Sandack: No change in economy after tax hike

• Reprints

Updated: February 27, 2012 8:06AM

State Sen. Ron Sandack (R-21st District) noted we have just marked the first anniversary of the “temporary” 67 percent tax increase, which was passed in the early morning hours of the last day of the 96th General Assembly.

Sandack noted that the tax hike took a week’s pay out of the pockets of Illinois residents – approximately $1,000 that

working families no longer have to spend on groceries, gas, clothes and other necessities.

When the tax increase was passed, Democrats said raising taxes in Illinois would not affect jobs. Yet in the months that have followed, Gov. Pat Quinn has had to offer incentives to several companies in order to keep them in the state, Sandack said. Additionally, he noted, Illinois’ unemployment rate has returned to double-digit levels and was 16 percent above the national average in November.

Furthermore, Illinois’ credit rating has been downgraded once again by a major credit rating, Sandack said, while the others have issued warnings that future credit downgrades could occur. The poor credit ratings will cost Illinois taxpayers millions of dollars in higher interest rates on state debt, he said.

“After years of poor fiscal management, Democrats passed the tax increase, thinking it would somehow help the situation,” Sandack said. “A year later, we see that not only will the spending patterns of the state make it impossible for the tax increase to remain temporary, but there has been no real change.

“The state has taken more money away from working families and businesses, and, in return, they’ve had to scramble to keep many large employers in the state. It has done nothing to address the root of the problem, which is entirely too much spending.”

Sandack pointed out that Quinn’s latest budget projections show that the budget passed last year will be at least $500 million out of balance despite the tax hike. The $500 million, he said, does not include another $2 billion in deferred obligations that are being pushed off into the next year.

“When the tax hike was passed, Democrats said it would be used to pay off old bills and fix the state’s financial problems,” Sandack said. “But looking at the overall plan, we knew that was not feasible because the state projected to continually spend more than it takes in each year.

“This pattern will make it impossible for the tax increase to expire when promised.”

Sandack said there are achievable alternatives, such as the “Reality Check” plan Senate Republicans offered in March. The plan contained a menu of more than $6.5 billion in spending cuts to bring the budget into line with available revenues.

“Cuts to the budget and other changes will never be easy for anyone,” Sandack said. “But without a new budget policy in Springfield, our state will not be able to sustain the current pattern, which will only hurt our residents more.”