Home / World / Rauner quickly vetoes income tax hike, lawmakers will try to override – Chicago Tribune

Rauner quickly vetoes income tax hike, lawmakers will try to override – Chicago Tribune

Republican Gov. Bruce Rauner quickly vetoed an income tax increase on Tuesday, setting up lawmakers for an attempt to override him and end a record budget impasse.

The governor’s veto came a couple hours after the Illinois Senate voted to approve a 32 percent increase in the income tax rate with no votes to spare. Rauner announced the move on Twitter.

The flurry of action unfolded on Independence Day as the state entered its third year without a budget amid Wall Street’s threat of a credit downgrade to junk status, potential layoffs of construction workers and with Illinois already booted from the Powerball and Mega Millions lottery games.

The 36-18 vote in the Senate on the tax hike came after a very short debate, and two days after more than a dozen Republicans in the House broke ranks with Rauner to join Democrats to support the plan amid growing frustration.

An accompanying budget plan, which the Senate also quickly approved 39-14, would have the state spend a little more than $36 billion, about $4 billion more than it currently takes in from taxes.

The movement after years of dysfunction was enough to delay the state’s credit rating from being cut to junk status by Wall Street ratings agencies Monday, though they warned that much rides on a final approval of the budget package.

Even then, S&P Global Ratings warned that long-term damage has already been done.

“Even with a budget, however, it’s likely that Illinois’ finances would remain strained and vulnerable to unanticipated economic stress,” the agency said. “In addition to having accumulated record amounts of payables, the state’s university system has been deprived of state funding since January 2017. If a budget is enacted, the degree to which it closes the state’s structural deficit, provides a pathway for addressing the backlog of unpaid bills, and its impact on cash flows, will be important factors in our review of its effect on Illinois’ credit quality.”

mcgarcia@chicagotribune.com

kgeiger@chicagotribune.com

Source: world

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