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HomeSpotlight Story | Bird’s Eye View | Budget & Taxes | Politics & Leadership | Governors | Hot Issues | Once Around the Statehouse Lightly
Illinois ended its record-setting budget impasse this month - after going 736 days without a spending plan - with a flourish.
On May 23 the state’s Democrat-led Senate passed a budget package that included SB 9, which among other things, calls for raising the state’s income tax rate for individuals by 1.2 percent (from 3.75 percent to 4.95 percent) and the rate for corporations by 1.75 percent (from 5.25 percent to 7 percent). A handful of Republicans joined Democrats in the House to pass an amended version of the bill on July 2. The following day, in a video message on Facebook, Gov. Bruce Rauner (R) voiced his disapproval of the tax hike and of lawmakers’ refusal to provide property tax relief and other changes he’d requested.
“Illinois families don’t deserve to have more of their hard-earned money taken from them when the legislature has done little to restore confidence in government or grow jobs,” he said.
The following day, the Fourth of July holiday, the Senate concurred on the House amendments to SB 9. Rauner immediately vetoed the bill. And the Senate and House both overrode that veto the same day, the latter chamber with more help from Republicans, drawing praise from House Speaker Michael Madigan (D), who said the budget deal demonstrated what could be done “when legislators on both sides of the aisle looked beyond partisan differences and put the best interest of our state and its residents first.”
“The people in this chamber did not do what was easy today,” he said. “But we did what was right for the future of our state.”
There’s still a lot more for them to do, however. Although the income tax increase is expected to generate $5 billion per year in additional revenue, the state has a backlog of unpaid bills totaling around $15 billion and faces a $130 billion shortfall in its public employee pension systems. The Wall Street bond rating agency S&P Global Ratings has also threatened to lower the state’s credit rating to junk status, which could make it even more difficult for the state to address its fiscal challenges.
“The general public may think ‘Oh, you have a budget, everything should be perfect,’ but it’s far from that,” said state Comptroller Susana Mendoza. “This stops the hemorrhaging, but now it’s an issue of stabilizing.” (CHICAGO TRIBUNE, ILLINOIS POLICY, ASSOCIATED PRESS, POLITICO, LEXISNEXIS STATE NET)