Via Clout Street: Speaker Madigan: Even income tax hike won't solve state money woes
Madigan, a powerful veteran Southwest Side leader, predicts that the economy might get worse before it gets better, meaning fewer jobs and fewer people paying taxes.
"For those that think that tax increases are the answer, it's a partial answer," Madigan told an audience gathered for a panel discussion at the annual Illinois Legislative Latino Caucus Foundation meeting in Rosemont on Thursday. "Because you can raise the rate on the Illinois income tax, but if the economy is not performing you're not going to get an increase in money out of the increase in rate."
The state budget deficit is as much as $12 billion, depending on who is doing the estimating.
Madigan said while the public may be aware of the financial help provided to major banks under the federal stimulus package, many don't know that institutions also borrowed from private lenders, and those loans come due next year. He said the banks may have a hard time making those payments, therefore there is a "major threat of further contraction" in the economy during the first part of 2010.
"Everybody should understand... we are in a very difficult economic situation," Madigan said. "Not everybody in the country fully appreciates the gravity of the situation."