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Gov seeks 33% tax hike for education, billions in spending cuts
3/11/2010 9:18:53 AM
March 11, 2010
BY DAVE McKINNEY AND STEVE CONTORNO Sun-Times Springfield Bureau
SPRINGFIELD -- Uncorking a risky election-year gambit, Gov. Quinn on Wednesday proposed a 33 percent increase in the state income tax to avoid "sacrificing the future of a generation of children."
Quinn's push to hike the tax on Illinois workers' paychecks from 3 percent to 4 percent came with a promise to devote all of the $2.8 billion in new annual revenues to education, staving off the $1.3 billion in cuts the governor aimed at the state's schoolchildren and university students if the tax hike doesn't materialize.
"I believe this 1 percent for education makes sense, and I think the people of Illinois will understand," the governor said during a 20-minute budget address to both chambers of the General Assembly.
The tax hike would deal with only a portion of the historic $13 billion budget deficit that has made Illinois one of the least-solvent states.
In laying out a proposed $55.1 billion budget for the fiscal year that starts July 1, Quinn proposed $2.2 billion in program cuts, $4.7 billion in borrowing and more than $6 billion in unpaid bills being pushed off into the following year.
Pushing the increase at the same time he is running for governor effectively makes the tax hike the defining issue in his campaign against Republican gubernatorial nominee Bill Brady, a state senator from Bloomington who blasted Quinn's tax hike and called his borrowing plan "a catastrophe."
"I don't think it's going to work to bring private-sector jobs to increase taxes on families 33 percent," Brady said. "It's not going to work to bring business investment back to this state in jobs when you send a message that we're not going to solve our fiscal crisis, we're going to try to borrow our way out of it."
The tax hike Quinn proposed represents a scaling back of what he pushed last year, shortly after taking over for impeached ex-Gov. Rod Blagojevich. Quinn talked then about boosting the income tax by 50 percent, raising the rate on individuals from 3 percent to 4.5 percent.
Since that plan failed miserably in the Democratic-led House, the governor didn't have to explain why he now favors a smaller increase, even though its prospects appear iffy, at best.
House Speaker Michael Madigan, who has repeatedly condemned Republicans for refusing to put votes behind an income-tax hike, praised Quinn's courage in pushing the new plan. But the speaker actually made a compelling case against it during a televised interview after the governor's speech.
"Let's be straightforward about this. The people of Illinois, they don't want tax increases. They're hurting. The American economy is in bad shape. People are out of work. They don't want to hear about tax increases," Madigan said.
"You should admire the governor for standing up in these times and say, 'Look if we wish to maintain the fiscal integrity of this state, then we ought to do this tax increase.' That doesn't mean it's going to happen," Madigan said.
Madigan's GOP counterpart, House Minority Leader Tom Cross of Oswego, said his 48-member caucus has no interest in signing on to a tax hike without first gaining commitments to cut spending, reform pensions and Medicaid and make business-friendly changes to the state's workers compensation laws.
"Today is a political ploy to try to scare the General Assembly into supporting a tax increase," Cross said.
For his part, Quinn did deliver promises of major spending cuts, offering up painful spending reductions to programs for the developmentally disabled, military families and subsidized child-care services for the working poor.
Quinn also took aim at the State Police, cutting $25 million in personnel costs that would result in the loss of 500 positions in the law-enforcement agency.
All told, the governor put the total amount of cuts at $2.2 billion, though that publicly stated number differed from $2.7 billion in cuts outlined on a special Web site the governor launched two weeks ago to gather public input on the state's spending priorities. Quinn's budget office vowed late Wednesday to reconcile the two spending-reduction totals.
"I have made some difficult, painful choices in this budget," Quinn said earlier. "You must make tough choices as well. Either by approving a plan for new revenue for education or by passing a budget that will starve public education at every level in every community in the state of Illinois and force property taxes even higher.
"We have a tough fight ahead of us, but I believe we can get through this difficult year together," the governor said.
