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* UPDATED x3 * Sun-Times: Tax deal reached

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Illinois

* As subscribers already know, the tax hike deal may be a bit higher than this, but details are still somewhat sketchy at the moment. Sun-Times…

Gov. Quinn and the Democratic legislative leaders have struck an agreement to raise the income tax on individuals from 3 percent to 5 ¼-percent and raise the state tax on cigarettes by $1 a pack, sources said.

The moves, if they pass the House and Senate before next Wednesday, could erase the state’s expected $15 billion deficit, generate a $700-million-plus windfall for schools and grant property tax relief, sources said. […]

What the governor has laid on the table — we’ve talked to the Senate black caucus; we’ve talked to the House black caucus — and we are pretty much in consensus that our two main points are being fulfilled, education funding and property tax relief. We’re OK with the mechanisms to get there,” said Rep. Will Davis (D-Homewood).

Davis said Quinn described the tax plan as an “agreement” he had reached with Madigan and Cullerton.

I’ve confirmed that Speaker Madigan, the governor and the Senate President are on board with this plan.

Discuss.

* UPDATE: I just checked again and as far as I know the tax hike plan at the moment is 2.5 points, as I reported to subscribers earlier.

* UPDATE 2: Apparently, there is now a difference of opinion on what was agreed to. So for now I’ll say 2.25 unless this gets straightened out.

* UPDATE 3: Will Davis talked to reporters right after session ended for the day…

posted by Rich Miller
Thursday, Jan 6, 11 @ 6:15 pm

Comments

There was no choice here. Taxes have to go up and spending down or else the State is bankrupt. At least they took action and hopefully they can wise enough in the future that we won’t be in this spot again. Though it is getting VERY expensive to live in Cook County.

Comment by jayhawk97 Thursday, Jan 6, 11 @ 6:22 pm
Excellent work a the nth hour “Leadership”.

Let the Inaugural festivities begin…the Blago era
is officially over…it took a tax increase yes, but hopefully better days are ahead…

Comment by Loop Lady Thursday, Jan 6, 11 @ 6:24 pm
It sounds like a good plan. Let’s pass it and get ready for the parties.

Comment by Bill Thursday, Jan 6, 11 @ 6:24 pm
I wonder what the property tax relief will be since in my town property taxes are almost certain to go up via a referendum this spring. I wonder how the extra school money will be distributed, too.

I also wonder what kind of wonderful raises unionized public employees are looking at in 2012.
Seems like all this money sloshing around could help them pull away even further from their counterparts in the private sector. Not to mention the even more wonderful raises for upper level management,probably starting immediately.

But as I’ve been saying…it wasn’t a secret. And the payroll tax holiday will mask it for a while.
Maybe the middle class taxpayers who will get hit by all this soon (in addition to rising food, gas, and health care costs) won’t notice. But if they do, they can hardly say they weren’t warned.

Comment by cassandra Thursday, Jan 6, 11 @ 6:37 pm
My concern now is that the plan has gotten so broad and big in order to meet everyone’s needs, that it will now implode from its own weight. Look at the recent history of gaming bills.

I’d actually be shocked if it passed in this form. I’m also amazed that they reached an agreement just the senate leaves town for several days, giving the Tribune time to run daily editorials attacking the 83% tax increase.

Comment by Don't Worry, Be Happy Thursday, Jan 6, 11 @ 6:40 pm
Cassandra-
Public employees do not make more money than employees in the private sector when you control for education. Please stop spreading contrary misinformation. http://epi.3cdn.net/5ac7364828b94bd6f3_8km6bxwby.pdf

Comment by chi Thursday, Jan 6, 11 @ 6:50 pm
Hey Rich, can you explain how any of this reduces property taxes. Don’t think Quinn has an understanding of how the property tax cycle actually works.

Comment by Chi-Town Thursday, Jan 6, 11 @ 6:50 pm
Megan- Oh yeah, its always the unions and those evil government employees. You know, like the ones that have been working for the state for 35 years and have finally gotten their salary up to a whopping $43,000/year. Those evil people.

