After 2 years, Illinois has a budget—and higher income taxes

Jul 06, 2017

The Illinois House on Thursday managed to scrape together the necessary amount of votes to override Gov. Bruce Rauner’s veto of the budget package that increases the individual income tax rate by 32 percent, giving Illinois its first full-year budget since July 1, 2015.

In a 71-42 roll call, the House narrowly overrode the governor’s veto of Senate Bill 9, the revenue portion of the budget package that contains $5 billion in tax hikes to help prop up the cash-strapped state. The individual income tax rate will rise from 3.75 percent to 4.95 percent, while the corporate income tax rate will increase to 7 percent from 5.25 percent.

The House also overrode Rauner’s vetoes of SB 6, the $36 billion spending bill as well as legislation that gives the state the authority to implement the budget, or BIMP.

Thursday’s vote was delayed by about two hours after a woman threw an unknown white powder in the governor’s office, prompting a lockdown of the Capitol as hazmat crews worked to determine whether the substance posed a danger.

Following the successful override, Rauner said in a statement how it’s more important than ever before for Illinoisans to “fight for change” that will lead to “a brighter future.”

“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. “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.”

Ten Republicans joined Democrats in voting for the tax hike, including state Rep. Steve Andersson, R-Geneva, who has been the target of death threats and hate mail since he originally voted for the revenue measure on Sunday.

Speaking on the House floor, Andersson, whose private cell phone number was divulged to the public, said the unrelenting vitriol was nothing compared to the pain public universities, social service providers and the state’s most vulnerable have gone through during the historic, two-year budget impasse.

“If I have to take a couple days of that, I will be happy to do so because I’m think about those people,” he said. “They have been suffering far longer and far worse than I ever have.”

The Chicago Sun-Times reports: 

There were some flip floppers, with 11 of 15 House Republicans voting for the override. Republicans who switched from a yes vote on Sunday to a no were Reps. John Cavaletto, R-Salem; C.D. Davidsmeyer, R-Jacksonville; Charlie Meier, R-Okawville; and David Reis, R-Sainte Marie. Rep. Robert Pritchard, R-Hinckley, voted to approve the measure on Sunday, but was absent for the override.

The switches were offset by three Democrats who changed their votes. Reps. Sue Scherer of Scherer, Rita Mayfield of Waukegan and Natalie Manley of Joliet all voted no on Sunday but yes for the override.

Other House Republicans who spoke before the vote warned the budget package will do little to change the long-term hardships facing Illinois because it lacks key structural reforms and fails to address the hundreds of billions of dollars in unfunded pension liabilities, some of the highest property taxes in the nation and the $14.7 billion unpaid bill backlog.

“Is this the best that we can achieve? Is this the best we can deliver? Is this the best we can accomplish for the some 13 million residents of the state of Illinois?” said House Republican Leader Jim Durkin of Western Springs.

Durkin added that regardless of the outcome, the General Assembly’s work is not done and stressed the importance of enacting such reforms in the months and years ahead.

State Rep. Keith Wheeler, R-Oswego, said the “watered down” reforms in the budget package won’t cut it and blasted them as nothing more than “lipstick reforms.”

More reactions to Thursday’s total override of Rauner’s budget veto:

House Speaker Michael Madigan: 

“Today, Republicans and Democrats stood together to enact a bipartisan, balanced budget and end a destructive 736 day impasse.

“Our budget agreement was made possible by legislators on both sides of the aisle who looked beyond partisan differences and put the best interests of our state and its residents first.

The people in this chamber did not do what was easy today, but we did what was right for the future of out state. There are a lot of things that will be said about this vote, but the most important thing I can point to is that Republican legislators and Democratic legislators got this done together.”

State Sen. Andy Manar, D-Bunker Hill: 

“This balanced budget reflects two realities we face in Springfield: the fiscal reality of a state mired in debt and teetering on the brink of collapse after two years without a financial plan, and the political reality of what lawmakers were able to negotiate and pass.

“It’s not perfect, and we have more work to do. That includes negotiating additional reforms to save money for taxpayers.

“It will be decades before we recover from this administration’s expensive and self-destructive experiment of allowing the state to go two years without a budget. This failure should serve as warning to other leaders across the country who ever have contemplated doing the same.”

Democratic gubernatorial candidate JB Pritzker: 

“Bruce Rauner manufactured a 736-day crisis to force his special interest agenda on our state. Today, Democratic and Republican members of the state legislature came together to say enough is enough, but Bruce Rauner’s damage is already done,” he said. “Rauner led the state to $14.7 billion in unpaid bills, interest on state debt continues to skyrocket, and local governments across the state have been forced to raise taxes to compensate for a lack of state funds. Social services agencies closed, impacting countless families across Illinois, students fled to go to college in other states, and we lost opportunities for job creation. The suffering of Illinois families can’t just be erased. It will take years to clean up the mess of this failed governor’s creating and it’s clear that getting our state back on track can only happen with a new governor next November.”

