This article was written by Mike Flannery and featured on Fox Chicago on December 4, 2014.
The State Senate adjourned Thursday, which is not usually big news, but legislators left in place an income tax reduction set to take effect next month. That means many paychecks will likely be a bit bigger in the New Year.
Christmas shopping at the Daley Plaza’s Christkindlmarkt, Chicagoans Peter and Monica Ferro told FOX 32 News they’ve already decided that, if an Illinois income tax cut does put hundreds of extra dollars in their paychecks, they’ll spend it on daughter, Elise, and son, Charles.
“College fund, braces. You know, we’re concerned about our future,” Peter said.
The Ferros said their income’s a bit higher than the typical Illinois household’s $55,000 annually. The typical family would save about $700 next year, assuming the Illlinois income tax drops as scheduled from the current 5 percent to 3.75 percent on January 1 and stays there. Conservatives argue it’s better that families keep their cash than send it to Springfield.
“It means that they’ll have more to spend on maybe a new house, a new car, on their kids’ education, or investing in that business that they want to start,” said Michael Lucci of the Illinois Policy Institute.
However, public finance analyst Ralph Martire argues that, with billions of dollars in unpaid bills and public schools facing big problems, Illinois cannot afford to cut the income tax.
“Losing $3 billion in revenue is something the state fiscal system simply cannot absorb, without significant cuts to those four core services,” said Ralph Martire of the CTBA.
Martire predicted the needed budget cuts would devastate schools, public safety, and health care and social services for the poor. Peter Ferro, though, said Governor-Elect Bruce Rauner and the General Assembly should make difficult choices the way his family does.
“You know, like I’m the head of the household. You know, what can we afford? What can we not afford?” Peter added.