SPRINGFIELD – With time running out on the legislative session, House Speaker Michael Madigan said Wednesday he’s pulling back on a plan to extend the state’s temporary income tax increase and moving forward with a smaller budget that could mean billions of dollars in cuts to state spending.
The Chicago Democrat said he hasn’t abandoned the tax increase proposal, however, despite falling considerably short of the votes needed at this point. He said he’ll continue to press lawmakers to support making the tax increase permanent, and said it’s “a possibility” legislators will see the impact of the spending cuts and rethink their opposition to higher taxes.
“However, the clock is running and we’re getting closer to the end of the month,” Madigan said. The legislative session adjourns May 31.
A spokeswoman for Democratic Gov. Pat Quinn said Quinn – who made his case to House Democrats in a closed-door meeting Monday night – isn’t giving up.
“The governor is continuing to work very hard,” Brooke Anderson said. “He’s been meeting with members nonstop all day. He met with members yesterday.”
The tax hike approved by lawmakers in 2011 raised the income tax rate for individuals from 3 percent to 5 percent. It’s set to roll back to 3.75 percent in January. Quinn, Madigan and other supporters of the increase say that without it, schools, social services and other programs will see severe cuts.
Madigan’s announcement came shortly after a meeting of the Democratic caucus late Wednesday. He said only 34 of the 71 House Democrats said they’d support keeping the tax hike in place – an even smaller number than Democratic leaders said they had earlier in the week. Another 30 were against it and four legislators voted “present,” Madigan said. It takes 60 votes for approval in the House, and all Republicans oppose the measure.
The House last week approved a $37.1 billion 2015 budget that depended on the tax increase. But with that funding looking less likely, Madigan said he instructed legislators to draft a roughly $34.5 billion budget. That’s the amount the House approved earlier in the year, based on revenue without the tax increase. He said he asked them to come up with the alternative budget “as soon as possible.”
Several Democrats opposed to the increase are fighting to keep their seats in November – timing that’s making the vote particularly tough, Madigan said.
Meanwhile, other efforts to garner support for the tax increase were ongoing.
State Rep. Elaine Nekritz, a House assistant majority leader, proposed legislation Wednesday to create an ongoing capital construction program to fund transportation projects in members’ districts. It would be paid for with the state’s sales tax on gasoline, but Nekritz said it only would be possible if the tax hike is approved so money from gas taxes doesn’t have to be used elsewhere.
“I believe in the policy of this, but the politics works too,” said Nekritz, a Northbrook Democrat. She acknowledged that the legislation is a way to tell constituents “why I voted for the tax increase.”
The plan would divert the state’s share of money from the 6.25 percent of sales tax on motor fuels from the general revenue fund to a newly created “Transportation Reform Fund.” Eighty percent of that money would be used for highway maintenance, construction and bridge repair, congestion relief and construction of aviation facilities. Another 20 percent would be used for rail and mass transit.
Sue Hofer, spokeswoman for the state Department of Revenue, says gas sales tax currently generates about $780 million per year, to be spent on schools, social services and public safety.
Nekritz says it’s a way to make a permanent fund for construction projects. Funding for the current $31 billion capital construction program_passed by the Legislature in 2009_is set to run out next year.
Still, some members said the idea didn’t sway their votes.
“That would not impact my decision at all,” said state Rep. Fred Crespo, a Hoffman Estates Democrat. “I told the governor in caucus I’d be a no vote (on the tax increase). I strongly suggested he start looking at other options. The clock is ticking.”