Lawmakers Take Break Before Tax Hike Vote
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SPRINGFIELD, Ill. (CBS) – Illinois lawmakers left Springfield on Friday without voting on a major income tax hike as Democratic leaders tried to drum up support for a plan aimed at solving the state’s budget mess.
As Newsradio 780’s Dave Dahl reports, The House adjourned on Friday without voting for the plan, but is scheduled to return on Sunday.
Gov. Pat Quinn, House Speaker Mike Madigan (D-Chicago) and Senate President John Cullerton (D-Chicago) have agreed on a plan to raise the personal income tax rate from the current 3 percent to 5.25 percent.
LISTEN: Newsradio 780’s Dave Dahl Reports.
That’s a 75 percent increase. In real dollars, that would mean if you currently owe $1,000 in taxes, next year you would owe $1,750.
If approved, the income tax rate would be scaled back to 3.75 percent after four years.
The plan also calls for a proposed increase in the corporate income tax, from 4.8 to 8.4 percent; and an increase in the state sales tax on cigarettes from 98 cents to $1.98 per pack.
State Rep. Barbara Flynn Currie (D-Chicago), the House majority leader, said Friday that the state’s problems are big, and the solutions must be, too.
As the Democrats were planning spend the weekend working their ideas into bill form to present to members Sunday or Monday, House Minority Leader Tom Cross (R-Oswego) said lawmakers would be shocked at the reaction they’ll hear in their hometowns over the weekend.
Cross, suggesting even a repeal of the free rides for senior citizens on mass transit would show some effort to make a cut, said the Democrats just don’t get it.
The new General Assembly is sworn in Wednesday, so any tax deal likely would have to be done by then, as Democratic majorities in the House and Senate will shrink when new lawmakers are sworn in.
Democratic leaders in the Illinois General Assembly believe the tax package would erase the state’s $15 billion budget deficit.
The permanent part of the income tax hike would be used several ways. Some would be devoted to schools and some to repaying an $8.5 billion loan that would be used to pay overdue bills, state Senate President John Cullerton said.
Another chunk would go to property tax relief in the form of annual $325 checks, he said. The checks would replace the property tax exemption that homeowners can now claim on their income taxes.
“I want to emphasize that it is just an outline that we’re working with, and that we’re talking to our members about,” said Cullerton spokeswoman Rikeesha Phelon. “But we’re looking at, possibly, a quarter of a percent that would possibly go for permanent property tax relief. We’re looking at .5 percent of that going toward paying unpaid bills.”
Cullerton said Madigan and Quinn fully support the tax proposal, although Quinn once promised to veto any increase of that size.
Madigan’s spokesman said he couldn’t discuss the speaker’s position. The Senate has approved tax increases in the past, so the biggest question about this proposal is whether Madigan can find enough votes to get it through the House.
Democrats have said they have no choice but to raise taxes as one part of a solution to Illinois’ massive budget crisis. The state deficit could reach $15 billion in the coming year. The government is borrowing money to cover some obligations, letting bills go unpaid for months and cutting corners everywhere from state prisons to state parks.
The House met in private caucus on Friday before adjourning for the day and will be back in session on Saturday, though a vote isn’t expected then.
The state Senate is not back in session until Monday, which is the earliest it would vote.