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Senate approves tax hike - Passes pension bond - Quinn talks to press

Wednesday, Jan 12, 2011

* 1:20 am - The Senate passed the tax increase bill with 30 votes.

During his closing remarks, Senate President John Cullerton promised the Republicans that he would close any loophole in the expenditure cap that they might find. Republicans had suggested the bill would allow the governor to skip pension payments. Democrats countered with intent language that declared this was not the case.

* 1:25 am - The Senate passed the pension bond biill with 42 votes. Republicans had vowed to oppose the bill. They apparently changed their minds.

* 1:48 am - Gov. Pat Quinn has not talked to the Statehouse press corps since the passage of the civil unions bill. But we caught up to him behind the Senate chambers after his visit with Democrats who voted for the tax hike bill. Nobody thought to hold an elevator for him, so there was a welcomed delay for us as we tried to get him to answer questions. He didn’t say a whole lot, promising to talk to us tomorrow. Notice the last little bit in the video. I couldn’t resist

* Roundup…

* Daily Herald: “When would we run out of money?” Rep. Linda Chapa LaVia, an Aurora Democrat, asked during a hearing Tuesday. “Some would argue we already have run out of money,” replied David Vaught, Quinn’s budget director.

* Tribune: With no votes to spare and no Republicans on board, the House approved the plan to hike the personal income tax-rate by 67 percent and the business income tax by 46 percent. The plan nearly faltered in the Senate hours later when black lawmakers balked at the House’s decision to remove a property-tax relief component from the plan and failure to approve a cigarette tax hike for schools. But after a late evening closed-door meeting of several black lawmakers with Gov. Pat Quinn, a fellow Democrat, an agreement was reached and the Senate approved the tax increase plan 30-29 without a vote to spare shortly before 1:30 a.m. The action came as a new General Assembly was to be sworn in midday Wednesday, replacing a handful of departing Democratic lawmakers whose support was counted on for the tax plan.

* Sun-Times: The House twice voted down a bid to borrow $8.75 billion to pay unpaid bills owed by the state and rejected a $1.01-a-pack hike in the state cigarette tax that would have pumped $375 million into cash-strapped school districts. Other things thrown on the legislative scrap heap included a $1 billion-a-year plan to open a Chicago casino and four others and a proposal to overhaul the state’s worker’s compensation laws that was bitterly opposed by labor unions.

* SJ-R: Cross was also said the notion the tax would be temporary is “clearly false.”

* ISN: GOP leaders also point out that the 2-percent cap builds upon itself. Even with the spending cap Illinois government will grow nearly 17 percent in four years, they said. Quinn budget director, David Vaught, said the administration needs some room for the spending caps. He expects Illinois to have to pay its multi-billion dollar pension payments and cover the rising cost of Medicaid in the future. “Just those two forms of increased spending, that are very difficult to control, will eat up this spending cap change. Everything else will have to be flat or decline,” Vaught said.

* AP: The increase means an Illinois resident who now owes $1,000 in state income taxes will pay $1,666 at the new rate. After four years, the rate drops to 4 percent and that same taxpayer will then owe $1,333.

- Posted by Rich Miller        


46 Comments
  1. - Jo - Wednesday, Jan 12, 11 @ 1:27 am:

    They also just passed the pension borrowing for this fiscal year with 42 votes.

    What a difference 8 months makes.


  2. - Jo - Wednesday, Jan 12, 11 @ 1:32 am:

    “They apparently changed their minds.”

    Including Radogno.


  3. - Grandson of Man - Wednesday, Jan 12, 11 @ 1:41 am:

    This is pure drama. I bought into the late polls and believed Quinn was dead and buried in the election. He squeaked by, and so did this bill. Unbelievable.

    Rush Limbaugh says don’t negotiate with liberals, defeat them. Two can play at that game.


  4. - Juice - Wednesday, Jan 12, 11 @ 1:47 am:

    If the Republicans vowed to oppose, they did a pretty bad job since Leader Radogno voted “yes.”


  5. - Bill - Wednesday, Jan 12, 11 @ 2:16 am:

    It is a great day (night?) for the State of Illinois.


