Credit Agency Joins Governor In Criticizing Loss Of Tax Revenue
By aaroncynic in News on Jun 5, 2014 7:30PM
Moody’s Investor Service joined Gov. Pat Quinn in criticizing the proposed 2015 state budget for rejecting an extension of the 2011 temporary income tax increase. The credit rating agency said Wednesday the potential loss of $1.8 billion in revenue by failing to extend the 2011 rate of 5 percent before Jan. 1 will reverse the “significant progress of recent years.” Currently, Moody’s gives Illinois an A3 rating with a negative outlook, the lowest in the country.
The Quinn campaign told NBC5:
“Today's words of warning from Moody's are not a surprise. We provided members of the General Assembly with the earlier warnings from Moody's and the other credit rating agencies that recommended they pass a budget that would fund education and continue our progress in paying down old bills.”
Moody's warning is probably the least of the state’s worries. The near $2 billion budget deficit means more cuts in public services, possible layoffs for state workers and an increase in the amount of backlogged bills. According to a three year financial forecast released by the governor’s office in January, the backlog could leap from about $5.6 billion to $16.2 billion without anything to offset declining income tax rates.
Quinn took the opportunity to criticize gubernatorial opponent Bruce Rauner. The Rauner camp has attacked the governor for his support of extending the temporary income tax hikes, saying that it would “hurt working families.” However, the big shot businessman hasn’t released a plan of his own. According to the Peoria Journal Star, the Rauner campaign said in a statement. “Once again, the people of Illinois can’t trust Pat Quinn and he again shows that his top priority is raising taxes on the working people of Illinois.” Quinn told a crowd at school on the south side Rauner was “too timid, too fearful, to lay out a plan to the people of Illinois.”
Outside of statehouse politics and rhetoric, a budget without a backup plan for a huge revenue loss has real consequences. According to the Bloomington Pantagraph, the Illinois Department of Corrections could face a $90 million cut, which means several facilities may close, putting an even harder strain on an already overcrowded prison system. Caseworkers in the Department of Child and Family Services will see even higher caseloads, and spending on mental health programs will end up getting cut. While funding for education will see a slight uptick, officials say funding for schools is only 89 percent of “adequate.”
In other words, the 2015 budget looks a lot like the same dike politicians have been using their thumbs to plug leaks without looking for a long term fix to stop it from completely crumbling. State Sen. Dan Kotowski told the Pantagraph "It's a temporary solution. We're going to need a long-term solution.” Unfortunately for the people of Illinois, particularly more marginalized and disadvantaged groups, a long term solution is still nowhere in sight.