SPRINGFIELD, Illinois – In an effort to address the state of Illinois’ historic revenue shortfalls, State Senator William Delgado (D-Chicago) is urging the House to pass House Bill 174 which is both a short-term and long-term solution to our state’s ongoing budget crisis. “We are currently experiencing a fiscal crisis and there are not enough cuts we can make to fix the problem,” said Senator Delgado. “We have tried to work with our Republican counterparts; however, they are not willing to make the sacrifices necessary to ensure we properly fund education, provide tax relief and fully fund the state pension system.”

“We are currently experiencing a fiscal crisis and there are not enough cuts we can make to fix the problem...”

With the passage of House Bill 174, Senate Democrats took a major step in addressing our $7 billion budget shortfall. The measure provides just over $5 billion in new revenue to address this year’s fiscal crisis, yet still requires that budget cuts must be made to balance the state’s budget. This is the first time in over a decade since a chamber in the Illinois General Assembly has acted to address fundamental school funding reform that comes with property tax relief for Illinois families

Many have focused on the fact that House Bill 174 is a 67% income tax increase. It is important to note that Illinois currently maintains a very low income tax rate of 3%. Any increase in this tax can be viewed as a major increase. Also, the Balanced Budget Solution passed by Senate Democrats requires $2 billion in cuts.

In addition, Illinois has one of the lowest income tax rates of surrounding states, for example Iowa has a graduated income tax that goes as high as 9%, Missouri has a 4.5% income tax rate, Kentucky is at 6%, and Wisconsin’s income tax rate tops out at 6.75%.

To increase revenues and provide tax relief, this legislation will allow the State to generate over $5 billion in net revenues and almost another billion dollars that will be used for tax credits and exemptions that will make the tax system more equitable for everyone. These exemptions will include:

• Increasing the earned income tax credit from 5% to 15%
• Double the property tax credit from 5% to 10%
• Increase the standard exemption on personal taxes from $2,000 to $3,000

“The comprehensive approach taken in this legislation is needed if the state is serious about education funding, lowering taxes and fully funding our pension system,” said Delgado. “No one likes a tax increase, but House Bill 174 is a reform, not just an increase. It is accountable, sustainable, and keeps Illinois a low tax state.”

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