Lawmakers discuss veto override, tax increase
by CYRYL JAKUBOWSKI and AGNES CONNOLLY
Some Northwest Side legislators discussed the end of a historic budget impasse and the Illinois General Assembly’s override of Governor Bruce Rauner’s veto of a budget that features an income tax hike.
The Illinois House voted July 6 to override Rauner’s veto of a budget that increases the state income tax rate from 3.75 percent to 4.95 percent. The corporate income tax rate will increase from 5.25 percent to 7 percent. The Senate had voted to pass its budget proposal and to override the governor’s veto on July 4.
"This was despite of the continual efforts of Gov. Rauner, his cronies and their dark money Super-PACs from trying to derail all progress in the House and Senate to reach agreement," said state Representative Greg Harris (D-13) on his Web site.
"The volume of misinformation and the hateful, often violent messaging has been breathtaking. I cannot express enough thanks to both the Democratic and Republican members of the Senate who took an early lead in moving this forward and to my Democratic and Republican colleagues in the House who put state before politics and party to get the job done."
The budget calls for $36.1 billion in spending. Harris said that the budget cuts more than $3 billion from current spending levels, pays down $8 billion in a backlog of old bills, closes tax loopholes, spends less than the governor’s introduced budget, features $1.4 billion in pension reform savings, provides $350 million more for kindergarten through twelfth grade education, as well as a $50 million increase for early childhood education.
"It is important to see that we need to stabilize the state. The budget helps small businesses and brings a lot of people back to work. This is important for our state universities, public schools and social services offices," Harris said in an interview.
"The governor’s plan has always been to create crisis and force change from that. He has needed to hold everyone in the state hostage to his agenda," Harris said.
State Representative Robert Martwick (D-19) said that increasing the income tax was the lesser of two evils and that it was far better than the alternative of letting the state go longer without a budget and continue to ruin it financially.
"If we didn’t do a tax increase and the state would fall off the cliff, that would only add to the debt that would need to be paid off eventually," Martwick said. "Fiscal insolvency would have been the result. The state of Illinois can’t go bankrupt."
"I think that increasing the income tax is a decision that is the most respectful of tax payers," Martwick said.
Martwick said that he had done the math and offered an example in which an average household would have to pay $400 to $600 a year in taxes. However, he said that this amount pales in comparison to the amount a family would have to pay if they sent their children to college if tuition would be increased without the tax increase.
"I have yet to meet a middle class family that wouldn’t gladly pay an additional $380 (or more) per year in taxes in order to save $67,000 in college tuition costs, ensuring that their children can realize their dream of achieving a college education," he said.
Martwick said that speeding up the state’s recovery means paying debts down sooner, in response to a comment on his Facebook page that the budget was not suitable for recovery.
"I would have preferred that we add an additional .5 percent surcharge that could only be used to pay down debts and would automatically expire when our debt reached a manageable level. But Rauner did not want that. He said that he would only support a tax increase of 4.95 percent because it had to be lower than what Quinn did. Does that sound like a policy decision or a political decision? The worst part is that we gave him the rate that he requested and he still vetoed it and now blames it on us. So, you can believe whatever you like. I’m ok with that. But I’d be happy to hear how I’m wrong on this stuff."
Martwick also said on his Facebook page that people are concerned about what they have to pay in taxes now versus what it would take to pay down higher debt in the future.
"If we hadn’t passed this budget, right now, this state would have fallen off a fiscal cliff that would have been so damaging to this state. It would have taken decades and a much bigger tax increase to get us out of it. Under Rauner we have accumulated $11 billion in unpaid bills and had 8 credit downgrades. So we owe way more and it costs much more in interest," he said.
State Representative John D’Amico (D-15) voted for in favor of the tax increase and override of the veto and said that although no one likes tax hikes, it was critical for the state.
"The tax hike is good for state schools and universities, and it keeps social security offices open. We get to keep about 25,000 people working," he said.
D’Amico emphasized the importance of the budget and the tax increase for the schools of Illinois.
"We cannot let these schools get shut down. It would be devastating for everyone including students, teachers, and everyone who worked there. We really had to consider everything that was on the table and at risk," he said.
"A third year of Governor Rauner’s budget crisis would have been catastrophic for the state," he said in a statement. "If the governor’s veto had stood today, our schools would not have opened in the fall and many of our public colleges would have closed. More social service agencies would have cut staff, cut services and eventually closed. Illinois would have continued spending at an uncontrollable rate, putting taxpayers on the hook for an astronomical $26 billion tax hike a year from now" he said.
"The amount of suffering from the absence of a budget would have intensified, both by affecting the daily lives of more residents and increasing the suffering of those residents already suffering from not having a budget," he said.
State Senator John Mulroe (D-10) said that he voted for the tax increase to end the budget impasse and to set the state on a path toward fiscal stability when the Senate bill was passed.
"I came to Springfield to fight for the future of our state and to stop the financial nose dive it has been taking. The balanced budget I supported includes cuts, funds to pay off our backlog of bills and will support key government functions."
State Representative Michael McAuliffe (R-20) issued the following statement:
"Again, I am saddened by the disregard for the Illinois taxpayer displayed by override vote to institute a permanent income tax hike. I will reiterate that this plan does not include any reform or address the billions in unpaid bills or pension liability," he said. "The credit agencies flat-out stated that this budget does not properly begin to fix Illinois’ negative fiscal climate and the permanent income tax increase only puts a further burden on the taxpayer. We could have done better."
State Senator Heather Steans (D-7) said on her Web site: "I have said all along that resolving the impasse would require a combination of spending cuts and revenue. This bipartisan package includes $2.5 billion in reductions to state agencies and programs and spends $1.2 billion less than the budget the governor introduced in February. In total, our plan spends $36.1 billion and brings in $36.4 billion.
"Importantly, the bipartisan budget includes a revenue plan that will provide our state with long-term stability. Raising revenue is a responsibility we took very seriously. Before considering a tax increase, we attempted to make as many cuts as possible without damaging services and agencies."
In an opinion piece published recently by Crain’s Chicago Business, Rauner wrote "over the past two years we’ve also been seeking common ground on the fiscal and structural changes necessary to restore our state’s fiscal health. This challenge is not just about one year’s budget; it is about reforming our state so that our economy grows faster than our government spending.
"Structural reforms that encourage job growth, provide property tax relief and make government more efficient are essential to our long-term fiscal health. Yet instead of passing a budget with reforms that would move Illinois forward, the legislature collapsed under the pressure of entrenched interests and passed a 32 percent income tax hike," Rauner wrote.