Tim Schneider, chairman of the Illinois Republican Party: 

“I am deeply disappointed in the Illinois General Assembly’s vote to override the Governor’s veto of Speaker Mike Madigan’s permanent 32% tax hike. Passing a 32% tax increase on the hard-working families of Illinois without any semblance of reform is absolute insanity. It hasn’t worked before, and it won’t work now.
“I am extremely troubled by the decision of 10 Republicans to again stand with Mike Madigan. Republicans in Illinois fought Madigan’s machine in 2014 to elect Gov. Rauner and won. In 2016 we beat Madigan again and made historic gains in the House and the Senate. After all we have accomplished together, it is astonishing that these legislators would now turn their backs on taxpayers across the state. I am confident voters will hold those politicians accountable for choosing Mike Madigan over the people of Illinois.”

Doug House, president of the Illinois Democratic County Chairmen’s Association: 

“Governor Rauner wanted a crisis to enact his radical agenda and Illinois has suffered because of it. I applaud legislatures from both Parties for standing up to Rauner to begin to repair the damage to Illinois that he has done.

“I have hope for our state that, despite the failed leadership of Bruce Rauner, that we can come together to do what is right. We have a long road to fix the problems that Bruce Rauner has created but I truly believe we can get there.”

Todd Maisch, president and CEO of the Illinois Chamber of Commerce: 

“Passing a budget that raises taxes on our job creators without enacting necessary pro-growth reforms to help cultivate Illinois’ business climate only works against solving the state’s current economic crisis.

“Illinois is in dire need of policies and reforms that would fix the state’s fragmented system. And a clear plan to reduce Illinois’ massive backlog of bills is necessary.

“We continue to urge lawmakers to work in a bipartisan fashion on pro-growth reforms that would promote economic development – now and in the long run.”

Democratic gubernatorial candidate and state Sen. Daniel Biss of Evanston: 

“I’m glad that because rank and file legislators on both sides of the aisle followed their consciences instead of their leaders, we avoided the catastrophe of yet another year without a budget. Now it’s time to solve our long term problems. We need to build on this collaboration and come together to create real progress by making the rich pay their fair share to fund our schools, protect people’s health care, and get our economy moving.”

Democratic gubernatorial candidate Ameya Pawar: 

“Republicans and Democrats in both houses came together this week to pass a responsible budget that protects middle-class families and finally puts Illinois on a steady fiscal path. While Bruce Rauner’s reckless veto made clear he doesn’t care about the future of our state, today’s bi-partisan veto-override proves there are legislators still willing to put Illinois’ hard-working families over reckless partisan politics.

“This episode is just another reminder that when we elect people like Bruce Rauner, who hate the institutions they seek to represent, they will try to destroy it once in office. That’s what Donald Trump is doing in Washington, D.C. and it’s what Bruce Rauner is doing in Springfield. We need to stop electing people who hate government more than they love their city, their state and their country.”

Democratic gubernatorial candidate Chris Kennedy: 

“Illinois finally got the balanced budget it needed. Our state had little choice but to carry through with the budget agreement finalized today,” said Kennedy. “It came to us at the 11th hour after the Governor stood on the sidelines for years, shifting the goal post whenever we came close. Now we’ve raised taxes that impact the poor and middle-class without asking more of the wealthy. Rating agencies are still hesitant about our financial health, and our political leaders have done little to restore voters’ faith in our state government. Other states don’t need to threaten the future of their institutions in order to create a balanced budget. It doesn’t have to be this way. We can have a balanced budget. We can honor the contracts of our pensions and we can invest in our economy and see it grow. But, we need to give our state a budget and a government that’s free of corruption, that’s free of self-dealing, that’s free of self-interest. If we do that we can turn this state around,” added Kennedy.

State Rep. David Olsen, R-Downers Grove: 

“I’m disappointed that rather than seeking a broad, bipartisan consensus on a balanced budget with reforms, Speaker Madigan and the majority Democrats chose to walk away from productive negotiations with Republicans which were nearing agreement late last week. Instead, they decided to put forward a large tax increase and spending plan without addressing reforms Illinois desperately needs to make our State more attractive for individuals and businesses alike.

“The vast majority of Republicans and Democrats have recognized that our State needs the stability of a balanced budget with reforms – which must include significant structural reforms, spending cuts, and revenue. Unfortunately, I do not believe that the package approved today achieves that stability. Illinois already has the worst credit rating of any State in the nation, yet Moody’s Investor Service said yesterday even this plan may not prevent a downgrade to junk status. Despite this setback I remain committed to working in a bipartisan fashion towards the much needed reforms that will turn the tide and restore confidence in Illinois, both with investors and more importantly in the communities of the 81st district.”

Illinois Comptroller Susana Mendoza: 

U.S. Sen. Dick Durbin, D-Ill.: 
“Illinois was in a self-imposed, devastating recession due to the three year budget stalemate in Springfield, hurting our children, seniors, and working families. This veto override is the first step that Illinois’ leaders needed to take in order to get our state back on track. Thankfully now schools will be able to open in the fall, major transportation infrastructure projects will continue on schedule, seniors will receive their life-saving services, and universities will continue their research. We need to come together on a bipartisan basis to heal the damage that has been done by this budget crisis.”
Related: Devil’s Advocate: Rauner scored big on Election Day. Or did he?
Nov 09, 2016

I speak with some authority when I say that the folks over at Moody’s Investors Service can be crafty devils. No sooner had 3.7 million of you voted to protect…

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