By Kevin Lee 217-528-9604

SPRINGFIELD  –  A Chicago-based nonpartisan policy organization says the state’s budget is in such a desperate situation that a tax increase is warranted.

A report released Monday by the Civic Federation says the state’s budget deficit is almost $13 billion and requires a combination of changes to help fill the gap.

“We do not enjoy being in a situation where we are talking about making such painful cuts in state spending, reforming of the pensions and supporting additional taxes if those pension reforms and cuts are made,” said Civic Federation President Laurence Msall.

Msall said the Civic Federation would only support a tax increase if lawmakers instituted reductions in state spending and changes to the state’s pension systems, such as a different package of benefits for new employees.

The Federation’s proposal would increase the individual income tax rate from 3 percent to 5 percent and the corporate income tax rate from 4.8 percent to 6.4 percent.

Msall said the tax increase, grouped with $2.5 billion in spending cuts, could lower the shortfall to $2 billion.

Gov. Pat Quinn proposed a similar tax increase last year. But his proposal was met with resistance in the state legislature.

The Illinois Senate passed its own version of a tax increase, but the full Illinois House did not discuss the proposal.

Instead, lawmakers passed and Quinn approved a partial budget last year that has made paying state agencies, universities and service providers difficult.

The Responsible Budget Coalition, a group of education and care providers, praised the Civic Federation’s tax increase proposal.

“The Responsible Budget Coalition welcomes the news that the business group the Civic Federation of Chicago now recognizes the need for significant new revenue to adequately fund vital services and save jobs,” coalition leaders said in a statement.

But John Tillman, chief executive officer of the conservative Illinois Policy Institute, said lawmakers should not consider a tax proposal until all other options have been exhausted.

“Last year, Gov. Quinn asked for a tax hike and didn’t get it. In spite of the fact that he didn’t get that added revenue, he was still unwilling, and the Democratically-controlled legislature was still unwilling, to do the spending reforms that would have made the problem much smaller,” he said.

Quinn has indicated he’ll propose another tax hike this legislative session, but he has not offered specifics. His administration will release budget information online on Wednesday.

With an election looming for many lawmakers, Msall said it is important for lawmakers to prioritize the well-being of the state before their own political futures.

“Illinois is in a completely politically intolerable situation. But doing nothing will make this situation worse,” he said.