Comment by anon Thursday, Jan 6, 11 @ 6:50 pm
Great…corporate rate goes to 8 percent, throw in the replacement tax, and our rate of 10.5 percent makes Illinois tops in the nation.

Can’t wait for the signs at the Border.

WELCOME TO ILLINOIS

Highest Income Tax Rate
Highest Sales Tax Rate

Comment by 4 percent Thursday, Jan 6, 11 @ 6:50 pm
From that video it seems like the state house is pretty festive at the moment.

Comment by Anonymous Thursday, Jan 6, 11 @ 6:58 pm
So Quinn lied during the campaign. That’s not a drive by slogan it’s a fact Quinn stated he would veto any increase over 4%. Makes you wonder why that call them tax and spend democrats.

Comment by Fed up Thursday, Jan 6, 11 @ 7:00 pm
Great, so now a pack of smokes will be $10-$11 in Chicago?

Comment by Matt Thursday, Jan 6, 11 @ 7:03 pm
The whole notion of property tax relief for Chicago is nuts. The politicians won’t admit it, but property taxes for homeowners in Chicago are actually quite low, around 1% of home value. In many suburbs, it is 3-5%. Meeks is on more of an ego trip than anything else on this issue.

Comment by Anonymous Thursday, Jan 6, 11 @ 7:04 pm
I’ve been a long time supporter of the necessity of a tax increase. But if it’s really an increase of 2.25% with no real property tax relief, that’s gonna sting.

Comment by ChicagoR Thursday, Jan 6, 11 @ 7:06 pm
Awesome! Now lets lower property taxes.

Comment by David Aubrey Thursday, Jan 6, 11 @ 7:08 pm
Awesome… Taxes go up, spending goes up, they say prop taxes will go down but that won’t happen. Yay!

Comment by DavE Thursday, Jan 6, 11 @ 7:13 pm
Once the taxes are passed, Quinn and his tax eating friends will begin feasting again. Hopefully, Madigan can extract and enforce spending controls, but I have my doubts. From my experience with Quinn in various government formats, I wouldn’t give him an extra nickel to spend. We must not only pay down existing debt, but freeze spending increases.

Comment by Louis Howe Thursday, Jan 6, 11 @ 7:13 pm
YES - YES - YES - lets move forward -
tax increase and death penalty abolish in the House the same day?!

Comment by collar observer Thursday, Jan 6, 11 @ 7:18 pm
Brings about the collapse sooner. Good job, Hapless Pat!

Comment by Hurrah! Thursday, Jan 6, 11 @ 7:20 pm
Will the workers’ comp reform bill be attached to this legislation?

Comment by Curious Thursday, Jan 6, 11 @ 7:21 pm
This tax increase stuff makes me want to start smoking (I already drink and cuss).

Comment by Tea Party Liberal Thursday, Jan 6, 11 @ 7:22 pm
Not to mention that the first real in-your-eye view of this will be in tax season of 2012. Election year! This is gonna be fun. New ammo for tea-party folk. Look for a Democratic rout in 2012. Clear out these fellows. And neuter Hapless Pat.

Comment by Hurrah! Thursday, Jan 6, 11 @ 7:23 pm
I’m watching the clip from Update 3 on my phone, so the screen is quite small, but isn’t that Rep. Al Riley speaking? Not Rep. Will Davis …

Comment by 984 Thursday, Jan 6, 11 @ 7:26 pm
Looks like this is to be a four year temp tax, then back to 3.5%, Well, that’s not gonna do much. Not gonna save many juicy pensions.

Comment by Hurrah! Thursday, Jan 6, 11 @ 7:28 pm
Sure gonna make the working man mad, though. At least as long as he has a job in IL, that is!

Comment by Hurrah! Thursday, Jan 6, 11 @ 7:29 pm
This is probably a good thing for Illinois. No one can realistically expect to eliminate the deficit without more revenue. Quinn is supposed to be coming up with a list of big cuts to GRF programs to add to the mix.

