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Federal Stopgap Exacerbates Illinois' Money Problems

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Thursday, October 1, 2015   

SPRINGFIELD, Ill. – A stopgap federal budget won't take Illinois' state agencies out of limbo anytime soon.

Today kicks off the fourth month of a budget impasse in Springfield.

Jasmine Tucker, a senior researcher with the National Priorities Project, says about a third of every state's services is tied to federal dollars.

"Come January through the rest of the fiscal year they have no idea what the funding level's going to look like,” she explains. “So, again, we're coming against this sort of bad business, bad budgeting practices."

The combination of state and federal budget problems has left some of Illinois' vital services slashed, with others hanging by a thread.

Illinois' Democrat-led legislature is continuing to butt heads with Republican Gov. Bruce Rauner over how to fix the state's nearly $9 billion budget problem.

While lawmakers argue, Ralph Martire, executive director of the Chicago-based Center for Tax and Budget Accountability, says thousands of Illinois families are being hurt.

"We in Illinois literally don't have the capacity to provide those core services that are driven by demographic needs,” he states. “That's really not an acceptable place to be."

Martire suggests several changes can be made to help dig Illinois out of its financial mess, such as expanding the state sales tax base to include more of the service industry.

"Right now, services make up 72 percent of Illinois' economy, and services are what we don't tax with our sales tax,” he points out. “What we do tax is the sale of goods. Well that's only 17 percent of our economy. Of the 45 states with a sales tax, we have absolutely the most narrow base in the country."

Other ideas include taxing some retirement income and bumping up the state income tax.

Martire says many of those ideas have at least some bipartisan support in the state legislature.




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