Illinois Senate overrides governor's tax hike veto

[Teh One Who Knocks]

The Associated Press


http://i.imgur.com/zZUghht.jpg

SPRINGFIELD, Ill. – The Illinois Senate voted to override Gov. Bruce Rauner's vetoes of a $36 billion budget package Tuesday, including a $5 billion tax increase designed to start digging out of the nation's longest budget crisis since at least the Great Depression.

The Democratic-controlled chamber completed its work within 30 minutes of the Republican governor's vetoes, sending the package back to the House for an override vote that would give Illinois its first annual budget since 2015.

The House did not plan to take up the action Tuesday.

"The package of legislation fails to address Illinois' fiscal and economic crisis -- and in fact, makes it worse in the long run," the first-term governor wrote after his veto of the tax-increase bill. "It does not balance the budget. It does not make nearly sufficient spending reductions."

Rauner acted about three hours after the Senate voted to hike the personal income tax rate by 32 percent, from 3.75 percent to just under 5 percent. Corporations would pay 7 percent instead of just over 5 percent.

"We are at a moment in time. We are faced today with the fierce urgency of 'now,"' said the tax increase legislation's sponsor, Sen. Toi Hutchinson of Olympia Fields. "We don't have any more time. And too late is not good enough."

The House OK'd the tax increase with 72 votes on Sunday, one more than necessary, with the help of 15 Republicans. Whether they'll continue to defy Rauner remains to be seen. House Speaker Michael Madigan told WICS-TV that there would be no House action Tuesday.

Rauner promised to veto the tax measure because Democrats who control the General Assembly have not agreed to resolve his pet issues, including statewide property tax relief, cost reductions in workers' compensation and benefits for state-employee pensions, and an easier process for dissolving or eliminating local governments.

"It's regrettable that I stand here today not capable of being able to support this package, not because what's in the package is bad, but because it's incomplete," said the Senate's newly minted minority leader, Bill Brady of Bloomington. "We need a comprehensive budget package with reforms."

If Rauner doesn't like the tax plan, the financial world does. On Monday, two of the nation's top credit-ratings agencies signaled it would be a good idea for Rauner to accept the results. Fitch Ratings and S&P Global Ratings, having earlier threatened to move Illinois' creditworthiness into "junk" status without swift action to approve a budget, smiled favorably on the financial outlook.

Democrats and Republicans have negotiated the issues that Rauner considers outstanding in the two weeks since the special session began. But the GOP claims talks broke down over the weekend in advance of Madigan calling the budget votes. Madigan said Monday that those talks were ongoing.

"We'll continue to work with the Republicans on those issues until they're resolved," Madigan said.

[RBP]

Madigan doesn't want to fix it. He is only interested in maintaining the gravy train to his supporters. The state is fucked anyway, might as well hold out to get real reform.

And while we're at it, why did I watch billions of dollars of Indiana fireworks being exploded again last night? Make it legal here. Legalize marijuana and tax it heavily. People and businesses are leaving in droves. Why would you discourage business with a higher tax rate and then put the rest of the burden on workers whose jobs you are putting in jeopardy?

[Teh One Who Knocks]

So, do you think the governor was right to veto the budget?

[RBP]

I'm not that familiar with the ramifications in the credit market, but from a policy standpoint, I think so, yes. They could have done that budget 2 years ago.

On the other hand, the social service agencies are really hurting, so they need to get this fixed one way or another.

[Teh One Who Knocks]

$5 billion tax increase seems pretty steep, where is all this magical new money supposedly going to come from?

[RBP]

Hell, where's all the money they've been collecting and not paying out?

[PorkChopSandwiches]

Raise those taxes and watch the remaining earners leave

[RBP]

Chicago Tribune Editorial Board, July 6, 2017

Finalizing a 32 percent income tax hike, the Illinois House on Thursday approved a budget for the fiscal year that began July 1. Illinois taxpayers will begin paying a 4.95 percent individual income rate, up from 3.75 percent, retroactive to July 1.

What are taxpayers getting for sending another $5 billion to Springfield?

Business as usual.

You might think that Democratic legislators — for 14 years the primary architects of a financial fiasco that has created enormous taxpayer debts — would acquiesce on pro-growth economic reforms that our neighboring states have adopted.

You might think the majority party would listen to large and small business owners about the urgent need for more reasonable workers' compensation insurance costs.

You might think Democrats would have advanced another pension reform bill or created a lower-cost, defined contribution plan for new employees, or attempted to change the Illinois Constitution's crushing pension obligation language.

You might think they would have been alarmed at the exodus of residents escaping to states with lower taxes, far fewer debt obligations and less dysfunction.

You might think Democrats would have agreed to a property tax freeze.

And on every count, you'd be wrong. The budget that Democrats crafted and that more than a dozen Republicans supported includes minor changes to the woefully underfunded pension system and yes, wide-ranging across-the-board spending cuts. It includes $350 million in new education money — provided Gov. Bruce Rauner signs a separate school funding bill that revamps the way the state partially funds K-12 education.

But this budget, like those Democrats advanced for the past two decades, also spends taxpayer money on untested, unproven programs. It includes money for pork projects. It includes money for a clouted downstate shooting complex. It includes money for state fairs, fisheries, diversity programs, agriculture studies, and $330,500 above Rauner's requested amount for Choose Chicago, the city's public-private economic development arm that doesn't make its spending public.

What the budget agreement doesn't do is adopt the sensible, pro-growth reforms Rauner championed as a candidate and during his 2 1/2 years in office. No meaningful workers' comp changes. No property tax freeze. No major downsizing of the state's 7,000 units of government. No votes — that's all Rauner requested — on redistricting reform or term limits to rebuild trust in government.

And while Democratic sponsors said the spending plan should start paying down a backlog of bills and reduce costs in the pension system, rating agencies that monitor state finances weren't convinced. Moody's Investors Service cited the state's crippling debt — again, taxpayers' crippling debt — as reason to potentially drop Illinois' bond rating to junk.

Rep. David McSweeney, R-Barrington Hills, chided his colleagues for assuming the role of rating agency experts. What the bond market looks at, he said, is simple: the ability to pay back the debt. "If we pass this tax increase, Moody's is telling us we're going to junk. They're giving us a road map," he said.

About a dozen Republicans who supported the budget and tax hike assured colleagues these were steps forward but not a finished product. The GOP members seemed certain Democrats eventually would come around on pro-growth changes.

"Are we done? No, we're not done," said Rep. Steven Andersson, R-Geneva. "But we're moving in the right direction. Impasse politics do not work."

We're afraid the joke's probably on Andersson. The Democrats did this week what they did on that notorious night of 1/11/11, except this time with GOP help. They passed a massive tax hike without addressing their addictive spending that is the root of the debt problem, and they did not adopt pro-growth reforms to get Illinois' economy humming.

Taxpayers, we wish we could say the additional income you'll fork over will be the tourniquet that saves Illinois' failing government and flailing economy.

We can't say that. The money, we're afraid, will merely chase debt that, despite this revenue, keeps rising.

A 32 percent tax hike should have been directly linked to a major overhaul of the way Springfield does business. That was the intent of the original Senate negotiations on a grand bargain, which this page supported.

But Rauner, unfortunately, collapsed those talks. Many Democrats saw an escape route and took it. Trust evaporated. True compromise didn't happen. Instead, a tax hike that makes Illinois even more unappealing for employers and other citizens.

Welcome to the new Illinois. Same as the old Illinois. Except 32 percent pricier.

[Teh One Who Knocks]

You should be happy to pay your 'fair share' :tup: