Illinois' temporary income tax increase, scheduled to roll back next year, should remain in place, Gov. Pat Quinn proposed in his Wednesday budget address.
Quinn signed the unpopular 67 percent increase into law in January 2011 to deal with Illinois' staggering budget crisis. More than three years later, the state continues to fight back mounting debt. The increase -- the largest in state history -- was set to expire in 2015 but will remain.
"If action is not taken to stabilize our revenue code, extreme and radical cuts will be imposed on education and critical public services," Quinn said. "Cuts that will starve our schools and result in mass teacher layoffs, larger class sizes and higher property taxes."
He said rolling back the increase would result in 13,000 teacher layoffs, as well as cuts to childcare, care for residents with mental illness and layoffs of in-home caretakers and nursing home inspectors.
"We cannot stand by and allow savage cuts to schools and these critical services to unravel the progress we’ve made over the past five years," Quinn said.
In exchange Quinn worked into his budget a $500 property tax refund for homeowners, which he called "the most significant tax relief in state history."
The move helps set the tone for the election year ahead. Quinn's gubernatorial opponent, Bruce Rauner, said making the income tax permanent shows Quinn breaks his promises.
“Pat Quinn first promised the working people of Illinois he wouldn’t raise taxes by 67%," Rauner said in a statement response to Quinn's speech. "He broke that promise, taking away nearly a week's worth of pay for Illinois families. Then he promised his tax hike would be temporary. Today he broke that promise too and is doubling down on his failed policies."
Rauner's camp said Illinois has lost more than 85,000 jobs since Quinn took officer, and the state's jobless rate has gone up more in the past five years than any state in the country.
"We can balance the budget without more tax increases," Rauner said, "if we create a growth economy, and restructure and reform our broken government.”
Quinn said in his speech that when he took office he was tasked with mopping up former governor Rod Blagojevich's fiscal mess. After facing what Quinn calls the "worst pension crisis in America" and a backlog of bills on its way to $9.9 billion, state spending was cut by more than $5.7 billion. The state's Medicaid program was overhauled, 50 state facilities were closed and consolidated.
Pension reform was slowly passed, but there's still more work to be done.
A report released in January noted the projected $160 billion in savings from pension reform legislation won't be enough to fix the state’s growing deficits, and over the next 25 years, the state's deficit will increase to $13 billion.
Just as he did with pension battle Quinn proposed a "bipartisan working group to develop a new capital spending plan for next five years."
At the end of his speech Quinn said he said elected in 2010 "to be straight with the people of Illinois."
Then without naming him, Quinn took a shot at Rauner.
"Those who are telling you that Illinois can tax less and spend less and still expect to fund education are simply not telling you the truth," he said. "The truth is, Illinois is spending less - billions less - even as demands have grown."