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Letter to the Editor: Retired Teacher's Solutions for Illinois Pension Crisis

Glen Ellyn Patch welcomes letters to the editor. Letters may be submitted to Local Editor Mary Ann Lopez at maryl@patch.com.

Dear Editor,

I am a retired teacher with a vested interest in protecting the integrity of all publicly funded pensions. I am also extremely frustrated that there has been so little consideration of the real underlying problems our State faces: an unfair state income tax structure, an unwillingness to accept reality with regard to a sales tax on services, and an unrealistic repayment schedule for our pension debt.

Illinois is one of only 7 states in the nation which employs a flat tax and, until the recently enacted temporary increase, at 3% for individuals was dead last in the rate imposed. Even now, at 5% (until 2015), we are not the most highly taxed of this group. A flat tax is inherently unfair: 83% of states with an income tax and even the Federal government have chosen a graduated income tax as the most fair way to tax.

As quoted by Joe Cahill in Crain’s this past July, “former Federal Reserve Chairman Paul Volcker blamed Illinois’ staggering deficits in part on a ‘narrow tax base.’ As the service sector grew during the past several decades, most states extended sales taxes to a range of consumer services…. Illinois taxes just 17 services, fewer than all but 3 other states…well below the national average of 56. Neighboring Iowa, by contrast, taxes 94 services. It is estimated that taxing consumer services could provide an additional $4 billion annually, enough to nearly cover our current $5 billion-plus backlog of unpaid bills!”

And, finally, let’s consider the repayment schedule! This is a self-imposed, overly ambitious, unrealistic schedule. Once we address the revenue side of the equation, it would make sense to refinance our debtinto a manageable and reasonable program of debt repayment.

Pension Crisis Solved!

Dianne McGuire

Janille Palmer Santa Ana January 09, 2013 at 04:14 PM
If only our elected officials weren't criminally incompetent, they might have figured this out for themselves. Unfortunately, you could expose them to such commonsense means to correct the pension deficit problem and they would still do nothing (unless each was assured he or she would personally be enriched in the pocketbook). To the voters who continually elect such fools: you got what you deserve! To those who don't vote: ditto! To the rest of us: it is past time to get up and start making some noise!

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