One state budget expert says the tax hike plan being debated by Illinois lawmakers wouldn’t do nearly enough to solve the state’s budget woes.
This afternoon, the House Revenue committee approved the tax plan.
It would raise the personal income tax from three percent to five percent. The package would also raise taxes on Illinois businesses.
David Merriman studies fiscal issues at the University of Illinois at Chicago.
“It’s nowhere near the level that would be required to put us on a ... sustainable fiscal path,” Merriman said.
Merriman estimates revenue from a tax hike would only sustain Illinois’ budget through the summer. He said a longer-term fix could involve applying the state sales tax to services, rather than just goods. He also said lawmakers could consider taxing residents’ retirement incomes. Illinois doesn’t currently tax retirement income, though several other states do.
Illinois Democrats are trying to work out a tax hike deal before the new class of lawmakers - with more Republicans - is sworn in Wednesday.
A spokeswoman for Illinois Gov. Pat Quinn, who made an income tax hike the centerpiece of his 2010 campaign, said raising taxes is just one strategy for closing the state’s deficit, which could reach $15 billion by next year.