JOLIET – U.S. Rep. Bill Foster, D-Naperville, called on Will County elected officials to support legislation highlighting the issue of “payer states” like Illinois losing billions in federal spending.
Foster told local officials Friday that Illinois loses about $20 billion every year because it pays $1.36 in federal taxes for every $1 it receives back in federal funding.
That money lost could pay for hundreds of Will County infrastructure projects, as well as other state needs. The $1.5 trillion lost from the “payer state problem” over 35 years could also pay state pension debt 10 times over, he said.
Local officials such as state Sen. Pat McGuire, D-Joliet, and Will County Executive Larry Walsh Sr. supported Foster and new legislation he introduced increasing transparency on the problem, called the Payer State Transparency Act of 2015.
McGuire said “a better balance of the money” exchanged between Illinois and the federal government would help Illinois during its current budget crisis.
“Illinois is the economic and cultural capital of the Midwest, so the more investment, the more resources devoted to our state, the greater the effects for the surrounding states and the nation as a whole,” he said.
Walsh said extra funding could help Will County – one of the fastest-growing counties in the state – with its infrastructure and transportation projects.
Foster said Illinois is a “payer state” like California, Texas, Florida and more than a dozen other states. Many of those states have high populations compared to “taker states” – like neighboring Indiana and Iowa – which get back more in federal spending than what they put in.
Foster said one of the reasons why the payer state problem exists is because taker states are over-represented in the U.S. Senate, such as North Dakota and Montana.
“The senators from those [taker states] got power in the Senate and started working the rules,” he said. “And so in the dark of night, in committees, this problem has ratcheted up again and again.”
He said the payer state problem is a central issue for Illinois that negatively affects infrastructure and education investments. It also leads to increased state taxes.
“It is a big driver of industrial flight, because when we have to turn up our taxes from the fact that we get back less from federal spending, then it makes us less attractive,” he said.
Other states suffer from the same problem and New Jersey is suffering from it worse than Illinois, Foster said. He has formed a bipartisan payer state caucus with U.S. Rep. Scott Garrett, R-New Jersey, to support the Payer State Transparency Act.
“This is not a Democratic or Republican issue,” he said.