Topinka says Illinois not prepared to handle second economic recession
Illinois Comptroller Judy Baar Topinka said Monday the state is not prepared for a second economic recession.
The tax watchdog group Civic Federation projected Illinois would end the 2012 fiscal year $8.3 billion in debt. The projection comes despite the state government’s decision to enact steep budget cuts and raise taxes earlier this year. Topinka said Illinois has nothing to fall back on should the economy get worse.
“Illinois, because of bad choices in the past, has fared worse than most,” said Topinka at a luncheon Monday. “And it's probably among the least prepared to be able to deal with further economic downgrades.”
Topinka added that this year's income tax increase is not making as much money as expected. In January, the governor approved a 67 percent income tax increase to help cut the state's debt. Topinka said the increased tax revenues were projected to raise $500 billion, but that Illinois' high unemployment rate left the state $60 million short of that estimate.
“If people aren't hired they don't make money,” said Topinka. “If they don't make money they don't pay their taxes. If they don't pay their taxes, I have no money to pay bills. It just goes around in a big circle.”
In August, Illinois's unemployment was at 9.9 percent. The national average was 9.1 percent.