From Illinois Public Radio - News -

Democratic Lawmaker Proposes Making Income Tax Increase Permanent

Lou Lang

Illinois Rep. Lou Lang, D-Skokie, speaks with lawmakers during an Illinois House committee hearing at the Illinois State Capitol in Springfield, Ill., Monday, Jan. 3, 2011. (Seth Perlman/AP)

A top Democrat in the Illinois House says the state's temporary income tax increase from 2011 should become permanent. The money would be used to help fix the state's underfunded pension systems.

When Illinois' income tax rate went from 3 percent to 5 percent, it was supposed to begin easing back down after a few years. State Rep. Lou Lang (D-Skokie) said Illinois cannot afford to let that happen.

"I think most legislators in this building, even those who will never vote to extend that income tax increase, would tell you we need the dollars," Lang said.

Lang would dedicate that money to pensions. The retirement system for Illinois workers is the worst-funded in the nation, estimated to be $97 billion short of what it needs to pay future benefits.

Lang has come out with the latest in a series of plans to address the problem. Like other proposals, his would have school districts and universities take over the employer share of retirement contributions, which are currently paid by the state.

State workers would also feel the pinch -- paying 3 percent more out of every paycheck, and not being able to retire until age 67.

Lang said Illinois taxpayers did not create the pension problem, but he said it is a problem they are stuck with for now.

"We have a responsibility to fix it, and we have a responsibility to have shared sacrifice," Lang said. "If the people of the state of Illinois want to have state employees, we're going to figure out a way to fix those systems so we can continue to have state employees."

Asked about the proposal, Gov. Pat Quinn said he supported the tax increase with the idea it would eventually roll back.

"We'll go with that," Quinn said.

Meanwhile, a top Republican leader is scrutinizing the new Illinois pension overhaul.

Senate Republican Leader Christine Radogno said Wednesday the good news is that there are several pension proposals on the table. But she said the bad news is that there is not consensus.

Radogno questions whether Democratic state Rep. Lou Lang's proposal is fair.  She maintains that funds from the 2011 income-tax increase were dedicated to help fill a budget hole, and be available for schools or public safety.

Categories: Economics, Politics