Illinois House reaches $5 billion breakthrough on budget

Illinois House reaches $5 billion breakthrough on budget

SPRINGFIELD — Defying Gov. Bruce Rauner and his millions in campaign funds, more than a dozen Illinois House Republicans Sunday night voted for a permanent increase in the individual Illinois income tax from 3.75 percent to 4.95 percent.

The corporate income-tax rate also will increase, from 5.25 percent to 7 percent.

The vote was 72-45, a veto-proof majority if the vote holds after a promised Rauner veto.

Moments later, the House approved a companion budget bill, 81-34.

The Senate still must vote on the $5 billion income-tax increase, perhaps as early as today, but Democrats hold a greater majority in the Legislature's upper chamber, and it is expected to pass with less drama than the House's more than two hours of debate that included shouting, jeering and some tears.

One preliminary estimate said that the tax increase would cost the typical married couple with two children who have an adjusted gross income of $100,000 a year and pay $5,000 in property taxes about $1,100 more annually.

Once it is approved, the tax increase would be retroactive to July 1.

Area representatives split on the tax increase, with support from Democrat Carol Ammons of Urbana along with three of the 15 House Republicans who voted yes: Chad Hays of Catlin, Bill Mitchell of Forsyth and Reggie Phillips of Charleston.

Voting no were Republicans Tom Bennett of Gibson City, Dan Brady of Bloomington and Brad Halbrook of Shelbyville.

"We're in a state that in the fiscal year that ended two days ago spent $40 billion on less than $32 billion of revenue. There's nothing Republican about that," Hays said. "We have $15 billion in back bills. I've been to a lot of Republican events in my life, and I've never, ever been in a roomful of Republicans who said, 'My philosophy on paying bills is to stiff the vendor.'"

Hays said the threat of seeing the state's credit rating plunge to junk-bond status, plus almost $15 billion in unpaid bills, were factors that influenced his vote for a tax increase.

"This isn't easy. The negotiations took place over three years of spring sessions. I stood tough for a long, long time, but we're about to shut down road projects, and we're accruing interest on back bills at a rate that is staggering," he said. "This isn't something that I've ever done before, but there comes a time when you have to move forward."

Phillips, whose district includes Eastern Illinois University, said he voted in his district's best interest.

Noting that he owns a business with almost 1,000 employees and sympathizes with opponents of the tax increase, Phillips added, "I'm excited and happy to stand here in some way to say 'I'd like to save my university, I'd like to save my town.'

"Although it's against some of the principles I came here for, I am going to vote for this bill. It's not the best bill, but it's the best bill we've got at hand, and if it saves my school, I'm going to be for it."

Another Republican who represents a university area, Rep. Terri Bryant of Murphysboro, began crying during her speech as she explained her yes vote.

"I hate tax increases, hate them, and it will hurt small business to do this, but I also think it hurts small business when you ask them to do business with the state and then you don't pay them," she said. "We must have a balanced budget, and if that means that we must increase taxes right now to do it, I, like one of my other colleagues, know I'm probably going to get primaried on this," she said, referring to the possibility of losing her seat in the next primary election.

"Do I want to raise taxes? Absolutely not. Do I think it's the right thing to do down the road? Absolutely not. But I want you to remember what we're doing here today. We're paying the bills for our bad behavior, even before I came here."

But several Republicans noted that the income-tax increase didn't include any property-tax relief, pension changes, workers'-compensation reforms or other pieces of Rauner's "Turnaround Agenda," although state Rep. Greg Harris, D-Chicago, said negotiations on those issues would continue.

"There's no relief here. There's no reform here for a bloated state government. There's no cleaning up our corrupt politics," said Rep. Peter Breen, R-Lombard. "There's no sign that anything is going to change in Springfield."

And Rep. Jeanne Ives, R-Wheaton, said, "The Illinois economy is too weak for a tax hike," and legislators "need to fix our job-creation problem first."

