Illinois lawmakers applauded wildly when Gov. Pat Quinn entered the House chamber to deliver his first budget address, and they applauded again when the speech was over. But that doesn’t mean they support his proposals to raise income taxes, increase vehi
Illinois lawmakers applauded wildly when Gov. Pat Quinn entered the House chamber to deliver his first budget address, and they applauded again when the speech was over. But that doesn’t mean they support his proposals to raise income taxes, increase vehicle fees and overhaul government pension systems. Even friendly lawmakers sounded a bit skeptical after Quinn laid out a spending plan stuffed with painful choices, all part of his effort to close an $11.5 billion hole in the budget. Quinn began his uphill battle to raise income taxes by portraying the increase as part of a broader plan to reform state government as Illinois grapples with "its greatest crisis in modern times." Illinois must fill the deficit, Quinn said Wednesday, but it also needs to limit government spending, overhaul state pension systems, repair crumbling roads and bridges and fight public corruption, he said. "We have the mettle to make tough choices," Quinn said in his 41-minute address. "Pass this budget and let’s begin a new era of reform, responsibility and recovery." His proposal includes not only the first income tax increase in Illinois in 20 years — to 4.5 percent from the current 3 percent — but also a $1-a-pack increase in cigarette taxes, higher business taxes and steeper fees for car registrations and driver’s licenses. Some of that money would pay for a statewide program to replace crumbling roads, bridges, schools and transit systems. The construction would support 340,000 jobs, Quinn said. Eager to show that he also wants to cut spending, Quinn said he has trimmed about $500 million from the current budget and would cut another $800 million in the upcoming budget. He’s asking state employees to take pay cuts and proposing lower retirement benefits for future government workers. Democratic legislators were open to Quinn’s ideas, but they predicted changes in the tax increases and which taxpayers are hardest hit. They also said Quinn must show the public that taxes are a last resort. "I think Illinoisans want to know, ‘Before you raise my cost of living, what are you going to do to clean up Illinois government? What are you going to do to reform it? What are you going to do to fumigate that government?’" House Speaker Michael Madigan, D-Chicago, said during an appearance on public television. Critics of Quinn’s proposal attacked from two different directions. Unions representing teachers and state employees complained that he’s unfairly asking workers to bear the brunt of cleaning up a financial mess they didn’t create. They would have to take four unpaid days off, pay more for their health and retirement benefits and continue doing their jobs under difficult conditions — for instance, working in prisons that don’t have enough guards. Meanwhile, Republicans argued Quinn should cut government spending even further and demand more from employees. "I can’t go home to my constituents and say, ‘Sorry, you’re just going to have to send money to the same old broken-down system.’ There’s other things that need to happen first before we address the issue of tax increases," said Senate Minority Leader Christine Radogno, R-Lemont. Quinn promised to keep cutting, even saying he will appoint a "Tax Accountability Board" to scour the budget. But he also challenged anyone asking for massive cuts, which he labeled "mean-spirited tactics," to come up with specific proposals. "Put it out there. Let us all see it, hear about it, look at it," Quinn said. "Saying ‘no’ is not enough unless you are willing to speak the truth and offer real alternatives." Quinn said his plan to raise income taxes would generate about $2.8 billion. Janet Redmond, a 56-year-old secretary from suburban Chicago, said Quinn’s proposed tax increase seems to contradict President Barack Obama’s push to cut taxes and stimulate the economy. "What the hell is going on? Are these guys talking to each other?" Redmond said. "It’s not play money. I (already) struggle to pay my bills." Quinn hopes to minimize the pain of a tax hike by increasing the personal exemption — the amount of a family’s income that is exempt from taxes. By tripling it to $6,000 per person, Quinn argues many families would benefit from his plan. Any family of four making less than $60,900 a year would end up with a smaller tax bill, he says. But other taxpayers face a different picture. A single person making $60,900 would pay $630 more. A two-person household — say, a single mother and her child — would pay $420 more. Quinn also proposes a sales tax "holiday" on back-to-school items to help make them more affordable for working families. Quinn wants to raise the corporate income tax rate to 7.2 percent, generating $350 million. He also wants to end about $100 million in corporate tax breaks, a proposal that lawmakers have often rejected in the past. Lawmakers interrupted Quinn with applause at least 25 times, usually when he pledged to maintain spending for some project or proposed to create jobs. They were mostly silent when Quinn laid out his plan to raise taxes. With an $11.5 billion deficit to erase, Quinn’s budget contains few bright spots. There’s no money to reopen historic sites closed by his predecessor. Mental health grants would drop by $12 million. Spending on senior citizens and disabled people will hold flat. Quinn inherited the mess when Gov. Rod Blagojevich was thrown out of office in January. He suddenly had to scramble to respond to a budget deficit driven by plunging tax revenues and increasing demand for services. By one of the many ways to measure the budget, Quinn’s proposal would push spending to $52.9 billion in the fiscal year beginning July 1. That’s up $2.1 billion, or about 4.1 percent. Much of the increase comes from federal stimulus money the state will receive for education and Medicaid. The new governor describes his budget as straightforward and honest — a stark alternative to the gimmickry that was so common under Blagojevich. But Quinn does propose cutting some corners. It would lower this year’s contributions to pension systems by nearly $2.9 billion on the assumption that Illinois will save billions of dollars in coming decades by cutting retirement benefits for new state employees. He also calls for dipping into special-purpose funds to pay for general expenses, keeping tax money that would otherwise go to local governments and diverting state road fund money to help support the construction program. That long-awaited construction plan also would be funded by raising the cost of license plates by $20, to $99, and doubling the $10 fee for a driver’s license. Mass transit construction would get a boost from an increase in the vehicle transfer fee. Although his focus was on the state’s financial crisis, Quinn also talked about an ethics crisis, noting that Blagojevich faces criminal charges and former Gov. George Ryan is in prison. He called for giving Illinois voters the power to recall corrupt officials and described his efforts to keep government bureaucrats from withholding documents from the public. "Many serious problems have resulted from this bipartisan betrayal of the public trust," he said. "Our government has an integrity crisis and Illinois must embrace far-reaching ethics reform." Associated Press Writers John O’Connor, Deanna Bellandi and Andrea Zelinski contributed to this report.
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