Pension poll: Illinoisans oppose permanent tax hike, but mixed on cost shift to local schools

Published: February 21, 2013 

Illinoisans overwhelmingly oppose a permanent increase in income tax to fix the state's public employee pension debacle, according to a new poll.

The Paul Simon Public Policy Institute poll found that 63 percent of respondents "strongly oppose" or "oppose" making permanent the temporary, 67 percent increase in the state income tax. The increase is equal to a week of pay.

But the poll also found mixed support for the so-called pension "cost-shift" which would put the burden of teacher pensions on local school districts rather than the state. The cost shift is generally opposed by downstate lawmakers, who say it would almost certainly result in property tax increases.

Both ideas -- making the tax permanent and shifting retirement costs to local school districts -- are part of the latest proposal being offered to address the $96 billion deficit in the five state pension systems that cover public employees.

On making the tax increase permanent, about 29 percent of the poll's respondents said they are in favor or strongly in favor. The remaining 8 percent were undecided.

John S. Jackson, a visiting professor at the institute, said the poll also showed that voters are aware of the pension funding problem.

"There's a general feeling that state employees are going to have to take some losses in their pension plans, but a majority of people in Illinois is not supportive of draconian measures," Jackson said.

On the cost shift, there were 45.1 percent in favor of the proposal and 42.6 percent against. The most support came from respondents in Chicago, where 49.1 percent supported the cost shift. Downstate, only 36.6 percent of respondents supported the shift.

Chicago schools have their own pension system, so they wouldn't see a cost increase from the shift. Supporters of the cost shift say local school districts award pension benefits but require the state to pick up the tab, which provides no incentive to rein in pension costs.

The legislature's latest pension proposal was offered Wednesday by Rep. Lou Lang, D-Skokie. His plan would rely on the temporary tax rate increases passed in early 2011, when the individual income tax rate went from 3 percent to 5 percent, and the corporate rate from 4.8 percent to 7 percent. In 2014, the rates are supposed to fall back to 3.75 percent for individuals and 5.25 percent for corporations.

The poll also found that 59 percent of respondents "strongly oppose" or "oppose" increasing state revenue by expanding the sales tax to cover services such as dry cleaning and haircuts, which currently are not taxed.

On expanding the sales tax to services, about 37 percent of respondents were in favor or strongly in favor. The remaining 3 percent were undecided.

The poll surveyed 600 registered voters across the state.

Following are the poll's questions and results:

1. Would you favor or oppose a proposal to suspend retirees' annual cost of living increase for six years?

Strongly favor: 21.8%

Favor: 14.7%

Oppose: 20.7%

Strongly oppose: 36.3%

Other/Don't know: 6.5%

2. Would you favor or oppose a proposal to apply cost-of-living increases only to the first $25,000 of retirees' pensions?

Strongly favor: 21.5%

Favor: 23.7%

Oppose: 16.3%

Strongly oppose: 28.0%

Other/Don't know: 10.5%

3. Would you favor or oppose a proposal to defer retirees' cost-of-living increases until they reach age 67?

Strongly favor: 30.7%

Favor: 27.7%

Oppose: 12.8%

Strongly oppose: 24.7%

Other/Don't know: 4.2%

4. Would you favor or oppose a proposal to increase the age at which retirees can receive full pension benefits from 65 to 67 years of age?

Strongly favor: 35.7%

Favor: 21.2%

Oppose: 11.7%

Strongly oppose: 29.7%

Other/Don't know : 1.8%

5. Would you favor or oppose a proposal to increase the age at which retirees receive state-paid health care benefits from 65 to 67 years of age?

Strongly favor: 29.7%

Favor: 19.3%

Oppose: 14.8%

Strongly oppose: 33.8%

Other/Don't know : 2.3%

6. Would you favor or oppose a proposal to increase the share that Illinois school districts pay for their employees and to reduce the amount that the state pays?

Strongly favor: 21.7%

Favor: 23.5%

Oppose: 19.3%

Strongly oppose: 23.3%

Other/Don't know : 12.2%

7. Do you favor or oppose a proposal to make permanent the recently passed temporary state income tax increase?

Strongly favor: 11.8%

Favor: 16.8%

Oppose: 19.0%

Strongly oppose: 44.3%

Other/Don't know : 8.0%

8. Do you favor or oppose expanding the sales tax to cover services like dry cleaning or haircuts, which are not currently taxed?

Strongly favor: 16.3%

Favor: 21.0%

Oppose: 16.0%

Strongly oppose: 43.5%

Other/Don't know: 3.2%

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