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JamBam wrote on July 02, 2017 at 10:07 pm

Vote out EVERY SINGLE GOP'er that voted for this permanent tax hike.  Absolutely ridiculous.  Illinois was ALREADY the highest taxed state in the entire US.  Now we are even adding more to it?  You kidding me?  

https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416/

You can say goodbye to a ton of jobs because no company wants to pay a 7% corporate state tax, on top of the corporate federal rate (lets hope Trump can at least cut that).  

Chad Hays and Bill Mitchell. You two pathetic wastes of space just sold out your entire districts to Mike Madigan. Everything the GOP did, to get Bruce Rauner elected, you two along with 13 other GOP members sold down a river.

The liberals can have this state.  My family is leaving.  This was the final straw. Been in Illinois my entire life.  I'm done.  

Tax and spend, when you have a base of parasites that don't work and only take up resources, will never funtion properly.  There's not enough worker bees in Illinois to fund Mike Madigan's BS.  

Bruce Rauner, you fought the good fight.  But too many of the GOP members in Illinois are nothing but tax and spend libs.  I hope the RNC gives none of you guys a penny.

Anonymous71 wrote on July 03, 2017 at 9:07 am

JamBam,

On the contrary, the GOPers who voted for the tax increase put their state and constituency above their party. They have earned my vote. Had the state left the tax increase in place several years ago, the state would have already be in better financial shape. 

JamBam wrote on July 03, 2017 at 10:07 am

Illinois was ALREADY THE HIGHEST TAXED STATE IN THE ENTIRE US.   And you are ok adding even more to it?  Why?

This state is done.  You can't keep taxing your citizens, and corporations, and expect people to just take it.  Not when there are plenty of other states in way better shape, with way lower taxes and way better jobs.

If these other states can figure how to have really low taxes, plenty of good jobs, and enough public resources to make life easy - why can't Illinois figure this out?

Illinois is the Venezuela of the US.  I'm out.

Anonymous71 wrote on July 03, 2017 at 5:07 pm

Illinois is not the highest taxed state. Please share your source. I do not believe that for one minute. There is no way Illinois has higher taxes than either NY or NJ. The good news is that I believe moving expenses are tax deductible.

chief21 wrote on July 03, 2017 at 5:07 pm

The tax used to be 5%...and what happened?  The debt grew even with the 5% rate. Why in the world would you give these people MORE money? A few years from now, we'll hear the cry for 6%. How to save $$$$.....bid out Bureau of Motor Vehicles, Prisons,etc to third party.Quit paying janitors $22/hr only to retire at 50 with a 3% annual raise regardless of inflation.

Reykjavik wrote on July 02, 2017 at 10:07 pm

It aint law yet.  But something has to change.  And taxes are required to cover the costs of this operation.

In a decade or so, Madigan and Rauner will be replaced, hopefully, by more reasonable people.  Maybe we'll even have some gender balance in Illinois politics.  And continuing evolutionary changes are indicated in the city of Chicago.  It will be a slow process.

But the present state of affairs is totally unaccceptable because the state is killing our combination bet on the future: our youth and their education.

JohnRalphio wrote on July 02, 2017 at 10:07 pm

THANK YOU to representatives Mitchell, Hays, and Phillips for acting with some sense and in a spirit of compromise. We can't take any more delays on a budget and anyone who says otherwise is being willfully stupid at this point.

MahometMatt wrote on July 02, 2017 at 11:07 pm

While I'm disgusted by the prospect of a massive tax hike with no reforms attached, the GOP representatives who broke ranks to support the tax hike clearly did so because their districts will be some of the first and the fastest to burn if this drags on for more than a few additional days. Entire state university communities are teetering on the brink of complete annihilation that would start occurring in earnest within weeks.  I'm angry, but not with folks who made a principled and anguishing decision to save their districts--at least for a while.

JamBam wrote on July 03, 2017 at 12:07 am

None of these lawmakers have the guts to make the tough decisions. And the tough decisions means telling some of their constitiuents "NO".  "NO" as in whatever special interest you may have in the government funding a project is NOT going to happen anymore.  

