Community Corner

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

Naperville Patch welcomes letters to the editor. Letters may be submitted to Local Editor Collin Czarnecki at collin.czarnecki@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.

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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.

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Pension Crisis Solved!

Dianne McGuire


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