Illinois lawmakers are back to work after a dramatic vote in the House to increase income taxes.
Attention turns Monday to the Senate, where lawmakers will consider the budget measures approved by the House a day earlier.
The Illinois House of Representatives approved an increase in the state income tax Sunday that will bring the personal tax rate to 4.95 percent. Corporations would pay 7 percent instead of 5.25 percent.
The proposal mirrors a plan the Senate passed earlier this year. It raises the tax rate by 1.2 percentage points, which opponents note is effectively a 32-percent boost from the current rate. Fifteen Republicans joined the majority Democrats to pass the legislation, despite the objections of Gov. Bruce Rauner.
House Speaker Michael Madigan, a Chicago Democrat, praised the move as a bipartisan “crucial step” toward reaching an end to the budget crisis. “While none could say this was an easy decision, it was the right decision,” he said.
“I’m grateful legislators worked together to provide for our schools, protect medical care for the frail elderly, services for survivors of domestic abuse and others in great need,” Madigan said “There is more work to be done, and we will continue working with Republicans to ensure the issues still on the table are fully resolved.”
Shortly after the vote, Rauner declared in a statement that he would “veto Mike Madigan’s permanent 32 percent tax hike.”
“The legislature could have passed a no-reform budget like this one two years ago,” the statement continued. “Instead, they allowed Mike Madigan to play his political games, passed phony budgets, racked up our debt and inflicted pain on the most vulnerable — all of this to force a permanent, 32 percent tax increase on Illinois families.”
The governor said that, in the face of this proposed tax hike, “we must engage citizens and redouble our efforts to change the state. “
State Comptroller Susana Mendoza, a frequent critic of Rauner’s stance on the budget impasse, issued a statement thanking House members “who courageously voted to step back from the fiscal disaster of the last two years.”
“In particular I want to thank the 15 Republican profiles in courage who were true heroes today, standing up for the people of Illinois and not for a Party of One,” she said. “I hope that all the legislators who showed true courage on Sunday’s tough votes stay strong and steadfast in overriding (Rauner’s) irresponsible veto.”
She said that Sunday’s vote sends a strong message to the financial markets that Illinois is serious about getting its fiscal house in order.
The tax-rate increase is expected to bring in about $4.5 billion in additional revenue, which will fill the gap between the $36.5 billion spending plan that won House approval on Friday and the $32 billion being brought in under current tax rates.
Unlike the Senate tax proposal, the House version would be retroactive to the start of the current fiscal year – Saturday, July 1 – rather than the beginning of calendar year 2017.
Most House Republicans opposed the measure. Rep. David McSweeney from Barrington Hills said it would hurt businesses and prompt more people to leave Illinois. “Let’s do what’s right for the taxpayers of this state,” he said. “They are going to get screwed again by Pat Quinn’s budget.”
Despite those objections, the legislation passed on a vote of 72-45. It still has to get through the Senate, which could take it up as early as today
Saturday was the first day of the third straight year without a formal budget plan for Illinois, which has a backlog of unpaid pills estimated at $15 billion.
State Rep. David Harris, R-Arlington Heights, says the interest alone on that debt will cost taxpayers $800 million dollars.
“We might as well put a pile of $800 million there in the center of the floor, light a match to it — because that’s what it’s worth to the people of the state of Illinois,” Harris said. “It’s just interest on back bills.”
Harris grew increasingly animated as he went on.
“My friends, let me tell you something very clearly: I was not — I was not — elected as a state legislator to help preside over the financial destruction of this great state,” Harris said.
Other Republicans sought to play up their authenticity as conservatives.
“I love my guns. And I love coal,” said Rep. Terri Bryant, a Republican from Murphysboro. “As someone who’s on the right, who’s a fiscal conservative, we can’t have vendors — mom-and-pop places — be asked to do services for the state of Illinois, and then after they perform those services, say, ‘Whoops, we don’t have the money to pay you, so we’re not going to pay you.’ And we let them go into bankruptcy?”
Bryant also mentioned that her district includes Southern Illinois University Carbondale. Like many state schools, it’s had layoffs and declining enrollment as state funding has been drastically reduced during the impasse.
“I hope that you will help me to bring my university back to the thriving place that it once was,” Bryant said.
The House had voted 90-25 late Friday morning on a version of a yearlong spending plan. All of the Democrats and 23 Republicans voted in favor of the proposal, a modified version of Senate Bill 6, which was passed May 23 by the Illinois Senate.
The House took no action before the end of the spring session on May 31. The plan will need another vote for final House approval.
The proposed budget relies on more than $2 billion in spending cuts and a probable increase in the income tax to raise $5 billion. Late Thursday night, House Democrats introduced a new bill that would raise the state’s individual income tax rate to 4.95 percent to help pay for it.
Madigan’s announcement of the vote appeared to countermand his earlier statement that there would be no budget vote before Monday. That announcement had prompted House Republican Leader Jim Durkin to rebuke Madigan on the House floor, which sparked applause from other Republicans.
“I still contend that these matters can be resolved very quickly,” Durkin said. “I want this done today.”
As Madigan and Durkin left, a GOP lawmaker yelled out “Speaker Junk” — referring to a possible downgrade of the state’s bond rating to junk status because of the budget impasse.
When a Democrat yelled back, other lawmakers had to get between them saying “knock it off.”
House Speaker Michael Madigan says he sent a letter to the bond rating agencies, “asking them to defer any further opinions relative to the credit rating of the state of Illinois, until we’ve had sufficient time to finalize our budget-making.”
- Illinois Public Radio reporters Brian Mackey and Tony Arnold contributed to this report.