House ends historic budget impasse

House ends historic budget impasse

SPRINGFIELD — Ending a historic 2-year-long budget impasse, the Illinois House on Thursday overrode Gov. Bruce Rauner's veto of three tax and budget bills and enacted a 32 percent increase in the individual income-tax rate, retroactive to July 1.

The Senate already had voted to overturn Rauner's vetoes on Tuesday, Independence Day.

While the budget standoff between the Republican governor and the Democratic Legislature has occupied most of Rauner's term, Thursday's House action came relatively swiftly, despite an ominous "lockdown" of the House chambers just as the debate was set to begin.

The vote to enact the income tax increase, which increases the rate on individuals from 3.75 percent to 4.95 percent and will yield an estimated $5 billion annually, was 71-42. The legislation needed 71 votes to overcome Rauner's veto.

Among area lawmakers, Republicans Chad Hays of Catlin, Reggie Phillips of Charleston and Bill Mitchell of Forysth joined with Urbana Democrat Carol Ammons to approve the tax increase. SB 9 was opposed by Republican Reps. Tom Bennett of Gibson City, Brad Halbrook of Shelbyville and Dan Brady of Bloomington.

Legislation that enacted a $36.1 billion budget (SB6), which supporters insisted is balanced, was approved 74-37. Ammons did not vote on the budget. Hays, Mitchell and Phillips voted for it. Brady, Bennett, Brady and Halbrook opposed it.

On the budget implementation bill (SB42), Mitchell and Hays voted yes; Philips did not vote; and Ammons, Bennett, Brady and Halbrook voted no.

Four House Republicans who originally had voted for the tax increase last week switched to the opposition Thursday, but their places were taken by four Democrats who crossed over after voting no last week. Among them was Rep. Sue Scherer of Decatur, who already has been targeted by the Illinois Republican Party.

The controversial veto-override votes, which all came within a period of about five minutes, capped another unusual day at the Statehouse, including a 90-minute "lockdown" of the Capitol Building and the House chambers after a woman spilled a powdery substance on the second floor that authorities feared was a hazardous chemical. Preliminary tests showed that it wasn't, said a spokesman for Illinois Secretary of State Jesse White.

Soon after the House adjourned, Rauner's office issued a statement decrying the votes and singularly blaming Chicago Democrat Michael Madigan, the longtime leader of the House.

"Today was another step in Illinois' never-ending tragic trail of tax hikes. Speaker Madigan's 32 percent permanent income tax increase will force another tax hike in the near future," Rauner said without an explanation. "His tax-and-spend plan is not balanced, does not cut enough spending or pay down enough debt, and does not help grow jobs or restore confidence in government. It proves how desperately we need real property tax relief and term limits. Now more than ever, the people of Illinois must fight for change that will help us create a brighter future."

But although Rauner had pledged to do "everything possible" to fight the veto override, he did not appear on the House floor to twist arms, and several Republican lawmakers said the governor only left messages on their phones, asking for support.

Supporters of the tax increase said it would help bring financial stability to the state.

"I honestly believe that it is time to right this ship of state," said Rep. David Harris, R-Arlington Heights, "and provide some stability and order to what has been nothing but confusion and chaos. Let's change it."

But opponents said the tax increase will squeeze more Illinois families financially and persuade others to leave the state.

State Rep. Tim Butler, R-Springfield, said Illinois needs "monumental change."

"Ladies and gentlemen, raising taxes of our friends 32 percent without making monumental change to the way our state functions does not solve our problems. It only continues them," he said.

Only two area representatives, Brady and Phillips, spoke in floor debate on the tax increase.

Brady said the budget did not match his priorities of education, public infrastructure and public safety.

Phillips, a businessman from Charleston, said he hoped the recent bipartisan work between Republicans and Democrats would lead to more cooperation to make Illinois more business-friendly.

"If I decide to press my button to override the governor, it doesn't make me any less of a conservative Republican than the rest of the people standing here," Phillips told his colleagues. "It makes a person decide he has to vote for his district. He has to think about all the people in his district to the best of his ability."

Mitchell said the vote for a tax increase was the most difficult he had taken in his 18 years as a legislator.

"Absolutely, just the polarization between the two parties and phone calls and emails to the office," he said. "I don't do Facebook so I don't see all of it."

But, Mitchell added, it had to be done.

"We can't go any longer without a state budget. I keep repeating to people that this is $800 million less than the governor's (proposed) budget. And it's $3 billion less than we're spending now," he said.

The budget is balanced, supporters said, because revenue would exceed spending by $200 million. The surplus, plus another "sweep" of special purpose funds and borrowing would be used to reduce the state's $15 million bill backlog by as much as $8 billion.

And Democrats said they would continue to work with Republicans on non-budget issues such as workers' compensation costs, a property tax freeze and changes to reduce public pension system costs.

Budget highlights

-- Supporters of the $36.1 billion budget plan say it is balanced, with $200 million more in revenue than spending.

-- The existing $15 billion backlog of unpaid state bills could be reduced by as much as $8 billion through use of the budget surplus, another "sweep" of special state funds and borrowing.

-- The budget provides $38.6 million in Education Assistance Fund money for operations of Eastern Illinois University in Charleston. That's a 10 percent cut from FY 2015 appropriations.

-- About $583 million is set aside for the University of Illinois, including appropriations for the UI Hospital, the Prairie Research Institute and a number of other programs.

-- $28 million is reappropriated to complete capital improvements at Lincoln's Challenge Academy in Rantoul.

-- Funding for K-12 schools is to increase, although the exact amount depends on which of two competing education funding reform plans is chosen.