  6. - Quinn T. Sential - Wednesday, Jan 12, 11 @ 2:24 am:

    Prayers for Rep. Miller. I am quite certain that is not they way he would like to have gone out of the capitol on his last night.


  7. - Been There - Wednesday, Jan 12, 11 @ 3:05 am:

    ===It is a great day (night?) for the State of Illinois.===
    While I agree we needed the tax deal, it was not a great night for Illinois. Whatever you thought of the gaming bill, the stink that surrounded Lang deciding not to call the bill at the absolute last minute has to go down as one of the biggest slaps in the face to all involved with the bill, especially the many, many people involved in the horseracing industry. The biggest slap was to all the House members who thought they would have the opportunity to help out the horsemen, breeders, tracks, towns and others who thought the bill would be called for an up or down vote. While there are many needy issues out there that need help, the unbelievable deceict on this bill will be legendary.


  8. - DuPage Dave - Wednesday, Jan 12, 11 @ 5:43 am:

    It’s nice to know our elected representatives are working hard while we sleep. I wake up to find out that they have done pretty much what they needed to do and the State of Illinois is in better shape than it was yesterday.

    That being said, lotsa luck with putting the FY12 budget together, guys and gals.


  9. - Anonymous - Wednesday, Jan 12, 11 @ 6:35 am:

    Let’s see if the taxpayers friend, friend of the little guy, reformer Governor Pat Quinn, will now keep his campaign promises and veto any personal income tax in excess of percentage point hike. Let’s see if Governor Pat Quinn still supports the Death Penalty, as he did during the campaign, by using his veto.

    Your little video of Governor mealy mouth is telling.

    I can recall the late Senator Adeline Geo-Karis telling me how cunning and cynical Quinn was and that he was just a pretend reformer. Geo has been proven right now.

    Not a single legislator in my area campaigned on a promise to increase personal income taxes by 67%. Not a single one of them promised to end the Death Penalty. Not a single one of them promised to vote for gay couples or even gay civil marriages. Not a single one of them approved of early release of certain convicted criminals. Every single one of them promised to “cut” expenditures.

    Profiles in Lame Duck Courage? Hardly.

    I’m sure they expect to face angry voters back in their districts. But they cynically know that voter anger will abate in two years and they will protect themselves in a new remap.

    Some can say they did “the right thing.” What they really did was lie to Illinois voters.

    Be proud!


  10. - Louis G. Atsaves - Wednesday, Jan 12, 11 @ 6:36 am:

    Sorry. Anon 6:35 is me.


  11. - wordslinger - Wednesday, Jan 12, 11 @ 6:55 am:

    Lotta heavy lifting the past couple of weeks. There will be plenty of time this spring to go over the budget this spring with a fine-tooth comb and make cuts large and small.

    I hope folks on both sides of the aisle do so in good faith. The fire’s out; now you can start the cleanup and rebuilding, if you’re so inclined.


  12. - Griz - Wednesday, Jan 12, 11 @ 7:02 am:

    Like thieves in the night they just crept in and stole out of your wallet. No cuts at the top, No reductions in state government, No reductions in benefits for legislators. No plan for the future and our children. This is a sad day for the State of Illinois and open government. When people and industry start leaving and quit buying we’ll see how much new revenue is generated.


  13. - vole - Wednesday, Jan 12, 11 @ 7:11 am:

    The Illinois state legislature could be called the 1 percenters. I ain’t keeping a record, but they seem to have passed their most significant legislation in about 3 days total.

    And the meaning of “caps” is? Judging from their past words and deeds, I won’t be too surprised by how the legislature and Quinn interprets it.

    Lastly, do any of us believe that the tax rates will fall back after 2015?


  14. - Anonymouse - Wednesday, Jan 12, 11 @ 7:12 am:

    Words, you’re seriously delusional.

    They’ve done NOTHING to address structural problems. Nothing.

    All they’ve done is to reach into our pockets for more ‘play’ money.

    And the upshot of that is folks getting more creative in avoiding the tax or leaving entirely.

    Chase away productive citizens, you’ve got a net loss, here. Encourage folks to shelter more of their $$, you’ve got another net loss.

