* My Crain’s Chicago Business column…
The latest state budgetary meltdown got me wondering: Why did the Democrats decide four years ago to allow the income tax hike to expire in the middle of a fiscal year?
The trouble caused by the Jan. 1, 2015, tax hike expiration has been tremendous.
By putting in that particular “sunset date,” state revenues are scheduled to drop almost $2 billion in the second half of the new fiscal year, which starts July 1 and ends June 30, 2015.
To prevent that dramatic loss of revenue, Gov. Pat Quinn proposed in March that the Illinois General Assembly permanently extend the income tax hike. Fellow Democrats House Speaker Michael Madigan and Senate President John Cullerton both publicly agreed.
Trouble is, statehouse tax hikes almost never get passed before an election. Former Republican Gov. Jim Thompson twice pushed for post-election tax hikes, claiming he’d badly misread the fiscal tea leaves while he was campaigning on a solemn pledge to never raise taxes.
And, sure enough, the combination of an off-year election that’s already going to be bad for Democrats and Republican gubernatorial candidate Bruce Rauner’s endless supply of campaign cash has scared the living daylights out of House Democrats. The tax extension idea was dropped.
Instead, the Democrats passed an alternative budget that kicks a very expensive can down the road, blowing a gigantic, multibillion-dollar hole in next year’s budget.
So why did the Democrats lock themselves into such a mess?
Mr. Cullerton told me a few weeks ago that he’d been asking himself that same question.
Go read the whole thing to find out what Cullerton said.
* Meanwhile, Doug Finke…
[Gov. Pat Quinn] didn’t get the tax extension, he didn’t get the $500 pre-election checks for property taxpayers (another of his proposals), he didn’t get an increase in the minimum wage (although he’ll get an advisory referendum), there’s no increase in the earned income tax credit, and most of his budgetary priorities went down the drain. He did get a new capital program of sorts, all of $1 billion for roads and bridges.
But like the Chicago Cubs, there’s always next year and the hope it will prove more successful. Except, depending on the November election, this could have been Quinn’s last spring hurrah.
“This was a successful session,” the speaker continued. “The governor didn’t get everything he wanted, but that’s the nature of the Legislature. That’s the nature of American government. But going forward, the Democrats will be together because they’ll be brought together by Republicans.”