(IRN)-Like it or not, Illinois lawmakers have done it, passed an income tax increase into law, pending the governor's signature. The increase, which would be retroactive to January First, is actually a tandem: a 2 percentage point increase in the personal income tax (from three to five percent) and a 2.2 percentage point increase in the corporate income tax (from 4.8 to seven percent). It's all expected to raise $6.8 billion to help balance the state's $15 billion budget shortfall.
The votes were 60-57 in the House Tuesday night, and 30-29 in the Senate just after 1 a.m. this morning.
"A portion of this tax is going to expire in four years," said Senate President John Cullerton as he introduced the bill on the Senate floor. He adds future General Assemblies could vote to keep the new rates.
"In four years, they're going to say, 'wait a minute, we have a base here of 39 billion dollars. We can't eliminate the tax increase because we've got such a high number here,'" said House Minority Leader Tom Cross. "And I think that's a cruel hoax to play on citizens to say this is temporary, when in reality it's not."
Cullerton also pointed to spending limits in the bill, which Cross says would allow for a 10% spending increase over those four years, something he and fellow Republicans say is intolerable.
"No growth for four years is what I think people expect out of people in government right now. We are at $33 billion dollars right now, the money that the governor's set to spend,” Cross said, referring to the state's General Fund. "It'll be at $39 billion in 2015. How do you tolerate that? We can't."
FY 2012's spending limit would be $36.8 billion, with subsequent limits being $37.5 billion in 2013, $38.3 billion in 2014 and $39.1 billion in 2015.
Republicans also said on the Senate floor that the 2.2 percentage point corporate income tax increase will scare businesses away from Illinois.
Democrats were playing to a different tune, calling Republicans the party of inaction.
"They're on the sidelines. They don't want to get on the field to play," said House Speaker Michael Madigan of Republicans.
"I'll get calls tomorrow like I have all week: 'Why don't you take a pay cut, that'll solve the budget problem,'" said State Representative Lou Lang. "But legislators have already taken a pay cut. We could take away all of our salaries and we'd still have a $15 billion problem."
The puzzle crafted over the last couple of weeks is missing some pieces. When asked about the dollar a pack tax increase on cigarettes, Madigan said little. "It failed," he said. "It didn't have enough votes." The bill was shot down in the House 51-56-1.
The cigarette tax was a bargaining chip with members of the Black Caucus, a group who wanted the some $300 million in cigarette revenues to put towards education.
The 97th General Assembly is set to be sworn in on Wednesday at noon. At that point, any legislation left over from the 96th will have to start over.
(Source: Illinois Radio Network) |
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