In order to pull the state out of its deficit, Illinois should change its constitution by adopting a progressive income tax, said the executive director of the Center for Tax and Budget Accountability during a lecture Monday.

Ralph Martire, the executive director of the Center for Tax and Budget Accountability in Chicago, presented information on the Illinois budget and gave advice on how the encroaching $10 billion deficit could be resolved. 

 “We found that Illinois could raise $2.4 billion more in revenue than it currently raises with its flat taxes, and it would cut the income tax burden for 94 percent of Illinois with everyone at a $150,000 figure or less,” Martire said. “Millionaires’ affected tax rate would be 4.3 percent, which is just above the average tax rate so it is not like this is an ‘eat the rich’ strategy.”

According to Article IX, Section 3 of the state constitution, incomes taxes are flat, at a non-graduated rate. 

Martire said if a structured program was in place for three years, then the deficit would be eliminated, and by year four, the state could start implementing education and human services reform initiatives.  

Martire also said the public rhetoric on increasing taxes is 180 degrees from accurate in how these fiscal processes impact the state economy. 

“It is not to say that if you raise your taxes, you are suddenly going to grow your economy because it depends on how you invest that revenue, but to simply say high tax rates are uncompetitive and hurt the economy activity is misleading, false and ignores the data,” he said. 

Martire said he criticizes Gov. Pat Quinn’s strategy presented during his Feb. 22 Fiscal Year 13 budget address to lessen the deficit through spending cuts because spending is not what caused the deficit. 

When looking at nominal numbers without taking inflationary factors in consideration, Martire said it will appear that spending has increased, but that is not the case.

“Using the Employment Cost Index when comparing state spending levels, the budget for 2013 as proposed by the governor is actually 24.5 percent lower than in 2000,” Martire said. “The only way you can make a claim that spending is the cause of the problem and the state has this voracious appetite to spend more and more every year is if you look at the nominal-dollar comparison, which is a meaningless comparison.”

It is not tax increases, if they are well designed, that kill the economy; it is spending cuts, he said.

“About 68-to-70 percent of the economy every year is consumer spending, so when state government cuts its expenditures on services, it is cutting the wages of workers who then can’t go out and spend,” Martire said. “If instead of cutting spending, the state raised taxes and used this revenue to maintain expenditures, then that would be positive for the economy.” 

Eastern’s chapter of the University Professionals of Illinois sponsored the event.

Rachel Rodgers can be reached at 581-2812 or [email protected].