Capitol - Your Illinois News Radar » *** UPDATED x1 *** Cullerton challenges Rauner, Republicans to produce, support tax hike bill
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*** UPDATED x1 *** Cullerton challenges Rauner, Republicans to produce, support tax hike bill

Friday, Jun 16, 2017

* Tina Sfondeles

The Senate president said he won’t call a Republican spending bill without a corresponding revenue bill.

Senate Democrats already passed a revenue bill with no Republican support. And while Rauner and the Republicans say they’ll now back a tax plan on their own terms, Republicans aren’t on record for voting for the measure, which would hike the income tax to 4.95 percent.

“I’m not going to vote on that [spending bill] unless we have a corresponding revenue bill to vote on, and they have to introduce that. And it would be helpful if the governor would say he’s for it because he’s never done that,” Cullerton said. “We are not going to take up any spending bills, especially since we already passed the governor’s exact introduced spending bill. So it’s hard to say that there’s anything wrong with that if you are a Republican.”

The Republican plan introduced on Wednesday is reliant upon a revenue bill, but didn’t include one. The politically unpopular measure continues to be a sticking point in the budget impasse.

* Despite what the Senate President says, a new spending bill is needed because the Senate Democrats’ plan didn’t factor in paying off the state’s mountain of past-due bills. That’s a very huge problem that has to be dealt with in an honest way.

But it would be helpful if the governor and the Republicans introduced their own tax hike bill. Introducing their own bill would prove they’re serious about this new “Capitol Compromise.” They’re going to need to at least amend the Senate’s tax hike bill (SB 9) anyway to change the income tax increase from permanent to temporary and to delete the retroactive to January 1st provision.

* There’s another problem with the new Rauner/Republican tax hike plan, however. A commenter reminded me earlier today of an Illinois Department of Revenue memo I published in late May about the Senate Democrats’ tax hike proposal

Service tax provisions. The bill inserts 5 discrete services in the Retailers’ Occupation Tax Act (ROT) (storage; laundry and dry cleaning; private detective, private alarm, and private security service; structural pest control service; and tattooing and body piercing)… It is the Department’s opinion that there is a substantial risk that the service tax components violate the uniformity clause of the Illinois Constitution […]

Entertainment Tax Fairness Act. The bill creates a new 1% tax on subscribers of entertainment (paid video programming through numerous methods including cable). It is our opinion that this tax could be challenged under the Federal Internet Tax Freedom Act (ITFA). […]

Video Service Tax Modernization Act. SB 9 creates a new 5% tax on providers of direct-to-home satellite service, direct broadcast satellite service, and digital audio-visual work. The bill does not tax cable companies. It is very likely that this tax will be challenged by satellite service providers.

If Gov. Rauner and the Republicans listen to IDOR and jettison that revenue, they’ll have to find a way to fix the resulting budgetary hole. Because, according to IDOR, the Rauner/Republican budget may not actually balance the way it stands now.


*** UPDATE ***  A commenter on another thread reminded me that the Illinois Policy Institute’s Liberty Justice Center has threatened to sue if some of the Senate’s tax hikes are signed into law

These new taxes on services, satellite TV, and streaming services aren’t just a nuisance; they are unlawful, according to attorneys at the Liberty Justice Center, a Chicago-based nonprofit law firm. […]

“If Senate Bill 9 becomes law, the Liberty Justice Center stands ready to immediately bring a lawsuit on taxpayers’ behalf to have these unlawful taxes struck down.”

The governor should address these issues.

- Posted by Rich Miller        

  1. - winners and losers - Friday, Jun 16, 17 @ 12:01 pm:

    No budget, no tax increase, no agreement.

  2. - DeseDemDose - Friday, Jun 16, 17 @ 12:02 pm:

    Cullerton put the ball in the Republicans court.

  3. - Oswego Willy - Friday, Jun 16, 17 @ 12:02 pm:

    If the Rauner faction wants to show me good faith, I’m with President Cullerton here, all day.

    1) Republican sponsors for a revenue bill meeting all criterias the Republican budget requires.

