income tax rate to raise money for education and ease deep cuts he’s
proposed in his new budget plan.
In his short budget speech to the House and Senate, Quinn argued that
an income tax "surcharge" would be enough to restore Illinois’
education budget to current levels and allow the state to get caught
up on some of the millions owed to public schools, community colleges
and four-year universities.
Quinn wants to increase the personal income tax rate from 3 percent to
4 percent — a 33 percent increase — with the corporate tax rate
rising from 4.8 percent to 5.8 percent. The tax hike would bring in
$2.8 billion a year.
"I believe this 1 percent for education makes sense, and I think the
people of Illinois will understand. We must invest in the future, even
in these tough economic times," Quinn said. This is urgent. We don’t
have six months. We don’t have six weeks. I challenge the General
Assembly to take immediate action to enact the 1 percent for education
initiative."
Last year, Quinn unsuccessfully tried to raise the personal income tax
rate from 3 percent to 4.5 percent and provide some tax relief.
The political dynamics for a tax increase have grown only worse as the
election-seeking Democratic governor confronts campaigning legislators
who fear a voter backlash in the Nov. 2 general election.
Senate President John Cullerton said today that he supports the Quinn
tax increase but wants the House to "lead the way."
Cullerton, a Chicago Democrat, noted the Senate passed an income tax
increase last year and said that the Senate would be able to pass the
new Quinn plan.
"This was the governor’s idea…and I support it," Cullerton said.
House Speaker Michael Madigan said Quinn did an "excellent job" laying
out the dimensions of the state’s budget woes, but did not directly
say whether he backed the governor’s tax increase. Madigan said he did
not know basic details of Quinn’s proposal, such as whether the
governor planned to have the tax increase expire.
Madigan said Quinn should be applauded for having the "courage" to
propose a tax hike at a time when it might be necessary yet still
politically unpopular.
"The people of America don’t want a tax increase," Madigan said.
"They’re hurting…You should admire the governor for having the
courage to stand up in these times and say we need to maintain the
fiscal integrity of the state."
Though the Democrats control the House, Senate and governor’s mansion,
Madigan tried to assign some blame to GOP lawmakers as
"non-participating dropouts in the budget process.
"I sincerely hope that every member is prepared to cooperate and do
the heavy lifting," Madigan said, referring to upcoming budget
negotiations. "I have my doubts. "
The governor’s caustic budget plan, first unveiled by top aides
Tuesday, also relies on borrowing billions of dollars to stay afloat
and pushing even more debt down the road. The administration’s hope is
to persuade leery lawmakers to instead raise taxes in an election
year.
Quinn aides warned the plan would cost some 13,000 teachers and staff
their jobs, cut off poor seniors from help in paying for costly
prescriptions and shut down some health care programs for the
indigent. But even after about $2 billion in cuts, the state would
still be $11 billion in the hole.
Quinn took a shot at a plan offered by his Republican rival for
governor, state Sen. Bill Brady, who has proposed 10 percent across
the board cuts. Without naming Brady, Quinn said his GOP opponent was
offering a plan both “heartless and naïve” that would take a
“chainsaw” approach to funding for schools and social services.
Quinn’s plan to downsize his income-tax hike request and focus it on
education funding represents a small-step, targeted approach to the
state’s massive deficit. Such a plan could motivate the state’s
powerful teachers’ unions and other education advocates during the
current legislative session, pitting supporting schools against
legislative fears of enacting an election-year tax increase.
At the same time, the education tax increase alone would do little
toward resolving the state’s $13 billion budget deficit, leaving open
the potential for further tax increase discussions between Quinn and
legislative leaders following the Nov. 2 general election.
Quinn’s gambit, to propose cuts in education and social services,
represents the latest step in the increasing divergence between the
state’s very real deteriorating fiscal situation and the rhetoric of
politicians who believe the public doesn’t want or trust Springfield
to get any more money from their wallets.
Similar cries about slashing services last year ended up being papered
over by increased borrowing. Many lawmakers privately expect that
fears among rank-and-file lawmakers about a voter revolt will lead to
a repeat of last spring’s session.
By proposing cuts of $1.3 billion in education, all but $94 million
coming from grade and high schools, as well as taking about $300
million away from cities and villages, Quinn may be trying to set the
stage for public anger over the potential of increased local property
taxes — more hated than the state income tax — to take up the slack.
At the same time, with politicians traditionally proclaiming that
education is their top priority, the likelihood of teachers being
pink-slipped in the midst of campaign season would seem doubtful.
Likewise, Chicago Mayor Richard Daley has already turned thumbs-down
on Quinn’s idea to share less state tax revenue with cities.
Though powerful Democratic House Speaker Michael Madigan of Chicago
could control enough votes for a tax increase, he has insisted
Republicans also must vote to share the pain over decades of
mismanaged budgets and underfunded state pensions. Republicans,
however, have little political incentive to back a tax increase and
have contended the excesses were due to six years of budget gimmickry
by disgraced former Gov. Rod Blagojevich and compounded by the
Democrats’ one-party rule of Springfield.
Overall, Quinn’s budget proposal forecasts a $4.7 billion operating
deficit for the budget year that begins July 1, on top of $6 billion
of debt from the current budget. Quinn would borrow to cover the
operating shortfall, which would need to be repaid later on top of the
$6 billion in lingering debt.
At the same time, the state will face the loss of more than $1 billion
in federal money that has been used to prevent cuts in education
funding this year. Quinn’s proposal counts on the federal government
continuing to pay a higher reimbursement rate for health care for the
poor. If that ends as scheduled next December, it would blow a more
than $500 million hole in the budget.
In addition to the proposed education cuts, Quinn would cut half of
the $140 million used to help poor seniors make up for the federal
"doughnut hole" in their Medicare prescription coverage.
Stermer also said there was "an agreement in the works" within the
legislature that would institute a two-tier pension plan with lesser
benefits for future state workers. Such a plan, he said, would provide
up to $300 million in savings in the budget proposal. While pushed by
prominent politicians in both parties, a two-tier system has been
fought by state labor unions.
Though it is likely that lawmakers would significantly revise Quinn’s
proposal, regardless of prospects for a tax increase until after the
fall election, the governor’s administration nodded to public
sentiment to cut government before raising taxes.
At the same time, Quinn appeared to adopt proposals offered by two
rivals for his job in the Feb. 2 primary. Echoing a call by Democratic
Comptroller Dan Hynes, Quinn would review, renegotiate or dump many
costly contracts that were signed under Blagojevich. He also proposed
a tax cut for small businesses that create jobs, while his general
election rival, Republican state Sen. Bill Brady of Bloomington,
proposed a broader tax credit.
I’m saying good bye to an old friend, more specifically my old bow hunting friend.