I think the bigger question is whether he can be enough of a leader to take this new situation and make the most of it? I am highly doubtful but let’s hope for everyone’s sake he can.

Like with the Congress, maybe Lame Duck Time is the only time things can get done now.

Also- can some of you folks get some original comments going? It’s getting awfully repetitive lately. I’m just sayin’.

Comment by DuPage Dave Thursday, Jan 6, 11 @ 7:32 pm
Taxed 5.5% when you make it and 6.25% when you spend it. Plus numerous other fees and taxes. When do we cut spending?

Comment by Taxed Too Much Thursday, Jan 6, 11 @ 7:33 pm
Are the GOP really not going to offer up an alternative, besides venting? What in the world are they doing down there?

Comment by wordslinger Thursday, Jan 6, 11 @ 7:34 pm
Happy days are here again? See what happens when Quinn takes a break from a bunch of public appearances and actually hunkers down to WORK? Holding my fingers crossed that this really WILL plug the deficit in a realistic way. I expect that the property tax relief will not really happen until springtime. But I think Quinn has done what he said he would before he election, and he’s doing what we all in our hearts have long known was needed. I consider this an auspicious start to 2011. Now, if Quinn and Madigan can keep a lid on the spending while the economy comes back up to a boil, we may see Illinois become a great example of a recovered state.

Comment by Gregor Thursday, Jan 6, 11 @ 7:35 pm
TTM, in 2013. This is going to fuel a fire that won’t be put out by Chicago. Heck, this is going to be such a bomb, half of Chicago will vote with tea-partiers in 2012. Gorgeous, Pat! Heck of a job!

Comment by Hurrah! Thursday, Jan 6, 11 @ 7:36 pm
Almost doubling the income tax will do wonder for this states competitiveness.

Any Republican who votes for this should be sent away to a bad place…..

Comment by Plutocrat03 Thursday, Jan 6, 11 @ 7:36 pm
I pay taxes because I’m an adult & that’s something adults do without whining. Besides, roads don’t build themselves.

Comment by Grownup Thursday, Jan 6, 11 @ 7:36 pm
If they can’t even figure out what rate increase they agreed to, what makes anyone think they can spend the new money wisely? Hey, taxes are a part of life. I’d have no problem with this if I had any confidence in Quinn and the General Assembly to formulate a plan to make sure this doesn’t happen again. Their “plan” here seems to have been to let the backlog of unpaid bills get large enough that legislators would panic and agree to any increase.

Comment by Anonymous Thursday, Jan 6, 11 @ 7:37 pm
Words, all they have to do is sit back and let Pat do his magic. Unicorns, puppies gassed alone, lollipops and rainbows. Naw, the GOP doesn’t have to do anything…not at this point, anywa. Asode from voting NO, of course. If they don’t, they’ll be replace in 2012, along with the Dems. This is toxic beyond beliel (unless you are a teacher, Afscme member or general gov’t teat-sucker. of course).

Comment by Hurrah! Thursday, Jan 6, 11 @ 7:40 pm
We, collectively, deserve this. We, collectively voted for this kind of government since 2002. Part of it is going on trial in April. The rest is running the state.

Comment by park Thursday, Jan 6, 11 @ 7:40 pm
The medical cannabis issue will come back. And I’m hoping that the legislature opens up hemp production as well. The cops just have not made a convincing case against either issue, but have stuck to a fearmongering campaign of disinformation to sway public opinion. I think this one is going to happen: the old people that are swayed by such propaganda are dying off and younger generations are more open-minded about this sort of thing.

Comment by Newsclown Thursday, Jan 6, 11 @ 7:42 pm
If the property taxes decrease and spending goes down…I will wait before I beleive that.

