* 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.