Ill. Gov. Requests Tax Increase
Springfield, Ill.--Gov. James R. Thompson has proposed a $1.5-billion income-tax increase to ease the state out of recession-caused deficits and provide new revenues for education and other programs.
In a televised state-of-the-state message to the general assembly, the Governor also asked for a $50-million hike in liquor taxes and more revenue for road repairs--in all, a $2-billion tax package.
He told lawmakers that the alternative to his tax proposals would be deeper cuts--as much as $800 million--in funding for education and other state services.
Legality of Reductions
The Governor already has slashed $159 million from this year's appropriation--including $42 million for elementary and secondary schools. The Illinois Supreme Court is now considering the legality of those reductions as state officials warn that more may be needed before the fiscal year ends on June 30.
Education special-interest groups immediately praised the Thompson plan and pledged full support to push it through the legislature.
The Governor proposed raising the income tax for individuals by 60 percent and for corporations by 40 percent.
Governor Thomson said Illinois can no longer avoid the hard realities of recessions.
"The headlines of last weekend spoke of at least 20 states, including Illinois, in cash crises, and we're not alone. Of the 50 states, only a handful will not face deficits as we enter the home stretch of this fiscal year."
The Governor said the state faces a $300-million deficit for this fiscal year on top of the $200 million projected earlier.
Moreover, Governor Thompson said the state must pay in fiscal 1984 more than $600 million in obligations postponed from past years "before any restoration of the 1983 cuts, prevention of 1984 cuts, or new programs can be considered."
Without the tax increases, the Governor said, "state aid to grade schools and high schools will have to drop by $200 million below this year's level. That means larger classes, closed schools, loss of special education for handicapped children, and no substantial ability to move forward with plans to increase and improve teaching in math and the sciences to prepare our students for future employment. And this kind of loss of state aid will put enormous new pressures on local property taxes."
He said the income-tax increase would cost the average family of four "just over $5 a week more."
Vol. 02, Issue 21