Comment by Wumpus Thursday, Jan 6, 11 @ 7:48 pm
Hurrah, that’s swell. Which is it — the Illinois GOP has no obligation to offer alternatives or they just have no game at all, beyond another decade or so of “maneuver” for the next election they’ll lose.

Get involved or go home. It’s sad. Believe it or not, there are active Republican Parties in other states — and many of them worked their way into power last year. One of the few that did not in a GOP landslide year was located — guess where?

Comment by wordslinger Thursday, Jan 6, 11 @ 7:49 pm
Unfortunately, they will budget using static models to project revenues - but the higher taxes will depress the state economy further so as to yield below projected revenues.
So we will be back in deficit mode right away.

Comment by titan Thursday, Jan 6, 11 @ 7:52 pm
as soon as my last child is out of school-we are listing our house and moving- the idiots running our state are encouraging the people who have the luxury of living elsewhere to leave- the average taxpayer in illinois didn’t create this mess nor should we be responsible for paying the pension benefits of the public sector whose benefit schedule is unfunded and out of whack compared to what folks are receiving in the private sector- GOOD BYE AND GOOD LUCK

Comment by sue Thursday, Jan 6, 11 @ 7:53 pm
You know, we really don’t have to argue or even predict what’s going to happen in 2 years, or 4. All we really have to do is wait and see. If this comes to a vote, each player gets to stake out his/her position clearly. Those in charge will then be responsible for trying to administer it well. And, then we will see what happens.

This may not be a perfect plan. It may not even be a good one. But, it’s the best one out there, if for no other reason than because we Republicans have offered no alternatives; slogans and talking points, yes, but no real budget proposals.

Comment by steve schnorf Thursday, Jan 6, 11 @ 7:54 pm
–as soon as my last child is out of school-we are listing our house and moving–

Tax-eater!

Comment by wordslinger Thursday, Jan 6, 11 @ 7:55 pm
Sue; don’t let the door hit you in the ass

Comment by steve schnorf Thursday, Jan 6, 11 @ 7:56 pm
Words, I am home, hun. The Dems control the game. Just like when Nancy P was in power in DC. And we all know how THAT ended.

Really..the GOP just needs to not give cover.

The responsibility of majority power and all that, you know.

Pretty sweet. This is the Dem’s baby.I sure wouldn’t want to change this thing’s diapers, though. Your chore.

Comment by Hurrah! Thursday, Jan 6, 11 @ 7:57 pm
Sue’s kids better not be at Naperville High or New Trier… freeloader.

Comment by Grownup Thursday, Jan 6, 11 @ 7:57 pm
Iowa looks good.

They’re so radical they are going to FORCE their DEVOTED public servants to pay a little of the health care premiums.

That’s the kinda draconian evil I can get behind.

Comment by Hurrah! Thursday, Jan 6, 11 @ 7:59 pm
I agree with you slinger, the IL GOP has no IF or TV (intestinal fortitude/testicular virility)

Comment by Tea Party Liberal Thursday, Jan 6, 11 @ 8:01 pm
LOL, you Dems…such logic!

IF her kids are in Illinois schools, she’s been paying fees and taxes up teh wazoo.

Ya can’t force folk to stay in this state you know, even with your stinging accusations.

Hey, by the by: do you gov’t employees pay state income taxes on those juicy pensions? Thought not.

Free-loaders. Tax-eaters.

Comment by Hurrah! Thursday, Jan 6, 11 @ 8:02 pm
I am in college and once I graduate I am getting the heck out of here. I have had it with this state. Oh Yes I am a Republican.

Comment by John Thursday, Jan 6, 11 @ 8:02 pm
John, same to you.

Comment by steve schnorf Thursday, Jan 6, 11 @ 8:08 pm
It;s hard to believe that Illinois is dealing with its fiscal issues in a meaningful and comprehensive way. The state is headed to financial Armageddon on an unprecedented scale, a viable solution is presented and it’s about to happen, This is a rare moment.

Comment by Barry S Thursday, Jan 6, 11 @ 8:09 pm
Good luck John. I hope you choose on the real Red states, like Alabama or Louisiana. You know, the places with the lowest quality of life in the country.

