Now that voters have rejected the class-warfare constitutional amendment, let's consider a more adult approach where everybody shares the pain of past fiscal mismanagement but the underlying problems are addressed and hopefully the pain is manageable. Here is an outline for a program to address the state's financial woes on a more permanent basis instead of kicking the can down the road and making it the next governor's problem:
1. No pensions for new state hires; they get a 403(b) plan.
2. To the extent possible, eliminate or reduce the 3% per year guaranteed minimum COLA for state retirees.
3. Amend the Constitution to allow non-flat tax rates, with the limitations that (a) the highest rate on individuals cannot exceed the lowest rate by more than a ratio of 8 to 5, (b) regressive rates (i.e. lower tax rates on higher incomes) are prohibited, and (c) retirement income cannot be taxed at more than one-half the taxpayer's normal tax rate. So for example if the rate on a person's other income was 5%, retirement income could be taxed at no more than 2.5%.
I respectfully suggest to retirees that sooner or later retirement payments are going to be taxed by Illinois because it is the only way to generate enough revenue to dig out of the state's hole, so they would be well-advised to jump at the chance to get whatever constitutional protections they can.
Answer Book 2019
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