The state of Illinois has become a key problem area in the U.S. as it faces mounting debt and $45 billion in interest payments alone.
Earlier this week, Republican Treasurer Dan Rutherford said Illinois is headed for financial ruin unless it breaks its "unsustainable borrowing cycle." Today on Varney & Co., the treasurer received some unexpected support from the opposing side.
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"He is 100% right. We should not be digging ourselves into a deeper debt right now," said Rep. Jack Franks (D-Ill.). "Illinois just passed a 66% tax increase on our citizens and every one of those dollars simply went to pay for our current pension obligations."
A position paper issued by Rutherford showed the state currently owes $140 billion in unfunded pension and retiree health care liabilities, $8 billion in unpaid bills and is spending $5 billion more a year than it receives in revenue, despite its January tax hike.
According to Franks, increasing taxes was never the answer.
"The way to stimulate the economy is by cutting taxes," Franks said.
"It is a common sense solution. Look at what the states have had to do to retain businesses, by throwing all these incentives at them. You wouldn't have to throw incentives at businesses if you simply lowered the tax rate."
This idea puts Franks at odds with fellow Democrat, Illinois Gov. Pat Quinn. In the midst of Illinois's financial crisis, the governor has been looking to the legislature for billions in order to pay back some of the state's obligations. While the governor's office insists his plan advocates a restructuring of the debt, not more borrowing, Frank's stance is clear:
"I think he is wrong on the issue."