Taxpayers United of America’s Executive Director, Jared Labell, was interviewed by Illinois News Network about the dire financial state of Illinois’ rainy day fund.
States rely on “rainy day” funds to get by during an economic downturn to avoid raising taxes.
The stopgap budget may have come to the temporary rescue of many state-run operations, but the intermediate spending plan is emptying Illinois’ rainy day fund.
Ideally, the rainy day fund should hold between $1.5 billion to $3 billion, financial experts say. The State Journal-Register reported, however, that as of Aug.12 the fund had dwindled to approximately $180 million. The balance is anticipated to reach zero in a few weeks.
“(The money) is mostly going back into the government, while we see the private sector continuing to squeak by,” Jared Labell, executive director for Taxpayers United of America (TUA), said. “This is very dangerous.”
A study released by the Mercatus Center at George Mason University earlier this year, revealed that most states aren’t financially equipped to deal with the typical drop in revenue that comes with a recession.
Illinois ranked among the least prepared states because its account has been used to help cover the state’s day-to-day expenses when the amount in the general operating fund isn’t enough to cover the state’s bills.
Illinois’ rainy day fund has had a maximum balance that ranged from $226 million to $275 million in the past; however, the daily balance is often zero, or close, the State Journal-Register noted.
Labell said Illinois is in this financial predicament largely because of politicians.
“Politicians care about the next election cycle,” he said. “If that means they will take money from one fund and sweep it into another, they’ll do that if it means short-term political gain.”
Putting Illinois back on a path to financial success will be difficult “because the political process itself is so bad.”
But there is hope, he added, because taxpayers are more aware than ever because of the disastrous situation Illinois is in.
WOODSTOCK, IL – A small, but growing group of local citizens have joined forces to send a message to legislators and local officials about their taxes. The message is simple, “We can’t pay any more taxes than we already are and if you don’t do something serious to improve the situation, you will lose our votes.”
The movement grew out of a protest in McHenry County on June 13th where two people paid their taxes entirely in singles while a group of others gathered to voice their disgust about property taxes. The group has taken the name “Illinois Tax Revolution – Saving Illinois” and is organizing taxpayer rallies. So far, there are three rallies planned; one in McHenry County, another in Lake County and a third in downtown Chicago.
The group has drawn support from a growing number of activist organizations and local office candidates and encourages others to contact the organization to show their support.
“This is all about giving the overburdened taxpayer an opportunity to have their voices heard”, said Bob Anderson, Chairman of the Group’s Steering Committee.
“We hope that taxpayers and local officials will join us at the rallies in a gesture of solidarity and commitment to addressing the crippling problem of taxes in our communities,” said Bob. For those that cannot attend in person, the group offers “One-Page Petitions” that individuals can fill out and send back to the group. These will be brought to the rallies to represent those who cannot make it to the events.