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Government State

Can Madigan muster the votes to make ‘temporary’ income tax hike permanent?

Illinois Speaker of the House of Representatives Michael Madigan, D-Chicago, 
conducts legislative business from the speaker's podium during a session on the 
House floor in 2004 at the Illinois State Capitol in Springfield. Illinois 
lawmakers missed their deadline for passing a new state budget, plunging them 
into the unfamiliar territory of an overtime legislative session.
Illinois Speaker of the House of Representatives Michael Madigan, D-Chicago, conducts legislative business from the speaker's podium during a session on the House floor in 2004 at the Illinois State Capitol in Springfield. Illinois lawmakers missed their deadline for passing a new state budget, plunging them into the unfamiliar territory of an overtime legislative session.

Democratic House Speaker Michael Madigan appears to have a problem marshaling enough votes to break a promise to taxpayers, even if his title is frequently preceded in print by the word "powerful."

An upcoming House vote on a 2015 state budget that counts on the "temporary" 67 percent income tax increase becoming permanent could be a way for Madigan to test where his fellow Democrats stand. But to get the 60 votes needed to make the tax hike permanent before the end of session May 31, Madigan has to convince a number of Democrats to renege on a promise they have publicly vowed to keep – that the tax hike will significantly sunset at year's end.

"I go back to how this tax was passed, and we were suspicious at the time, but the words of the majority party was a 'temporary' income tax hike," said Rep. Robert Pritchard, R-Hinckley. "We have enough problems with ethics and living up to our word in Springfield. I don't want to be a part of continuing what we said we weren't going to do."

The Democratic Party holds a 71-47 supermajority, which means Madigan has an 11-vote cushion, given the safe bet that no Republicans will vote in favor. But at least 19 House Democrats are on record as opposing the tax increase to begin with, or favoring allowing it to expire as scheduled.

That means Madigan needs at least eight of them to change their stances and vote to keep an unpopular tax increase with an election six months away. And that assumes that all 52 of the remaining Democrats are on board with the plan.

Opinions are split regarding Madigan's odds.

As one of the most vocal Democratic opponents of the tax increase, Rep. Jack Franks of Marengo said he believes tax hike supporters will fall short given what he's seen and heard on the House floor.

"I've been actively lobbying my colleagues to vote no, and I've been working this very hard," Franks said. "I don't believe they have the votes."

Rep. Joe Sosnowski, R-Rockford, puts the odds at 50-50.

"There will be some members who will have to be pushed to support it, and I don't know if Madigan will be able to do that," he said. "It obviously shows that the billions of new dollars raised with the hike didn't fix our budget problems. It was sold to the voters as temporary, and it should stay that way."

But John Jackson, visiting professor at the Paul Simon Public Policy Institute at Southern Illinois University, said he has many reasons to believe the increase will have the votes to be made permanent. Jackson said the biggest argument that opponents have – that lawmakers wouldn't dare raise taxes in an election year – is a myth in Illinois.

"The hype about legislators losing their seats over tax hikes is almost totally legendary, and the record of people losing their seats because of their votes for a tax increase is very, very thin," Jackson said. "There's almost nobody in recent history in this state who has lost their seat over a tax increase."

Illinois workers have paid on average an extra week's salary in income taxes since Democratic lawmakers in January 2011, without a single Republican vote, raised the state income tax from 3 percent to 5 percent on individuals and from 4.8 percent to 7 percent on corporations.

But the bill signed into law by Gov. Pat Quinn also provided that the flat tax rates would roll back to 3.75 percent on individuals and 5.25 percent on corporations Jan. 1.

Democratic lawmakers sold the tax increase as a stopgap measure needed to straighten out state government's dire finances and pay down billions in unpaid bills. But it didn't work – most of the $31 billion the increase is predicted to generate has been swallowed by the state's ballooning public pension obligations, and the state's backlog of bills was $7.6 billion at the end of 2013.

In his 2015 budget address in March, Quinn asked state lawmakers to make the tax permanent, lest the state suffer draconian cuts that would hurt its neediest residents. The measure is expected to start, and pass, in the more liberal Senate, where Senate President John Cullerton, D-Chicago, said he has the 30 votes needed.

But voting records reinforce the conventional wisdom that the tax hike could stall in the House.

Twenty-three of the 60 House Democrats who voted for the tax increase in 2011 have left office. Seven of the 11 Democrats who voted against it are still in office. And while the Democratic majority has increased since then from 64 to 71 seats, a portion of the freshman class of Democrats first elected in 2012, mostly from the north and northwest suburbs, have shown an independent streak.

