Ward Room
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Gov. Quinn Hints at Income Tax Compromise Amid Bipartisan Opposition

Springfield attempts to hammer out a workable state budget before signing off for the summer

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Gov. Quinn Hints at Income Tax Compromise

Gov. Pat Quinn has backtracked amid strong bipartisan opposition - just a little -- on his pitch to make Illinois' income tax hike permanent .

Quinn hinted Saturday that he might be open to negotiating a compromise on his proposal to keep the individual income tax rate at 5 percent before it expires at the end of the year. That rate, enacted three years ago as a temporary hike to prop up state pensions, stands to drop to 3.75 percent on New Year's Day.

"We're working on a budget that's balanced, that pays the bills, that pays for the things we want to do as a state, that helps our families. We can negotiate that. That's part of political life," he told the News-Gazette. "But we've got to make sure that we have adequate revenue to pay for the programs that are vital to everyday people and their schools, and making sure that we take good care of people's safety."

The Democratic governor, seeking re-election this year, could not secure enough votes from within his own party when he teamed up with House Speaker Michael Madigan last week to persuade legislators to support the income tax extension. Just 34 out of 71 House Democrats would be ready to do so; 60 votes are needed. (With midterms on the horizon, state reps are reluctant to back any bill that might blow up in their face and cost them their Springfield seats.)

On Tuesday, Madigan was attempting to hammer out a state budget that does not involve cash from the continuance of a 5 percent rate. The General Assembly adjourns Saturday.

Meanwhile, Republican gubernatorial candidate Bruce Rauner is using the income tax debate as ammo for a series of robo-calls urging voters to stand up against Quinn. "Pat Quinn thinks you don’t pay enough in taxes – but I disagree," intoned the Winnetka-based multi-millionaire in his message last Tuesday.

The governor's race is growing more and more contentious by the day. While Quinn's campaign engages in class warfare to pile on Rauner's private equity past, Rauner is playing the "incompetence card" to accuse Quinn of perilous over-spending in a cash-strapped economy plagued by high unemployment and a looming pension crisis.

Though Rauner opposes keeping the income tax rate fixed, his rep tells Crain's Chicago Business that the GOP nominee "will make education a top priority and increase funding for it." The biz trade, however, pulls out some solid numbers that cast a skeptical side-eye on whether Rauner's expectations are realistic. Surprise: they're not.

"Education accounts for about half of the state's discretionary spending, which runs about $16.4 billion. If the 5 percent personal income tax rate rolls back to 3.75 percent on Jan. 1 as scheduled, the state would receive roughly $1.75 billion less in revenue for the second half of its fiscal year," writes Crain reporter Paul Merrion, adding: "If Mr. Rauner wants to increase education funding in spite of lower revenue, the other half of the discretionary budget would have to be reduced by more than $1.75 billion, a cut of upward of 21 percent."

Huffed Team Quinn, in a statement: "People who say you can tax less, spend less and somehow end up with better schools are not telling the truth. It's basic math."

What's your plan, Bruce? Time to stop recording robo-calls and 'fess up on a budget breakdown. It's no laughing matter.

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