Comment by Grownup Thursday, Jan 6, 11 @ 8:09 pm
Grownup, that strikes me as a racially-tinged statement. I denounce you.

Comment by Hurrah! Thursday, Jan 6, 11 @ 8:11 pm
Hurrah! I’ll take the denouncement, but I don’t see the racial connection. I’m referring to the statistics: life expectancy, education as compared globally, infant deaths, average income, etc.

Comment by Grownup Thursday, Jan 6, 11 @ 8:13 pm
–Iowa looks good. –

Dude, you don’t know from state income taxes until you live in Iowa.

How does a 6%-12% corporate rate grab you?

For individuals, how about 6.12% on your first $13,000, maxing out at 8.98% once hit $63,000?

When I lived in Iowa, everyone was always threatening to move to Illinois because of taxes.

Comment by wordslinger Thursday, Jan 6, 11 @ 8:29 pm
Everyone here seems to think this is a “courageous” move, when in fact a tax increase before meaningful reforms to contracting, work rules, collective bargaining, pensions, school funding, red tape, work comp, tollway, economic development and management structure are done is the real cowardice and the lazy way out. Having been involved in business recruitment, it’s already been hard enough competing with our neighbors. Making ourselves more unfriendly seems counter intuitive until you realize it’s the same clowns running the joint.

Comment by Shemp Thursday, Jan 6, 11 @ 8:34 pm
Former GOP Budget Director Mr. Steve Schnorf: “Sue; don’t let the door hit you in the ass”

Post Of The Year

Comment by Give Me A Break Thursday, Jan 6, 11 @ 8:35 pm
Steve you don’t believe people have a right to be upset about Quinn lying to them during the election? This isn’t what Quinn campaigned on he is a snake oil salesman

Comment by Fed up Thursday, Jan 6, 11 @ 8:35 pm
This is so Illinois. No tax increases for years, then boom!-75% increases in individual and corporate income taxes and 102% increase in cigarette taxes. Good work as usual IL general assembly!

Comment by state mope Thursday, Jan 6, 11 @ 8:45 pm
Words, when I lived in Iowa, people did envy(esp if they had a healthy income) the flat 3% income tax of Illinoisians, but they did NOT envy the higher property taxes. So that, back then, was rather a wash. Now, clearly, IL is deep in teh crapper, making Iowa glisten with wealth and health by comparison. Plus, Iowa is asking(gasp) gov’t workers to pay some of their(gasp)health care premiums. I don’t believe anything of THAT sort is in Hapless Pat’s plan.

Comment by Hurrah! Thursday, Jan 6, 11 @ 8:50 pm
Surprised there is not more concern for the working poor and unemployed(who, unlike wealthy pensioners,pay income tax on their unemployment checks)on this board. How are they going to deal with an almost doubling of their taxes? I guess that doesn’t matter much as long as Afscme and the IEA stay fat and happy. “Let them eat cake!” says Hapless Pat and his cronies.

Comment by Hurrah! Thursday, Jan 6, 11 @ 8:55 pm
spend, Spend, SPEND. People, we’re are in too deep to cut our way out! Raise taxes and repeat.

Comment by whatever Thursday, Jan 6, 11 @ 8:58 pm
@ Hurrah!

Thankfully for the working poor of Illinois, Crooked-Bill Brady never had a chance to take away the union jobs.

The folks in “right to work [unpaid]” states love all the new jobs they have at Dollar General & Walmart.

Comment by Grownup Thursday, Jan 6, 11 @ 8:58 pm
Checking out for the night, but wanted to say, that this is the BEST gift the Dems could give the GOP. Thank you. We’ll suffer along with our fellow citizens(not on the gov’t teat) until 2013. We couldn’t have done it without you, Pat, Micheal and Cullerton. You are laying down such a stinky one, you’ll not rid yourself of the stench for a very long time. Tea-partiers are amazed at your utter and amazing stupidity!! Thanks again!