We got the highest total tax burden in the entire US.  It'd be one thing if we also had the highest standard of living, but I don't think anyone in the US would argue that Illinois is the best state to live in. So I'm wondering how a state government, who taxes its citizens collectively higher than any other state in the US, can STILL not be able to pay its bills.  If you don't have enough revenue to pay your bills, then STOP FREAKING SPENDING.  CUT CUT CUT.  

It's not "eh we don't have enough money. Just pass another tax increase".   

Its assinine, and I'm not even going to blame the democrats here, because it's in their nature to be big govt parasites who look for anyone but themselves to fund their garbage. This is all on the gutless republicans in the State legislature.

I mean, the very issue that has gotten Illinois into horrible financial shape is not because of low taxes.  I mean, we are already taxed higher than any other state. It's completely on the bloated pension system, and no reforms at all there?  The very thing that has caused this, and you don't even fix it?  You just pass higher taxes to cover short term bills?  

Sickening. I hope every corporation moves out of Illinois.  Let this state and it's reps burn.  And any citizen that can get out, get out NOW.  

glimmerman2310 wrote on July 03, 2017 at 1:07 am

You do realize this tax increase was already there till rauner took office and did not extend the increase right?  Its was 5% before rauner took office then he let it lapse to make this mess....  4.95 is not that bad and its not as much as people are making it out to be.

 

at 50k at 3.75 its 1875 in taxes a year

at 50k at 4.95 its 2475 in taxes a year

 

that 600 dollars a year more or 11.54 a week extra or 50 bucks a month.

JamBam wrote on July 03, 2017 at 10:07 am

4.95% in a vacuum isn't bad. It's every other tax (including property, sales, etc) that make this state the most heavily taxed state in the entire US.  Can you honestly say you are getting your money's worth?

And this is always the argument made for higher taxes.  "well, its only 1% more"  Well what happens in 3 years when taxes are raised again to 6% or 7%.  If you don't cut government spending, then they are going to spend whatever, run up as big of deficit as possible, and simply pass more tax increases to pay for it. The only advantage to living in  Illinois is if you are a government public employee.  If you are a private citizen not dependent on the govt, you are getting buried.  This is a state that is completely dead. 

Suncake wrote on July 05, 2017 at 10:07 am

Completely wrong...Quinn wanted lame duck session to make 5% income tax permanent, but Madigan refused to call the vote. 5% dropped to 3.75% before Rauner took office, because Madigan didn't want Dems to take the blame for the permanent increase.

Anonymous71 wrote on July 03, 2017 at 9:07 am

JamBam, You are spewing ideology. Be specific. Tell us what should be cut and by how much. The GOP wants to make cuts in principle. However, when it comes to naming which items to cut, they often have a hard time identifying the services to cut. I would also point out that welfare spending, as one example, has been cut in half from about 10B in 2014 to about 5B in 2016. Education has also seen significant cuts in funding. You are screaming for cuts without recognizing the cuts that have already been made. The problem is not spending on services - the problem is the debt. The state is now spending nearly 1/3 of its budget on servicing its debt (https://www.illinoispolicy.org/illinois-204b-debt-crowding-out-payment-f...).  You cannot cut that. Revenues must be increased. 

CommonSenseless wrote on July 03, 2017 at 1:07 pm

How about to start, we cut every program that is not essential in upholding the constitutional mandates of the state.  All pet projects halted, all non-essential construction projects halted, no more honorary road name signs, no more mailed reminders for DL renewal, etc.  Stop everything, including crap legislation that adds costs.  Everything is frozen until the debt is paid down.  If you can do that, I'll support a tax increase so long as every additional tax dollar is spent on paying down the debt...absolutely no expansion in government.  The problem is, next year those worthless politicians will be at the trough again asking for more, more, more.  When will the ignorant masses of Illinois learn the pattern?