-- State agencies face a 5 percent across-the-board budget cut.

-- Illinois would continue to not tax retirement income and would continue to not levy a sales tax on services.

-- The MAP program, which helps needy college students attend school, receives a 10 percent increase, from $364 million in that last full budget year, FY 2015, to $401.3 million in FY 2018. Democrats said that's the same level of support Gov. Bruce Rauner had proposed in his budget.

Mega Millions sales resume

SPRINGFIELD — Illinois residents can once again purchase Mega Millions lottery tickets without leaving the state.

Hours after the Illinois General Assembly overrode Gov. Bruce Rauner's tax and spending vetoes, Illinois Lottery Acting Director Greg Smith said Mega Millions was back in action.

"The Illinois Lottery is pleased to announce that sales of Mega Millions have resumed," Smith said. "We appreciate the loyalty of our players and retail partners as we continue our mission to fund K-12 education."

Discussions continue on the possibility of resuming Powerball sales.

Both had been put on hold because of the state's budget troubles.

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Question Everything wrote on July 07, 2017 at 7:07 am

So - would it be out of the question for rthe News-Gazette to do some actual journalism instead of just accepting the talking points out of Springfield?  I know your main goal is to appeal to the large number of state employees in the city, but if you were a real newspaper you might ask some questions like: How do you call a budget balanced if it only pays about half of your outstanding bills, and most of that is borrowed (do the math, there is a $200 Million surplus and they say they will reduce bills by $7 million)?  Also, what does this do about the unfunded pension debt (nothing)?  What were the payoffs for the republicans who supported the overriide (we know what the Charleston area reps was - 38.6 million for EIU, he has several businesses in Charleston that profit from the universtity having money)?  Ammons of course got money for the U of I, but she didn't need anything since she will rubber stamp anything Madigan tells her to.  Also - News-Gazette -please explain to us how this is not just another example of kicking the can down the road?  Instead of only looking at what's in it for your readers, how about what's best for everyone in the state?  We need to remember all of these "servants of the people" at election time, all they have done is make a bad problem worse, we will all be dealing with it later unless we leave the state.

guyincognito wrote on July 07, 2017 at 7:07 am

"And Democrats said they would continue to work with Republicans on non-budget issues such as workers' compensation costs, a property tax freeze and changes to reduce public pension system costs."

Let's hope they follow through with negotiations on the non-budget issues, and not just declare victory and walk away.

KrisM wrote on July 07, 2017 at 11:07 am

Unfortunately I don't see this doing much for the State of Illinois as a whole.  The tax burden for people and businesses in the state is not sustainable.  I don't see how the lawmakers in Illinois think this will stop the outflow of people and businesses in the state.  Since Madigan will probably continue to be elected even after he dies, I don't see Illinois making any great changes anytime in the future.  I feel sorry for all the public employees (especially teachers) who will most likely not have their pensions when the state ends up filing bankruptcy.  You can't keep borrowing to pay off your debt and this budget is more of the same.

 

Sid Saltfork wrote on July 07, 2017 at 2:07 pm

Individuals, corporations, and cities can file for bankruptcy.  States cannot file for bankruptcy due to their ability to generate revenue.

Cuts in services: education, safety, assistance to the elderly, child protection, along with a long list of more cuts have already been made.  Cuts, and revenue generation were both necessary for Illinois to get out the financial mess.  Now with both being made, it is essential that pork-barrel spending stops.  Money should be spent only on the essentials.  No money should be spent for beautification, hiking trails, and the various other wants, and whims of the public, and communities.  An ex-Federal prosecuter should be in place to observe the corruption in the legislatures, and governors.  A bipartisan effort should be made to end the Cards vs. Cubs mentallity in Illinois politics.  Everyone moaned, and complained about the elected leaders; but they voted for them based on party instead of issues.  Illinois needs an Independent Party that is focused on the issues, and not the two corrupt traditional parties.

JamBam wrote on July 07, 2017 at 6:07 pm

Puerto Rico just declared bankruptcy last month and is going to reduce pensions on all of their government employees.

https://www.nytimes.com/2017/05/03/business/dealbook/puerto-rico-debt.html

Ron Guenther, (who's has been retired for 7 years), and Lou Henson (who has been retired for over 20) each make over 400,000 a year in PENSION from the state of Illinois. For doing literally NOTHING.  They sure as heck did not pay that much into the system, that rewards them with a top 1% salary in retirement for doing nothing.

This is the reason why Moody's will continue to rate Illinois as junk credit status.  You can't raise taxes enough to pay these retired people. They are getting way more out of the state than they ever put in.   

Sid Saltfork wrote on July 13, 2017 at 3:07 pm

Puerto Rico is a Commonwealth, not a state.  Congress has to decide on Puerto Rico's bankruptcy.  Do you really think that Congress would let the states declare bankruptcy?  The entire country has the same problems as Illinois.  The most common problem is the states not paying their share of the pension payments.  They skipped them for other uses like pork-barrel politics.  The whole country would go bankrupt.  The banking system would collapse.  The idea is a headline only,.

By the way, Puerto Rico voted for statehood also.

Ron Guenther, and Lou Henson are two examples of pension overpayment just like school superintendents, and appointed directors and agency heads.  However, that is a minute figure compared to the many that paid into their pensions for many years with every paycheck while their employer did not. 

Now, you, JamBam, want to continue to attack old people who paid into their earned retirement.  You just don't give up attacking the elderly.  Are you an orphan?  Do you spout your opinions in front of your grandparents, or parents?  Bet you charged grandpa, or dad for doing yard work..........  Chplibast (Russo/American term). 

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