Lake County Gazette

HAWTHORN WOODS – Illinois has now gone 10 months without a state budget, and the effects of the impasse are becoming difficult to ignore.

The state's tax rates, among the highest in the U.S., have resulted in a mass exodus of residents and businesses; unfunded liabilities for state pensions have exceeded $100 million; vital services for the elderly and the disabled are facing drastic cuts; and funding for low-income students who want to go to college, but cannot afford to, is on hold.

There is even serious discussion about closing public schools in some districts if the state can’t reach a budget agreement by July 1, the end of the current fiscal year.

“The first thing we definitely have to have is a (balanced) budget, but you can’t really do a budget in the current political environment without having structural reforms," newly appointed state Sen. Dan McConchie (R-Dist. 26) recently told the Lake County Gazette. “This is what is currently being blocked by Mike Madigan and the Democrats in the General Assembly. They simply say they are only interested in a tax increase."

McConchie defeated Casey Urlacher and Martin McLaughlin in last month’s Republican primary and was seated in the state Senate this week due to the early retirement of incumbent Dan Duffy, who stepped down April 3 to become president and CEO of the nonprofit group Prevent Child Abuse America. 

“The structural reforms that are being requested are things that other states around us have done, which is why businesses are moving across state lines," McConchie said. “They’re moving because of a better tax environment, more stability, a better workman’s compensation situation and a better tort-reform situation. Businesses are leaving the state because of this, and the Democrats are just unwilling to budge."

Residents are also leaving the state in droves, largely due to the fact that property tax rates are spiraling out of control during a time when property values are steadily decreasing.

Data from the Tax Foundation shows that Illinois has the second-highest property tax rates for owner-occupied housing in the nation. Illinois lost 200,000 residents and $10.4 billion in annual taxable income over a three-year period beginning in 2011. An Internal Revenue Service (IRS) report said Illinois lost a record 81,000 residents and $4.1 billion in annual taxable income during the 2013 tax year alone.

“I know of people who have moved to Florida, Texas and Tennessee, primarily because of the tax burden,” McConchie said. “Florida and Tennessee have no state income tax at all, where we have currently 3.75 percent, and Speaker Madigan wants to raise it to 5 percent or higher. So these people are saying, 'Well, I could stay here, or I could move to a place that has warmer weather and more certainty in regard to what my tax burden is going to be.' People are looking at (a great deal) of instability right now."

In Illinois, the median property tax rate was increased to 1.93 percent in 2010, the second highest rate in the U.S. That's $5,790 in annual taxes on a $300,000 home. Only New Jersey, with a rate of 2.01 percent, has higher property taxes. Illinois also has 17 counties that rank in the top 100 nationally for the highest median effective rates.

“We need to get to a place of stability, where companies and taxpayers want to move to Illinois instead of looking for some way of escape," McConchie said. “This needs to become a destination state again, and that is within reach if the Legislature can set aside partisan politics and instead simply decide to work on behalf of the people in creating common-sense solutions here in Illinois."