Anonymous71 wrote on July 03, 2017 at 5:07 pm

All those items combined would have no effect on the fiscal hole Illinois is in. Nearly one-third of the state revenue is being allocated to serve the debt leaving little for essential services. I hate the tax increase too but I see no alternative. I would prefer a graduated tax and a tax on state pension income. Had the state left the prior tax increase in place when Rauner was elected, the state would be in a better position today. The state was in fact climbing out of debt until Rauner tried to implement his turnaround agenda. Rauner has been a disaster for Illinois. No way will he win re-election. 

CommonSenseless wrote on July 03, 2017 at 6:07 pm

Your attitude about cutting everything non-essential not making a dent is not a good reason to keep throwing the money down the drain.  You notice I said all programs not required by the constitution... Rauner has nothing to do with these problems, the tax was set to expire so it did. A boat that sinks slowly still sinks, might as well expose all the crap now. 

Annotator wrote on July 02, 2017 at 11:07 pm

What will the families with children do when the employers, both large and small businesses, close-up shop after the tax increase takes effect?  All of you don't seriously believe that this won't have repercussions for down state workers.  All of this is a ploy by Madigan to keep Chicago funded and keep himself in power.  Chicago is the most corrupt and wasteful city in the United States, and you down state Republicans that voted for these tax increases just gave away your political futures.  The universities located down state will not see a penny of these taxes.  None of the taxes collected will be spent on construction, social programs, public school education or anything else down state.

Anonymous71 wrote on July 03, 2017 at 9:07 am

Employers will not pack up and leave. That is fake news. Let's contrast two states facing a similar situation yet made opposing decisions: Kansas and Minnesota. One state (Kansas) chose to make steep cuts. The other state (Minnesota) chose to raise taxes. One of those two states is now doing extremely well, the other is struggling. I will let you look up which one it is. A stable state economy with a strong talent pool attracts businesses. It is possible that in imrpved outlook for the state will attract more businesses. As far as I know, Jimmy Johns is still headquartered in the state depsite all of his loud mouthing. I do agree that universites located down state will not see revenue from the tax increase. That is because these revenues will go toward paying the backlog of bills owed to vendors and servicing the crushing state debt. 

JamBam wrote on July 03, 2017 at 11:07 am

http://www.chicagobusiness.com/article/20120927/NEWS0702/120929795/jimmy...

It appears he at least moved his licensing division to Florida the last time the corporate rate was increased.  

In 2010, the corporate tax rate was 3%.  This new tax hike will make it 7%.  Why would any company, who had a choice - want to stay in Illinois?  Is it the great work comp regulations? lol.  Low taxes? lol.  Smart workforce? lol.  Great weather? lol.  Tickets to Illini sports? lol.  

If you more than double the corporate tax rate in less than 8 years, those are going to be long term effects.  Companies don't leave immediate. It's gradual.  But you are making it easier for them to do it.  Indiana is moving their corporate tax rate to 6% in July.  It will be 4.49% in 2022.  Illinois is going to 7.75 permanently.  Why do business in Illinois?  Missouri, Indiana, Kentucky, Michigan are all less. Wisconsin is slightly higher, but also a RTW state after Scott Walker destroyed the unions there.  So they too have a better business climate.

https://taxfoundation.org/state-corporate-income-tax-rates-brackets-2017/

 

http://www.nwitimes.com/business/local/indiana-corporate-tax-rate-falls-...

 

Anonymous71 wrote on July 03, 2017 at 5:07 pm

Jimmy John threatened to leave the state but despite all of his loud mouthing, he never did. His headquarters are still listed as being in Champaign, IL. I do not know why he eneded up staying other than the grass really was not greener on the other side. 

CommonSenseless wrote on July 03, 2017 at 1:07 pm

Minnesota was already doing well.  The Minnesota/Kansas comparison is a red herring as the components of both states GDP are wildly different.  Furthermore, MN cut business tax not raised them.

Anonymous71 wrote on July 03, 2017 at 5:07 pm

The MN business tax rate is 9.8%. Kansas corporate tax rate is 4%. Yet the MN economy is expanding, while the KS economy is contracting. Nice try.