    2) Sponsors speaking “To the Bill”, on the Floors making a case for the bill’s passage.

    3) Start with 30 HGOP votes to get and cobble 71.

    Do those three things, now o absolutely know… this is a real-deal GOP Plan.

  4. - Perrid - Friday, Jun 16, 17 @ 12:05 pm:

    Right hand doesn’t know (or care) what the left hand is doing. And then, since the more than a billion in pension savings is likely fictitious (or at least several years away, after the courts weigh in), we still have a huge hole in the budget. And $400 million is health insurance that depends on the union accepting the doubling of health insurance premiums to close to a 60/40 split of the premium (as opposed to the 68/32 average that BLS reports: )

  5. - Real - Friday, Jun 16, 17 @ 12:08 pm:

    Rauner had his chance with a democrat budget and tax hike… Now he has put himself in a corner and has to come up with a republican budget and tax hike by the end of June or he is toast. Well, he is toast either way.

  6. - Perrid - Friday, Jun 16, 17 @ 12:09 pm:

    You’ll also notice, from my link above, that the average union split is 80/20, about what IL state workers get now.

  7. - cdog - Friday, Jun 16, 17 @ 12:16 pm:

    So what do Brady and Barickman say?

    (Rauner needs to quit trolling himself with IPI. It’s too weird and schizophrenic.)

  8. - wordslinger - Friday, Jun 16, 17 @ 12:19 pm:

    if the Rauner gang ever gets “honest” or “serious,” I think we’ll know it when we see it.

    Considering that they recently said 90% isn’t good enough, I won’t hold my breath.

  9. - Nick Name - Friday, Jun 16, 17 @ 12:20 pm:

    “Rauner needs to quit trolling himself with IPI. It’s too weird and schizophrenic.”

    Heh, no, keep it up. More, please.

  10. - RNUG - Friday, Jun 16, 17 @ 12:21 pm:

    I’d have to double-check my notes at home, but, if they lose the service tax portion, I think the income tax will have to be between 5.25% and 5.5% and retroactive to make the numbers work. Also factor out the phone pension and group health savings, and you’re probably close to 5.75% - 5.9%.

  11. - Anonymous - Friday, Jun 16, 17 @ 12:24 pm:

    There will not be a tax increase until the governor asks for one.

  12. - RNUG - Friday, Jun 16, 17 @ 12:27 pm:

    Phony … not phone. Darn autocorrect.

  13. - Nick Name - Friday, Jun 16, 17 @ 12:32 pm:

    “The governor should address these issues.”

    L, as they say, OL.

  14. - Valvino - Friday, Jun 16, 17 @ 12:33 pm:

    Get the duct tape out, that’s the plan.

  15. - Markus - Friday, Jun 16, 17 @ 12:42 pm:

    I’ll bet IPI is working on the Rauner/GOP duct tape ads as we speak. But then again, maybe Pritzker will beat them to it.

  16. - Joe M - Friday, Jun 16, 17 @ 1:26 pm:

    If there is a problem with the service tax components of the Senate-passed tax bill, all the more reason for Rauner and the GOP to introduce their own tax bill that will balance the budget spending bills the GOP recently introduced.

  17. - Anonymous - Friday, Jun 16, 17 @ 1:37 pm:

    The IPI service tax issue is moot. IDOR is using a pre-1970 court case that occurred prior to the new Constitution.

  18. - Skeptic - Friday, Jun 16, 17 @ 1:42 pm:

    Michael Madigan and the not-yet-introduced-Republic-revenue bills he controls….

  19. - Skeptic - Friday, Jun 16, 17 @ 1:42 pm:

    “Republican” Sorry, wasn’t trying to be ironic or snarky with that particular adjective.

  20. - RNUG - Friday, Jun 16, 17 @ 1:58 pm:

    == IDOR is using a pre-1970 court case that occurred prior to the new Constitution. ==

    The IL SC has cited pre-1970 cases in support of their decisions. Even in the pension cases, where the 1970 clause is clear, they also referenced a couple of pre-1970 decisions in rejecting the changes.

Sorry, comments for this post are now closed.

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