Seven freshman Democrats last year signed on to a bill that would have set the tax rates back to their pre-increase levels of 3 percent for individuals and 4.8 percent for corporations. Six of them face Republican challengers this November. Three incumbent Democratic lawmakers also signed onto the bill, including one, Patrick Verschoore, D-Rock Island, who voted for the tax increase in 2011.

But Franks, who signed on to a separate Republican resolution demanding that the tax increase be allowed to expire, said the bill was more for show because its sponsors did nothing to advance it. He also said with assurance that some of those lawmakers will flip.

Jackson said Democratic lawmakers who switch sides and vote for the tax increase would have little to fear in Illinois for several reasons, the biggest being legislative maps that are friendly to them.

Democrats controlled the General Assembly and the governor's office during the redistricting process after the 2010 U.S. Census, and drew safe districts for themselves for the next decade.

"Most of these guys are in seats in which they couldn't be beaten, no matter what they do. The Republicans, too," Jackson said.

And despite the polls – a March poll by the Simon Institute found 60 percent favor the tax decreasing as promised compared with 27 percent who support it being permanent – history shows Illinois voters tend not to hold grudges when it comes to tax hikes.

The largest exception is the 1972 governor's race, when Democrat Daniel Walker narrowly defeated Republican Richard Ogilvie, whose success in pushing a Republican-led General Assembly to adopt a state income tax cost him votes. But voters in 1992 elected Republican Gov. Jim Edgar, who ran on a campaign to make the last income tax increase, which like this one was supposed to be temporary, permanent. And voters in 2010 narrowly elected Quinn, who ran on a platform that included raising taxes.

However, Quinn faces a significant challenge from Republican candidate Bruce Rauner. Already unpopular in polls that project a tight race, Quinn's reputation as the Illinois rarity of an ethical politician has taken a beating in recent months over allegations of rampant mismanagement of funds for a Chicago anti-violence initiative and illegal patronage hiring at the Illinois Department of Transportation.

It could be advantageous for Madigan, who also is chairman of the state Democratic Party, to postpone the tax vote. Madigan, a 43-year statehouse veteran, is famously impossible to predict or read, said Paul Green, director of the Institute for Politics and Arthur Rubloff Professor of Policy Studies at Roosevelt University in Chicago.

"The greatest mind reader of all time would find it impossible to read Speaker Madigan's mind," Green said. "He holds his cards so close to the vest that they become invisible. Normally he's two, three steps ahead of everybody else."

Pritchard has a different view of Madigan.

"He gets whatever he wants," he said. "If he wants to extend it, even though there are Democrats who say they won't vote for it, when he wants the votes, he gets them. The voters have a very low opinion of our state government, and this is one of the main reasons."

Postponing the vote would make the race between Quinn and Rauner, a wealthy venture capitalist, a referendum of sorts about whether to keep the tax hike or slash the state budget. It likely would force Rauner to give specifics about his plans to fix the state's finances – he's been holding those cards close as well, likely to avoid giving Quinn's campaign ammunition to use against him.

Should Rauner win, he would assume office weeks after the tax expires Jan. 1 and inherit the budgetary mess that ensues. That is, unless Quinn and other Democratic leaders use the same trick they needed to pass the original 2011 tax hike and do it after the November election.

After May 31, the threshold needed to pass legislation that takes effect immediately increases to a three-fifths majority of 71 votes in the House and 36 in the Senate. But the threshold resets to simple majority Jan. 1, meaning that Democratic lawmakers would have a small window of opportunity in the lame-duck session before the swearing in of the new General Assembly. Incumbents who won re-election would be safe to vote to keep the tax increase, and those who lost might be more easily persuaded to approve it because they have nothing politically to lose.

The January 2011 tax increase squeaked through with the bare minimum of votes needed in the final hours. Twelve outgoing Democratic lawmakers voted yes, and six of them, including two who campaigned against the tax increase during their unsuccessful campaigns, were later appointed to high-paying government jobs.

But both Green and Jackson said that politics and posturing aside, lawmakers have a real problem on their hands that isn't going to go away.

"Something has to be done," Green said. "The basic, singular fact is that if the temporary income tax expires, the state is down $1.8 billion. That's fact. How do they make it up in this short run to pay bills?"

Daily Chronicle reporter Lawerence Synett contributed to this story.

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