    But that’s okay. As Pat said last night: It’s for The Children.


  15. - Bill - Wednesday, Jan 12, 11 @ 7:25 am:

    Yes, the structural deficit has been addressed. The additional $6 billion in revenue each year along with the 3.1 billion already cut from the budget and significant medicaid reform will allow the state to bond out its past due debt. That 8-10 billion will significantly spur the fledgling economic recovery that has already started in Illinois. The caps will prevent any massive increases in spending.
    Further painful cuts may be necessary but we are on the road back.
    Congratulations to all who stood up and saved our state.
    This upcoming session should really be fun.


  16. - wordslinger - Wednesday, Jan 12, 11 @ 7:37 am:

    –Words, you’re seriously delusional. –

    It would have been swell to have an alternative proposal that did some heavy-lifting. Did the dog eat the GOP homework?


  17. - steve schnorf - Wednesday, Jan 12, 11 @ 8:08 am:

    On the whole I think this is pretty significant. There is now new revenue, and spending, not approp, growth is limited to 1.9% for the next 4 years.

    Pension payments and Medicaid will more than eat up that 1.9% for 4 years, so we should end up with 0 or negative growth in other programs. Couple that with some natural revenue growth, and by the end of 4 years our payment cycle should be current and we should be making pension payments out of base revenues.

    That would be a whale of an accomplishment. Good luck to the Gov and the GA. It will take self-discipline to actually make it happen.

    BTW, don’t bother to argue with me with your forecasts of the future. As I’ve said so many times, we don’t have to argue about what the future holds, all we have to do is wait and see, and there will still be elections every 2 years.


  18. - Don't Worry, Be Happy - Wednesday, Jan 12, 11 @ 8:17 am:

    When Quinn said he’ll talk about it tomorrow, did he mean today-tomorrow or tomorrow-tomorrow? Hard to say since tomorrow was already today at that point.

    Rich - good one at the end!


  19. - FDR! - Wednesday, Jan 12, 11 @ 8:22 am:

    The structual budget deficit is closed. Legislation is rarely perfect. You hear all the reporters saying “what about”. What about fact that Illinois will now pay it’s bills, colleges & universities will not be set on a course of de facto privatization, and we won’t face another wave of public sector layoffs? I’m hear to say “good job”. This will help, not hurt Illinois’ economy.


  20. - Anonymouse - Wednesday, Jan 12, 11 @ 8:28 am:

    Sorry, boys. Not believing the ‘rosy scenario’ numbers. This does NOTHING to address the real problems in this state. It’s like putting a band-aid on a severed jugular vein. You’ll be back here in a year or two, same troubles multiplied.
    But hey..it’s ‘for the children’, so it’s all good, no? IL version of the rosary. Say it over and over again. Makes you feel better, but does squat, really.


  21. - Dan - Wednesday, Jan 12, 11 @ 8:31 am:

    With this increase what about discounts for instate Colleges?


  22. - DH - Wednesday, Jan 12, 11 @ 8:40 am:

    The Corporate tax hike is more critical to this then anything and is going to hurt the state. The neighboring states are the ones going to benefit from this. Wisconsin is already talking about lowering their Corporate Tax Rate to get businesses to relocate. For some businesses why not open that new corporate office in Wisconsin and leave manufacturing in Illinois.


  23. - Honest Abe - Wednesday, Jan 12, 11 @ 8:58 am:

    He’s back!

    The impeached former governor, Rod Blagojevich, appeared on WLS Radio 890 AM within the past half hour and blasted Quinn. He reminded the radio hosts (Don Wade and Roma) that he predicted that Cullerton, Madigan and Quinn that would move to approve a tax increase immediately after he was ousted.

    I am not a fan or apologist for Blagojevich, I always voted against him, but he nailed these hypocrites today. It takes one to know one, I suppose.


  24. - One of the 35 - Wednesday, Jan 12, 11 @ 9:23 am:

    DH hit the nail on the head. What will these increased tax rates do to our ability to attract and retain businesses? Our future economic base and revenue stream will be impacted. Mr. Schnorf admonishes us against arguing about forecasts of the future, but I believe it is prudent to consider the impact that our actions may have on future revenues.