Militia1776 wrote on July 03, 2017 at 7:07 am

The 25,000 strong militia in Illinois will protect the people of Illinois from tyrannical decisions by the corrupt in office who were responsible for this state's circumstances in the first place. If the tax hike is successful all State legislators will be removed from office peacefully or not peacefully based on our constitutional right. The time is now for the people to make a stand and tell the government no longer will we sit back and watch you throw our money away and take away more of our rights and steal more of our money.

Anonymous71 wrote on July 03, 2017 at 9:07 am

The 12.8 million citizens in Illinois will protect the people from threats from domestic terrorists known as militias. Just like the Bundy's, you talk tough but as soon as you are confronted by highly trained law enforcement, you will end up dead or in prison. We the people voted for these representatives. This is the will of the people. You lost. Get over it. If you dont like it, vote them out in the next election cycle.

CommonSenseless wrote on July 03, 2017 at 1:07 pm

The militia idiots not withstanding...what percentage of those 12.8M residents would you say fall on your left side ideologies of tax and spend?  Then take those numbers and compare the numbers that would be more heavily armed.  While not advocating for a coup d'etat at this time, how do you think that would go for you? 

"This is the will of the people. You lost. Get over it. If you dont like it, vote them out in the next election cycle."

Where have I heard this recently...

IndigoB wrote on July 03, 2017 at 7:07 am

According to this piece in USA Today published earlier this year Illinois has the ninth highest taxes in the U.S., not the highest.  That distinction goes to New York. https://www.usatoday.com/story/money/nation-now/2017/04/05/these-states-...

I don't recall that our former personal income tax rate of 5% led to economic disaster.  Meanwhile, Kansas provides one of the latest in a long string of examples illustrating the folly of slashing taxes and vital government services: http://www.chicagotribune.com/news/opinion/zorn/ct-kansas-conservative-b...

It would be great if Illinois legislators would work toward making taxes less regressive, but for now we need a budget that isn't dependent on the governor's "turnaround agenda,"  each item of which deserves careful public debate.

JamBam wrote on July 03, 2017 at 11:07 am

Illinois is the highest when you factor in ALL taxes.  (real estate, sales, income, and etc).

Illinois has the highest property taxes in the entire US.  

https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416/

Also, stop linking opinion pieces from the Tribune as "facts".  Stick to the numbers.

cjw61822@hotmail.com wrote on July 03, 2017 at 8:07 am

With a migration out of state one of the highest in the nation, with Indiana and lower taxes a mear 40 m away, people will turn the land of lincoln into a waste land with nothing but pensioners  ( who do not [ay state taxes and Link card folks,. sticking around)

 

Worried about Rodney Davis or John  Shimkin?  Dont.......... Illinois will lose 2 congressional seats in the next census...............

Anonymous71 wrote on July 03, 2017 at 9:07 am

This is fake news. According to the census, the population of Illinois has remained stable since 2010. There was a small decline (29,000 fewer people in a population of about 13 million). Nobody is racing to Indiana. There are few good jobs in Indiana. Per capita income in Illinois is higher than in Indiana. Going to Indiana will only result in a lower standard of living. Enjoy the move.  

JamBam wrote on July 03, 2017 at 10:07 am

http://www.governing.com/topics/mgmt/gov-states-losing-population-census...

Yeah, you are wrong.  Illinois net migration rate in 2016 was lower than every other state except Alaska.

 

Anonymous71 wrote on July 03, 2017 at 5:07 pm

You stated that I am wrong, yet the article you linked supports my comment: "Illinois lost an estimated 22,194 residents in 2015". That was about the only year in which Illinois experienced a decrease in population, and even then it was about 0.1% of the state population. The population has otherwise remained stable.

Citizen1 wrote on July 03, 2017 at 8:07 am

No change, no reform, just more tax and spend that got us into this mess for the last 30 years.  When you consider property taxes, and all the other numerous taxes on businesses, plus sales taxes, we do have the highest tax burden in the nation.  We get very little in return as most $ money goes to pensions.

