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Foster: Rauner Misdiagnoses Illinois’ Fiscal Problems

Jan 27, 2016
Press Release

Washington, DC – Today, Congressman Bill Foster (D-IL) responded to Governor Bruce Rauner’s State of the State address, arguing that Rauner has “misdiagnosed the source of Illinois’ fiscal problems.” 

“In today’s address, Governor Rauner once again presented a false choice between raising taxes and weakening unions to solve Illinois’ fiscal crisis. Yet the Governor fails to recognize a critical component of Illinois’ struggle: the Payer State problem,” said Foster. “Every year, tens of billions of dollars leave Illinois in the form of federal taxes, yet the state receives only a fraction of those resources in federal spending. Instead of cutting services and weakening unions, Governor Rauner should be standing up to Republican leaders in Congress and demanding our fair share.”

While the entire country is governed by the same federal tax code, the per-capita tax burden and the corporate tax burden vary substantially between states.  Furthermore, many states get much more back in federal spending than others.  This transfer of wealth from the “Payer States” to the “Taker States” inevitably shows up as higher state taxes, higher government debt, and underinvestment in education, infrastructure and health care in the “Payer States.” 

To address this problem, Foster introduced the Payer State Transparency Act to study how resources provided by “Payer States” are divided up between “Taker States.” Foster has also formed the bipartisan Payer State Caucus with Representative Scott Garrett of New Jersey to study and find solutions to the Payer State Problem.

In May of last year, the Illinois House unanimously passed legislation (HR0209) urging Congress to pass the Payer State Transparency Act.