SPRINGFIELD - As the Baby Boom generation heads toward retirement age, a new report says senior citizen tax breaks are starting to take their toll on Illinois' budget.

Although eliminating such benefits would be a political hot potato, the Washington-based Center on Budget and Policy Priorities said Illinois' lack of tax on retirement income could be too generous.

"Many states have income tax preferences for seniors, that have been on the book for a long time, that are going to grow considerably more costly as the boomers age and retire," said Elizabeth McNichol, author of the report.

The state offers a property tax break for senior citizens, and unlike the federal government, Illinois has no income tax on any retirement income, which includes social security benefits, pension and IRA's. Such programs cost Illinois $788.9 million in 2004.

"Back when the income tax was first put into effect in '69 and '70, it wasn't a big deal and to make it more politically attractive they excluded retirement income," said Fred Giertz, a University of Illinois political science professor. "That's just continued all the way to today. It's never been questioned, it's never been challenged."

The cost of those tax breaks equals 3.4 percent of the general fund in Illinois. That's almost the amount of money Illinois spent on government services in 2006. By 2030 the senior tax breaks will equal 5.4 percent, or about as much as the state spent on public safety last year.

"It's really important that states take a look at those and see if they're doing what they intended," McNichol said. "Often they were put in place in order to assist seniors who are poor or on limited incomes, but senior poverty is a lot less of a problem now than it was 30 years ago."

State Rep. Mike Boland, D-East Moline, said that not taxing retirement income encourages people to live in Illinois.

"I had some friends of mine, in fact, move from the Iowa Quad Cities over to the Illinois side, because of that," he said.

McNichol said such benefits are a small piece of the puzzle.

"People have said, 'Well, we need these to attract retirees to the state,'" McNichol said. "And there's other research that shows that people chose where they're going to live based on a lot of things n and taxes is maybe one part that equation, but it has a small effect."

Lt. Gov. Pat Quinn said such programs have helped senior citizens overcome poverty, and reversing them could hurt their financial situations even if they're well off now.

Boland added that seniors deserve the financial breaks.

"Most folks, whether they're middle or lower income, they've worked hard all their lives," Boland said. "Give them a little bit of a break in their golden years to try to enjoy their retirement. What little bit that we can do to help them is all the better in my eyes."

Giertz said he doesn't expect change anytime soon.

"[Politicians are] not going to take a big chance, a big risk to start taxing retirement income if they know that all of the people who are retired are going to vote against them, even though it might be good policy from a broader standpoint," Giertz said.

McNichol said tax breaks for senior citizens in Virginia were changed, but it was part of a broader tax reform package. The state changed its treatment of pension income, requiring people to pay taxes on any income over $50,000 and couples on any income over $75,000.

Also, 12 states tax social security income, including Iowa, Minnesota and Missouri.