NEW YORK--(BUSINESS WIRE)--Newly elected governors in Illinois and Pennsylvania will bring new agendas to these states but will need the cooperation of their respective legislatures to bring about change, Fitch Ratings says.
Illinois faces near-term budget and tax policy decisions to address the structural mismatch between state revenues and spending. With an enacted fiscal 2015 budget that does not fully fund operations and temporary tax revenues scheduled to roll off at the end of December, inaction would be a return to past choices and leave the state particularly poorly positioned when the economy experiences another downturn.
In Pennsylvania, the legislature is also important to tax decisions that could impact local governments and school district financing. During his campaign, Governor elect Tom Wolf outlined raising the state's contribution to schools' budgets to 50% from 32%, with an increase in the income tax and an offsetting decline in property taxes. However, the governor's proposals could be challenged in the Legislature, which could also exercise control over the timing of their implementation.
Bruce Rauner, a Republican, beat Democrat Pat Quinn for the governorship of Illinois. In Pennsylvania's governor race, Democrat Wolf beat Republican Tom Corbett.
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