Illinois Gov. J.B. Pritzker’s skeletal plan for a tax increase is so flawed that it will induce demands for even more higher taxes, according to an analysis by the Illinois Policy Institute.
The problem is Pritzker’s budget is based overly optimistic and unreasonable projections for the state’s growth. The analysis discovers:
When employing one of the most widely used models for forecasting GDP growth, the data show Pritzker’s administration could be overestimating Illinois’ total adjusted gross income in 2021 by $14 billion to $32 billion.
And if the past is any indication, the projections for growth exceed the five-year average.
The analysis also points to an S&P Global warning, “Illinois Budget Proposal Places Risky Bets OnAsset Transfers And Graduated Income Tax.”
The analysis concludes:
Pritzker’s goals – healthy state finances, a strong economy and a tax cut for the middle class – cannot be achieved by the means he’s proposed.
Instead, Pritzker should look to structurally reform Illinois’ spending to address the largest cost drivers of the state’s fiscal problems: government worker health care costs and pension benefits. The Illinois Policy Institute shows how commonsense, bipartisan reforms can be achieved in its recently released “Budget Solutions 2020: A 5-year plan to balance Illinois’ budget, pay off debt and cut taxes.”