UPDATE: New Proposal for Illinois Budget Released

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UPDATE: ROCKFORD (WIFR) -- Billions of dollars in debt are clinging to the Prairie State. And while the deficit isn't going away anytime soon, The Civic Federation, a non-partisan government organization, has a plan to help balance the budget. The group wants to extend the state's temporary income tax increase by one year, before gradually reducing tax rates. It would also tax pension and social security income. Capping state spending is another suggestion, something 35th District Senator Dave Syverson says he supports.

"Illinois is taking in more revenue this year than anytime in history. The problem is they are spending faster than the money is coming in, we just need government to live within its means," explained Syverson.

Syverson says taxing our way out could push retirees out of the state. Retired teacher Colleen Magee says a combination of less spending and more taxing could help.

"I don't know that just limiting spending will do the job though. I hate to pay taxes just as much as the next guy, but we need to fix what's going on in this state," said Magee.

Legislators will be working on a budget in the next few weeks. The state must pass a plan by May 31.

Syverson says Quinn has not yet revealed his budget plan. Lawmakers expect it in about two weeks and that's when they can start working on a concrete plan.

CHICAGO (AP) -- The Civic Federation is releasing a new proposal it says will balance Illinois' budget, eliminate its bill backlog and reduce taxes.

The plan includes capping spending to help the state pay off its $5.4 billion backlog of unpaid bills over the next five years.

It also would extend the state's temporary income tax increase by a year before reducing tax rates gradually, and calls for taxing pension and social security income.

Officials from the government research group also suggest building a "rainy day" fund to help state budgeters cope with future economic downturns.

They say implementing the plan would allow Illinois to move beyond a "perpetual fiscal crisis."

Authors herald the recent pension reform legislation passed by the Legislature, but say that won't be enough to solve the problem.

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