  25. - steve schnorf - Wednesday, Jan 12, 11 @ 9:29 am:

    1/35 I only admonish once the decision has been made. Of course we should try to assess effects on the future when making decisions. But once we make them there’s no sense arguing about what is going to happen next; we will see, in real time.


  26. - Jo - Wednesday, Jan 12, 11 @ 9:36 am:

    It is pretty simple - 4% is the tax rate we need to be at in the long term. 3% is the reason we are in this mess.

    And the rate being at 5% for the next 4 years will allow us to pay down the bills.


  27. - Bill - Wednesday, Jan 12, 11 @ 9:54 am:

    ==For some businesses why not open that new corporate office in Wisconsin and leave manufacturing in Illinois. ==
    Because the taxes would be a lot higher for all of that management plus they would have to live in Wisconsin. Somehow I don’t see a mass migration of the bosses to the hinterland.


  28. - RetiredStateEmployee - Wednesday, Jan 12, 11 @ 9:59 am:

    ==The impeached former governor, Rod Blagojevich, appeared on WLS Radio 890 AM within the past half hour and blasted Quinn. He reminded the radio hosts (Don Wade and Roma) that he predicted that Cullerton, Madigan and Quinn that would move to approve a tax increase immediately after he was ousted. ==

    By spending more than the state was taking in, he had to know that eventually some one was going to have to bite the bullet and raise taxes. The hypocrite here is Rod, creating a situation for some one else to repair. One can only hope that there will be balanced budgets in the future — no guarantees there.


  29. - Liandro - Wednesday, Jan 12, 11 @ 10:00 am:

    Government has gotten bigger and bigger. That has bled into the corruption, corporate (and union) welfare, and government dependency that is like a cancer across our state.

    We used to have a few options. We could cut back and focus on empowering private individuals and organizations. We could raise our taxes and pay for the expansion (while putting some choking affect on growth). We could (and did) borrow and punt the issues down the road. Well, we slowly ran out of options.

    Anyone who claims all these things were some sort of lame duck “courage” is full of it. This was cowardice and desperation. Our “leaders” were never willing to say “no” to spending and the power it brings, so they took from the easiest cookie jar. Even then it was only then after they survived the biggest Republican wave of our lifetimes. Of course they think they will never pay a price for their incompetence…they’ve never been rebuked. Illinois government flat-out spends far more then it needs to, and apparently voters (and non-voters!) are the enablers.


  30. - cover - Wednesday, Jan 12, 11 @ 10:15 am:

    Honest Abe @ 8:58 am, what would Blago have done to get us out of this mess? Propose another gross receipts tax? Let us default on our bond obligations?

    There simply were no good options to fix the budget mess, the menu ranged from awful to horrific to incomprehensible. Quinn and the GA can point to last year’s pension reforms and this year’s Medicaid reforms as evidence that they are actively working to hold the line on spending, those are 2 of the 3 largest items in the budget.


  31. - GA Watcher - Wednesday, Jan 12, 11 @ 10:16 am:

    Questions for Steve Schnorf if he’s keeping an eye on this string: How does the GA get away with setting the corporate rate at 7 percent? Isn’t there a required ratio that the corporate tax rate be 8/5ths of the personal income tax rate?


  32. - Chicago Cynic - Wednesday, Jan 12, 11 @ 10:17 am:

    “it used to be you couldn’t get between Pat Quinn and a camera.” - Rich

    Very very funny stuff.


  33. - 47th Ward - Wednesday, Jan 12, 11 @ 10:38 am:

    ===Isn’t there a required ratio that the corporate tax rate be 8/5ths of the personal income tax rate?===

    No. The they are tied together with 8/5ths being the maximum difference between the two. In other words, you can’t hike the corporate rate any higher than the capped ratio to personal. But that doesn’t require Illinois to bring the corporate rate to the ratio’s ceiling.

    Does that make sense?


