As some legislative leaders try to put together a budget deal that will require a big tax hike, a Chicago libertarian think tank today rolled out a plan that it insists would balance the Illinois budget without a penny in new revenues.

At a news conference and in a research paper, the Illinois Policy Institute said its plan would not only eliminate the necessity of a state tax hike but freeze property taxes statewide for five years and give many government workers a better retirement deal than they get now.

So, what's in the institute's secret sauce?

Just a few minor things: slashing the state's Medicaid rolls by 600,000 people, allowing local governments to declare bankruptcy and impose rather than bargain pay and benefits, keeping $1.75 billion a year in revenue that the state now shares with municipalities for its own needs, and enacting workers' compensation changes that Springfield Democrats have vigorously resisted.

Among other things.

Piece of cake, right?

Policy Institute chief John Tillman urged reporters not to be "cynical" about the plan, not at a time when the state is losing jobs and residents.

"Politicians have not earned the right to ask Illinoisans for more money," Tillman said, accompanied by state Reps. Jeanne Ives, R-Wheaton, and Allen Skillicorn, R-Crystal Lake. "Our plan, unlike every other budget plan being discussed, ensures that taxpayers are respected and treated fairly rather than being treated like an ATM."

How would the institute do that?

For starters, it would end the "distributive share" of Illinois income tax receipts that is given to local governments, $1.75 billion a year. It also would keep for the state nearly $1 billion a year in pension costs that local school districts would have to begin paying themselves.

You might think that would boost pressure on local towns and schools to raise the property tax. But the property tax would be frozen for five years, and any hike in any other tax would have to be approved in a referendum by a two-thirds margin.

Levying taxes is a "sacred act," Tillman said, and governments should have to rely on more than majority-rules to do so.

In the institute's views, the loss of such money would be made up by savings, mostly in the form of reduced pay and benefits for government workers.

Local governments would get "the ability to set their own collective bargaining rates"—in other words, to impose take-it-or-leave-it terms—and would be encouraged to save money through consolidated purchasing. Also, in Chicago and some other areas, teachers would have to pick up the entire employee share of their pensions, which sometimes are paid by the employer.

At the state level, employees would get $1.1 billion less. That would come from reducing "Cadillac" health benefits, and by slashing the payroll 10 percent across the board, even though Illinois already has a low number of state workers relative to other states.

All of that is rather clear, if debatable. But the institute's pension plan is positively foggy.

Right now, the state has $130 billion in unfunded pension liabilities even though workers hired since Jan. 1, 2011, the "tier 2" folks, get much-reduced benefits.

The institute would eliminate that—cutting mandatory state pension contributions by $1.65 billion next year—by offering 401(k) self-managed accounts.

But the Illinois Supreme Court has ruled that older employees, tier 1, cannot have their benefits cut. And Tillman conceded that the tier 2 benefits are so reduced that the new workers are, effectively, propping up the state's pension systems, cutting the unfunded liability.

Tillman mentioned something about $7 billion to $18 billion in additional contributions to the systems in the next couple of decades. Paying early indeed would cut costs in the long run, but the money would have to come out of a state treasury that can't meet its current obligations.

I wouldn't expect much of this to get too far with ruling Democrats—or, for that matter, with Gov. Bruce Rauner, who has left the door open to a tax hike if other items on his Turnaround Agenda are enacted.

For what it's worth, national studies have shown that while total state and local taxes here are higher than average, so is our income. And they've shown that wealthier groups get a significantly better deal than those of lesser income. Update—Not very surprisingly, AFSCME is not big on the plan. Says a spokesman, "Like their political patron Bruce Rauner, the right-wing IPI will say anything to push its extreme agenda. This so-called report—actually a warmed-over dog's breakfast of rejected bad ideas long peddled by the IPI—is littered with wild exaggerations and outright lies. He adds, "AFSCME members recognize the state's fiscal situation and are willing to do their share. That's why our union has offered to accept a four-year freeze on base wage increases, to pay moderately more for health care, and to continue negotiating on any other issues."