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Illinois State Rep Wants to Extend Tax Hike

Posted on in Bankruptcy Attorney Illinois

The Daily Herald reported in a story here that Skokie State Representative Lou Lang wants to extend the 2 percentage point tax increase to cover Illinois' massive pension debt. And although there are many possible options being presented to address this problem, Lang is one of the first lawmakers to propose the extension. The idea was first introduced by Governor Pat Quinn in early 2012.

The proposal would require teachers and other workers to pay 3 per cent more of their salaries into a retirement fund, slowly shifting the cost of teachers' pensions on suburban and downstate schools. Additionally, it would raise the retirement age to 67 (the current age is 55).

Republicans are likely to oppose this, as they've wanted to immediately roll back the state hike. But Lang believes the General Assembly should not be responsible for the costs, and that his proposal is less likely to face a credible constitutional lawsuit than other possible proposals.

The tax increase is offered to help meet Illinois' yearly payment into retirement funds, but Lang says extra money would be refunded to the taxpayers.

Another bill has been proposed by Aurora Senator Linda Holmes—and her plan has been backed by the Illinois Federation of Teachers. It is incredibly rare for these major plans to receive union support, but the Federation believes “this fair, constitutional bill provides a path to paying down the pension debt that, as you know, neither workers nor our modest retirement benefits are responsible for causing.” One of the reasons Illinois is nearly $100 billion in pension debt is because previously, lawmakers have shorted their retirement fund payments.

Holmes' legislation would guarantee the state's share of pension payments, and have teachers, state workers, and university employees pay 2 per cent more into retirement funds.

Lang's proposal also has a similar guarantee for the state's obligation.

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