Governor Rauner wants to veto approved income tax increase

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Updated: 11:30 p.m., July 2, 2017

UPDATE: SPRINGFIELD, Ill. (AP) -- The Illinois House has approved an income tax increase as part of a plan to end the nation's longest budget standoff, but Governor Rauner says he will veto the increase.

The House voted 72-45 Sunday night on a 32 percent increase on the personal income tax rate. It's designed to start repairing the fiscal disaster caused by the nation's longest budget stalemate since the Great Depression.

Rauner issued a statement that said, "This vote shows that if the legislature is willing to pass the largest tax hike in history and continue out of balance budgets with no real reform, then we must engage citizens, and redouble our efforts to change the state."

The Governor insists on business-friendly changes and a statewide property tax freeze in return for agreement on a budget. The tax increase goes back to the Senate for concurrence. The House followed the tax bill with approval of an annual spending plan. The vote was 81-34 for a budget that spends about $36 billion. Democrats point out that it's about $800 million less than what Rauner proposed last winter.

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Posted: 8:15 p.m., July 2, 2017

UPDATE: SPRINGFIELD, Ill. (AP) -- The Illinois House has approved an income tax increase as part of a plan to end the nation's longest budget standoff.

The House voted 72-45 Sunday on a 32 percent increase in the personal income tax rate. It would go from 3.75 percent to just under 5 percent. It passed with one more vote than necessary to take effect immediately.

Democratic Rep. Greg Harris of Chicago sponsored the measure. He says the increase is necessary to avoid financial catastrophe. Bond-rating houses have threatened to downgrade Illinois' creditworthiness to "junk" status without action.

More than a dozen Republicans voted for the measure. But some argued that lawmakers need more financial restraint.

The House is now debating a spending plan of about $36 billion.

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Posted: 6:00 p.m., July 2, 2017

UPDATE: SPRINGFIELD, Ill. (AP) -- The Illinois House has begun debating a $5 billion income tax increase to help end a two-year budget stalemate.

Democratic Rep. Greg Harris of Chicago is the sponsor of the measure presented Sunday. The plan would increase the personal income tax rate by 32 percent. It would go from 3.75 percent to 4.95 percent. The corporate rate would increase from 5.25 percent to 7 percent.

An expansion of the sales tax on services suggested by a Senate measure has been scuttled.

Sunday marks the second day of the new fiscal year. It's the third in a row the state has begun without a state budget.

The annual deficit has grown to $6 billion with a $15 billion pile of overdue bills. Credit rating agencies have threatened to downgrade the state's creditworthiness to "junk" status.

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Posted: 2:20 a.m., July 2, 2017

SPRINGFIELD, Ill. (AP) -- After negotiating Saturday, the House has decided to vote on Sunday on a revenue plan after all. Speaker Michael Madigan issued a statement saying he was, "encouraged by the progress we continue to make." He said there would be a vote on the House floor Sunday on a plan, "modeled on the bill supported" by Governor Bruce Rauner.

Earlier Saturday morning, Madigan provoked Republicans when he announced that there would be no votes on a deal to end a two-year stalemate this weekend. Republicans stood and chanted in objection. One GOP member shouted, "speaker junk" as Madigan left the floor. That's a reference to the promised downgrade of Illinois creditworthiness by bond houses of there's no budget deal. Madigan wrote the major agencies Friday asking for more time to seal a deal. A $36.5 billion plan to rebuild Illinois’ crumbling finances passed a critical test on Friday, but a final deal hasn't been reached. Without a budget, the State Comptroller will be unable to cover basic services ordered by courts and road construction, plus Powerball ticket sales could halt.