Sell the business if it can't be moved, pull up stakes.  Time to leave.

chief21 wrote on July 03, 2017 at 8:07 am


No property tax relief, no pension control, no term limits....just give us some MORE MONEY. State employees rejoice as pensions eat up over 50% of our tax dollars. No wonder the out migration of Illinoians fleeing the state. Now, even higher and higher taxes with no reform......business as usual for Illinois.

Sid Saltfork wrote on July 03, 2017 at 12:07 pm

A couple of would-be thieves want to steal the money paid by the state employees.  The state has not been paying the employer share of the pensions for years.  The money in the pension plans is the money paid into the plans by the state employees.  The state's legislators, and governors used the owed pension money for pork-barrel politics.  That is why there is the hugh pension debt.  The thieves want to erase the debt by discrediting the state employees as the source of the problem.  Several things prevent them from doing so.  One is the state supreme court which has already ruled on the matter.  Two are the bondholders of the state's debt.  Three is the rabid ranting "me, me, me" of the right-wing GOP.  Number four is the ignorance of the want-to-be thieves.

If those who keep ranting on about leaving the state would leave the state, something productive would grow.

lcoil79 wrote on July 03, 2017 at 8:07 am

The real question now, is how do the people of the State of Illinois, go about adding a new amendment or two to the state constitution without lawmaker support.  What we need are Term Limit, and a Balanced Bugdet with Teeth amendments.  No more than 2 terms in office, and if there is no balanced budget in place by July 1 lawmakers lose their pay and benefits for that year, nothing by August 1, all seats are cleared and every seat is up for re-election in November.

The problem is, that the very people that we rely on to make things legally fair in the state, like the inbalance in their favor, so will never pass this for us.

787 wrote on July 03, 2017 at 8:07 am

How many people, in a small suburban Chicago House district, inflict the rest of the state with Mike Madigan... and have stupidly done so for three decades?  

Thanks a lot folks.  

There is hope for this state, after Mike Madigan finally leaves office.   He hasn't destroyed the state yet, but he's still trying to.

lcoil79 wrote on July 03, 2017 at 9:07 am

Part of the problem there is how he handles the primaries.  There have3 been reports of either someone within the clerk's office or people outside the office during registration season looking for anyone filing to run against him.  Anyone that does almost immediately gets another 2-3 "candidates" filed within a few hours to also run.  The tactic used?  The additional candidates all have ethnically silimar or same first and or last names to the real challenger to muddy the voting pool.  

Look at the 2016 election.  Jason Gonzalez went to run against him but waited until 15 min before the close of the last filing day to hand them in.  One of Madigan's goons was there waiting just in case this happened, and after Gonzalez filled, went in and handed in 2 completely filled out candidates, Joe Barboza and Grasiela Rodriguez.  So, if you are the average idito Chicago voter and you see 4 names on the ballot, Madigan, Gonzalez, Barboza, and Rodriguez, who do you vote for?  Even if you don't like Madigan, but you don't want to vote for the wrong "other guy" you go ahead and vote Madigan since you recognize the name.

http://www.chicagotribune.com/ct-michael-madigan-primary-edit-bd-2016011...

Until we get rid of the Chicago Machine scum, nothing is going to change in this state.

yates wrote on July 03, 2017 at 9:07 am

I think it's called putting lipstick on a pig. It looks pretty for a while but none of the underlying problems were addressed so the same ugly smelly creature is still there. But god bless em, the same people responsible for the mess found a way to screw the people who elected them....again.

BruckJr wrote on July 03, 2017 at 11:07 am

Chad Hays - 217-477-0104

Bill Mitchell - 217-876-1968

Reggie Phillips - 217-348-1110

It does no good to complain anomously online.  Give these folks a call.

Anonymous71 wrote on July 03, 2017 at 4:07 pm

Thanks. I called and thanked each of them for putting the state before party and for putting practicality above ideology. 

chief21 wrote on July 06, 2017 at 7:07 am

Moody's issues statement that.."...Illinois is in a deep crisis that the recently passed tax bill will not resolve." No reforms means junk bond status coming....we cant tax ourselves out of this situation.

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