The 2015 budget unveiled Wednesday by Gov. Pat Quinn would make the temporary 67 percent income tax increase permanent, breaking a promise made by Quinn and other Democratic leaders.
In a move skeptics warned was coming since the moment three years ago when Democratic lawmakers raised the tax on individual income from 3 percent to 5 percent, Quinn’s budget counts on keeping the tax hike, which is scheduled to start sunsetting Jan. 1. Lawmakers in 2011 also raised the income tax by 46 percent on businesses.
In his 25-minute budget address, Quinn warned of “savage” cuts that would “starve” education and other services should the tax hike start expiring as scheduled, halfway into 2015 state budget year starting July 1. Senate Democrats estimate the budget gap next year at about $2.9 billion – $1.6 billion of that is from the income tax hike decreasing.
“If action is not taken to stabilize our revenue code, extreme and radical cuts will be imposed on education and critical public services. Cuts that will starve our schools and result in mass teacher layoffs, larger class sizes and higher property taxes,” Quinn said.
Quinn’s budget ties in to the “birth to five” initiative he outlined in his State of the State Address in January – it calls for spending $100 million next year on early childhood programs, and adds another $50 million for college assistance.
The Democratic governor, who faces a tough re-election campaign against Republican Bruce Rauner, offered taxpayers a proposal for property tax relief in the form of an annual $500 rebate, and
increasing the earned income credit for low-income families. He also stated he would not accept new taxes on retirement income or expanding sales taxes to commonly-used services.
State Rep. Bob Pritchard said he agreed with Quinn’s budget priorities – he’s just not sure how to get there.
In addition to spending on early childhood education, Quinn called for the state to increase education spending by $6 billion over the next five years, and doubling Monetary Award Program (MAP) grants to allow more students to attend college.
Pritchard, a Hinckley Republican, conceded that progress has been made since the tax hike in 2011, but said the state still has about $7 billion in unpaid bills and no plan for paying them.
“[Quinn has] clearly proposed continuing the income tax,” Pritchard said, “but that was buried in his speech almost as an afterthought.”
Pritchard said he’s concerned about the lack of a framework for addressing the spending priorities.
Sen. Dave Syverson, R-Rockford, said he wasn’t surprised at the glowing nature of Quinn’s address considering that it came during an election year, but said he felt Quinn didn’t deal with the realities of the state’s financial situation.
Syverson said one his primary concerns is creating more jobs for Illinois, an area where he says the state, which had an 8.7 percent unemployment rate in February, is falling short.
“The number of jobs created has been minimal and the unemployment rate is higher now than when [Quinn] took office,” Syverson said. “Illinois is not growing jobs like other Midwestern states.”
He said the reasons are issues of worker’s compensation, health care and the state’s restrictive regulatory environment.
“We have to get in line with what other states have done,” Syverson said. “If we could do that, we would see a tremendous amount of growth.”
Matt Streb, chairman of Northern Illinois University’s Political Science Department, also said the tone of Quinn’s speech was not surprising. He said budget and state addresses give the governor the stage to present an unfiltered message.
While governors are criticized for not providing enough detail in their budget addresses, Streb said there isn’t enough time.
“He’ll have to talk about the details in the next several weeks,” Streb said.
Because it’s an election year, Streb said Quinn will have to defend his record and convince voters they are better off than they were five years ago.
“[Bruce] Rauner doesn’t have a record, so he’ll go after Quinn’s record,” Streb said. “It will be a difficult case for Quinn to make.”
By the numbers
5 percent: Individual income tax rate in Illinois; it was raised from 3 percent in 2011 and is set to begin dropping Jan. 1
$2.9 billion: Estimated Illinois budget gap next year
$1.6 billion: Amount of estimated budget gap attributed to expiring tax increase
Quinn proposals for fiscal 2015
• Spend $100 million on early childhood programs
• Spend $50 million for college assistance
• Give homeowners annual $500 rebate for property tax relief
• Increase earned income tax credit