  34. - dupage dan - Wednesday, Jan 12, 11 @ 10:43 am:

    We all knew that the reality of this situation was that Illinois could only get out of this mess with a mix of cuts in spending and tax increases. So far, it seems the cuts are not enough and the tax increase is too much. The bill as passed supposedly has some limits that will eventually force more cuts - not named or delineated as of yet. Time will tell if the spenders can be restrained or loopholes exploited. PQ may sign the bill that means he contradicted himself but what else could he have done? Who would have done different? Time will tell if PQ and the GA did the right thing. If past is prologue we are royally screwed.


  35. - Jake From Elwood - Wednesday, Jan 12, 11 @ 11:14 am:

    Thank you General Assembly for the two tablespoons of Castor Oil. You say it is good for me and good for the entire state, but I am having a hard time swallowing it.
    JFE


  36. - GA Watcher - Wednesday, Jan 12, 11 @ 11:57 am:

    Thanks, 47th.


  37. - Secret Square - Wednesday, Jan 12, 11 @ 12:06 pm:

    Yes, the 96th GA is certainly one for the record books… their first vote was to impeach Blago, their last vote was to raise income taxes, and in between they abolished the death penalty, legalized civil unions, reformed the pension plan for new hires, instituted campaign finance reforms, approved a recall amendment… the list goes on. Whether you agree with everything they did or not, you have to agree it was historic.


  38. - wordslinger - Wednesday, Jan 12, 11 @ 12:12 pm:

    Secret, true that.


  39. - Ann - Wednesday, Jan 12, 11 @ 1:21 pm:

    Just popping in to say thanks for the smile with that un-resisted last word at the end! It’s that attitude, Rich, that keeps us all reading. You’re on top of the details, and not pulling punches, but believe we can still remain on friendly terms with each other. Thank you.


  40. - levois - Wednesday, Jan 12, 11 @ 2:25 pm:

    That was an awesome retort Rich :P


  41. - levois - Wednesday, Jan 12, 11 @ 2:32 pm:

    I gotta question, Quinn was inaugurated Monday has the new General Assembly been inaugurated yet?


  42. - Keyser Soze - Wednesday, Jan 12, 11 @ 3:44 pm:

    How can a tax increase, i.e., new legislation, be addressed in a “veto session?” Is this constitutional?


  43. - Rich Miller - Wednesday, Jan 12, 11 @ 3:47 pm:

    KS, why don’t you go read it first? It’s pretty straight-forward and not too long.


  44. - Honest Abe - Wednesday, Jan 12, 11 @ 4:57 pm:

    I qualified my statement about Blagojevich. I am not a fan of his, but he did predict that a tax increase was imminent once Quinn assumed the governor’s office and Madigan and Cullerton began pushing for an increase that Blagojevich would not sign.

    Illinois needs to make massive spending cuts, but the legislators continue to hide behind the children and the seniors. Political commentator Mike Flannery criticized the General Assembly for taking the easy way out by raising taxes before making any significant spending cuts first. The actions of the past few days are like qualifying for a new credit card after running up the charges on three or four others. The day of reckoning has been postponed, but it is still coming.


  45. - Fed Up - Wednesday, Jan 12, 11 @ 5:11 pm:

    Jo, This is very Naive It is pretty simple - 4% is the tax rate we need to be at in the long term. 3% is the reason we are in this mess.

    And the rate being at 5% for the next 4 years will allow us to pay down the bills.

    If you are silly enough to believe any part of this tax increase will be temporary, then I bet you believe Pat Quinn supports the death penalty like he stated during his campaign. Their is no Santa Claus, no Easter bunny and no Temporary in this tax increase.


  46. - Rich Miller - Wednesday, Jan 12, 11 @ 5:14 pm:

    ===and no Temporary in this tax increase.===

    That depends, really, on how the 2014 gubernatorial campaign goes. I imagine this tax sunset will be the Number One topic of debate. If the tax opponent wins, it’s likely that the tax will be allowed to expire.


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* Governor Takes Bill Action
* Illinois Department of Labor Director Hugo Chaviano Awards Governor’s Award for Contributions in Health and Safety to the Illinois Refining Division of Marathon Petroleum Company LP
* State Regulator Elected Treasurer of Interstate Medical Licensure Compact




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