Local aldermen oppose proposed state income tax increase

Aldermen Moreno and Burnett, speaking on behalf of Aldermen Waguespack, Mell and Solis, object to the proposed State temporary personal income tax increase from 3% to 5.25%. In addition to the increase, the State proposes to leave the one tenth of 1% of the taxes going to the municipalities capped at the current 3% level. At the same time the State is mandating that municipalities cover the police and fire pension funds.

"Citizen's of Chicago do not need any more tax increases no matter what," said Burnett. If the increase does occur and there is no additional revenue sharing from the added 2.25% increase, Moreno said that the proposals are unfair and unworkable.

"Our State government needs to recognize that they don't exist in a vacuum. It's unthinkable to mandate our city to fund massive pension commitments and then not give us any dollars to actually do it. We would have to find other ways to cut spending or raise money from other taxes," said Moreno.

Part of the city's financial difficulties is due to the fact that, like so many other State of Illinois creditors, Chicago is owed large amounts of money.

There is also a proposed hike for corporate income tax rates from 4.8% to 8.4%. A proposal to increase the cigarette tax by one dollar per pack is to go to educational funding. In total, these increases are expected to bring in $7.5 billion each year.

The personal income tax rate would drop to 3.75% in four years and to 3.25% in fourteen years. In addition, the General Assembly would not be able to create any new state program for the next three years.

Adding to the current coffers, the State would borrow roughly $12 billion to pay off the State's backlog of bills immediately as well as the annual pension contribution, using a portion of the revenue from the tax hike to cover those bonds.

According to Burnett, "Chicago is a cash cow for the State of Illinois. If our citizens have to pay into the pot then it is only fair for our citizens to get some of those monies back."

For more information: Progress Illinois, New York Times, ABC-TV