Gov. Pat Quinn called on lawmakers to make permanent the 67 percent temporary income tax increase they approved in 2011.In his election-year budget speech Wednesday, Gov. Pat Quinn called on lawmakers to make permanent the 67 percent temporary income tax increase they approved in 2011.The alternative, Quinn said in a 25-minute speech, is "extreme and radical cuts" to education and other state services that he said "will starve our schools and result in mass teacher layoffs, [...]
Gov. Pat Quinn called on lawmakers to make permanent the 67 percent temporary income tax increase they approved in 2011.
In his election-year budget speech Wednesday, Gov. Pat Quinn called on lawmakers to make permanent the 67 percent temporary income tax increase they approved in 2011.
The alternative, Quinn said in a 25-minute speech, is "extreme and radical cuts" to education and other state services that he said "will starve our schools and result in mass teacher layoffs, larger class sizes and higher property taxes."
"We cannot stand by and allow savage cuts to schools and these critical services to unravel the progress we've made over the past five years," Quinn said.
In order to mollify the impact of making the tax increase permanent, Quinn proposed a $500 property tax rebate to homeowners. He also called for increasing the earned income tax credit to help lower-income families who may not own their homes.
Quinn's budget speech was the first time he directly addressed what should be done about the pending expiration of much of the temporary tax increase. When lawmakers approved raising the state's personal income tax rate from 3 percent to 5 percent, they stipulated that the rate should drop to 3.75 percent on Jan. 1, 2015.
That would cost the state an estimated $1.6 billion in revenue in the budget for the fiscal year that begins July 1, according to Quinn's budget office.
In his speech, Quinn said such a reduction in revenue would mean 13,000 teachers would be laid off, 30,000 fewer students receiving assistance for college expenses, 21,000 fewer seniors receiving home care services and 41,000 fewer children in child care.
By extending the tax, Quinn said "we can stabilize the budget for the long term in a way that provides targeted tax relief where it's needed most, to homeowners and working families raising kids."
Quinn's opponent in the fall election, Republican venture capitalist Bruce Rauner, issued a statement accusing the Democratic governor of breaking promises, first by signing a larger tax hike than he promised and "then he promised his tax hike would be temporary. Today, he broke that promise, too, and is doubling down on his failed policies."
"We can balance the budget without more tax increases, if we create a growth economy and restructure and reform our broken government," he said.
Quinn didn't address Rauner by name in Wednesday's speech, but he did say "those who are telling you that Illinois can tax less and spend less and still expect to fund education are simply not telling you the truth."
During an interview on Illinois Public Television after the speech, House Speaker Michael Madigan, D-Chicago, said he supports Quinn's call on the tax increase.
"I plan to support the governor's position on the extension of the income tax increase," Madigan said. "If we wish to continue to provide a level of services which we've become accustomed to for education and other purposes, then the income tax increase should be extended. My expectation is we will resolve this before the end of the spring session, which is the end of May."
Madigan commended Quinn "for his political courage and honesty."
Senate President John Cullerton, D-Chicago, said the state has made progress in paying down old bills and has cut spending in recent years.
"In order to stay on this path of fiscal stability, we have to maintain the same level of revenue," he said in a statement. "Voting to maintain our current tax rate is a responsible action that keeps Illinois income taxes among the lowest in the nation."
Cullerton told Illinois Public Television the Senate would take up the tax hike extension after the House approves it.
No 'unfair' taxes
Quinn's call to make the tax hike permanent puts him at odds with a majority of Illinois voters, a poll released this week shows. The Paul Simon Public Policy Institute found 60 percent of registered voters it surveyed wanted to see the tax hike expire on schedule. At the same time, majorities said they were opposed to cuts in state spending.
In his speech, Quinn ruled out two other options that have been floated as ways for the state to collect more revenue. He said the state sales tax should not be extended to services.
"I won't institute any new, unfair taxes on everyday services that working people rely on," Quinn said. "It hurts working families the most to tax basic services like going to the Laundromat, like taking your child to day care, like visiting the barbershop, like taking your dog to the vet."
Quinn also ruled out extending the state income tax to retirement benefits, an idea advanced by the Civic Federation watchdog group. Illinois is one of only three states that completely exempts retirement income from the state income tax.
"I will not tax the Social Security checks that our seniors on fixed income rely on," the governor said. "We shouldn't balance our budget on the backs of our senior citizens." Quinn did not address an idea advanced by Madigan last week to have a constitutional amendment that would impose a 3 percent surtax on incomes above $1 million. Nor did Quinn broach the idea of expanding gambling to gain more revenue.
Republican legislative leaders said Quinn wasn't being honest with voters. Senate Republican Leader Christine Radogno of Lemont said Democrats are talking up a worst-case scenario for the budget.
"There's significant wiggle room built into the numbers," she said, adding that there is no reason education has to be cut if the tax increase expires.
"We can't tax our way to prosperity," added House Republican Leader Jim Durkin of Western Springs. "Democrats who run this building do not tell the truth about taxes and spending."
However, Comptroller Judy Baar Topinka, a Republican, said Quinn was on target.
"I thought it was a pretty good speech, and I give the guy credit for taking on the really hard issues that have to be dealt with," Topinka said.
She said she'd like to see the tax increase phased out more gradually rather than have a large part of it disappear at once, which could trigger budget problems. Quinn also called for putting more money into early childhood programs and the monetary assistance program that helps students with college expenses. However, that ran into skepticism even from some Democrats.
"When he started talking about new spending, I have a real problem with it," said Sen. John Sullivan, D-Rushville. "Obviously, we'd love to be able to put more money into early childhood, we'd love to put more money into MAP. But I think given the situation right now, we ought to try to hold the line on spending."
Contact Doug Finke: email@example.com, 788-1527, twitter.com/dougfinkesjr.