deadline had gone by, it takes no more votes to override his veto than to pass the proposal in the first place. The Senate overrode his veto, and the House presumably will do the same.

Rauner, who demanded changes in workers’ compensation and state pension rules as a condition of supporting a tax increase, held to his guns beyond the point of logical surrender. With large majorities of Democrats in control of the legislative chambers, the mandate he claimed from the 2016 gubernatorial election was always too weak.

I don’t yet know what will happen to another of his conditions: that property tax revenue — which supports schools, cities and other entities — be frozen for four years. While those tax rates are generally high, they were in many cases raised because the mismanaged state had shortchanged the locals on the likes of school aid payments.

From my modest perch, a freeze looks like trying to shift the pain of state mismanagement to the local level. Lawmakers seeking re-election want to tell next year’s voters that, “Yes, we raised your income taxes but we got you relief on your property taxes.”

They do not want to mention that they would be giving up nothing because the property tax revenue does not go to the state anyway.

I am, my critics will complain, missing a critical element: Illinois government is too big and too expensive. My answer is that talk of downsizing your next home is fine, but when the only house you have is on fire, you have to pause to deal with that first.

Not until credit agencies threatened the “junk bond” downgrade, which would hamper borrowing and raise interest rates on loan repayments, did legislators finally put together their first operating budget in three years. It did not occur until social service agencies were closing, road workers were facing layoffs and the accreditation of state colleges and universities was in peril.

There was no more time for debate or political gamesmanship as Rauner, House Speaker Michael Madigan, Senate President John Cullerton and other leaders took Illinois to the brink. I fear that if states were allowed to declare bankruptcy, the pols might have just dumped the mess on employees and vendors who had sold their services and wares in good faith.

Once stability is resumed, serious talks should begin on what the state can afford. The $5 billion annual tax increase more or less balances the operating budget but does not fix the $15 billion backlog of unpaid bills and perhaps $251 billion under-funding of state pensions. Dare we hope to see these addressed against a backdrop of careful consideration instead of deadline desperation?

I do not enjoy the prospect of paying $12 more in state tax for every $1,000 I earn. But I live in Illinois, and we’re talking about our debts. The money was spent in our name, on our behalf.

Perhaps we were fooled, even cheated, by some of our elected officials in their zeal to court re-election votes and campaign donations. But we put them there, by how we voted or how we didn’t.

Many of us didn’t bother to monitor what they were doing. We returned incumbents to office by habit, without determining whether they deserved it — and without encouraging competition against those who didn’t.

Fume as you like when you see the increased state withholding on your paycheck stub. But realize that while we didn’t exactly do this to ourselves, many of us stood by cluelessly while it was done to us.