Comment by Hurrah! Thursday, Jan 6, 11 @ 9:00 pm
LOL..grownup…what Bill Brady could not do, Pat and Co will accomplish. Driving union and other jobs out of state!

And thanks for your kindness towards the folk working at Dollar General. You’re a real nice bloke. Full o’the milk of human kindness.

Comment by Hurrah! Thursday, Jan 6, 11 @ 9:02 pm
So the Democrats basically got in a room and said “why raise taxes by only 2% when we can raise them by 2.25% and throw another $700 million down the public education rat hole!”

The mind boggles.

Comment by speechless Thursday, Jan 6, 11 @ 9:16 pm
Actually grown up those right to work states are filled with auto plants that pay a damn good wage and buil good cars. Just not crap from the detriot not so big anymore 3

Comment by Fed up Thursday, Jan 6, 11 @ 9:19 pm
It’s something that needs to be done.

But somehow, I’m not all that confident that the bunch in Springfield will do what they should do with the new tax dollars.

Comment by Concerned Voter Thursday, Jan 6, 11 @ 9:22 pm
Taxed Too Much - “When do we cut spending?” Quinn has cut spending quite a bit. Look up the numbers yourself, or follow the CapFax blog more closely.

Comment by DuPage Dave Thursday, Jan 6, 11 @ 9:28 pm
Fed up: I believe both Gov Quinn and Sen Brady really hoped what they were saying during the campaign could and would turn out to be true.

Comment by steve schnorf Thursday, Jan 6, 11 @ 9:30 pm
Taxed Too Much, DHS alone this year cut $750 Million from their budget. Let me repeat that $750 million from their budget. Not sure if three quarters of billion bucks are cuts enough for you, but Illinois’ providers might differ with you.

Comment by Give Me A Break Thursday, Jan 6, 11 @ 9:48 pm
FI, don’t pat yourself on the back too much. As you must know, Illinois is a net exporter of dollars to D.C.

Population of Virgina: 7.8 million
# of Federal Employees: 295,000

Population of Illinois: 12.9 million
# of Federal Employees: 112,000

From Forbes, “Richest Counties,” 3-11-2010:

–A number of the country’s wealthiest households are tightly concentrated in counties around the nation’s capital. Six of the richest counties lie on the outskirts of Washington: Fairfax County, Va., Arlington County, Va., Stafford County, Va., Prince William County, Va., Charles County, Md., and Alexandria City, Va.–

Virginia is for Lovers… of High-Paying Federal Jobs

Comment by wordslinger Thursday, Jan 6, 11 @ 10:18 pm
@ Wordslinger:

Point well made. Virginia also has something very social-democratic: some of the best public universities in the world (only Michigan & California are comparable). Virginia (& North Carolina) are certainly leaders in the southern region, but they are also the least “Red.”

Moreover, many of Virginia’s recent advances were from former Governor Tim Kaine’s leadership.

Comment by Grownup Thursday, Jan 6, 11 @ 10:26 pm
They may as well add in a .25% sales tax increase while they’re at it. Capture some receipts from those whose income originates in the underground economy - and those evil retirees.

Comment by Excessively Rabid Thursday, Jan 6, 11 @ 10:50 pm
@Hurrah -

State employees don’t pay taxes on their pensions because NOBODY in Illinois pays taxes on their pensions.

@Speechless -

Illinois’ public schools have produced Nobel Prize winners, award-winning authors and poets, renowned musicians and artists, military heroes and leaders, corporate CEOs…heck, I think they’ve even got an astronaut or two to their credit.

The public education hasn’t failed our kids, we have.

Comment by Yellow Dog Democrat Thursday, Jan 6, 11 @ 11:28 pm
That said, I’m sure that new money for education worked into next year’s budget will come with many well-thought reforms attached.

Comment by Yellow Dog Democrat Thursday, Jan 6, 11 @ 11:29 pm