Quinn Mulls Smaller Tax Hike to Woo GOP

Current budget year ends next week

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    NEWSLETTERS

    The clock is ticking...

    Illinois lawmakers returned to the Capitol on Tuesday to face a historic budget crisis and a ticking clock, but they displayed little sense of urgency.

    Although thousands of protesters rallied to demand action, the House and Senate met for just a few minutes before adjourning.

    Gov. Pat Quinn said he would consider a smaller tax increase for businesses if that would win some Republican votes, then spent the rest of the day talking to legislators in hopes of drumming up support for his budget proposals.

    A vote, if one is ever taken, wouldn't come until next week at the earliest -- on the last day of the current budget year.

    The state's top financial officer, Comptroller Dan Hynes, said Quinn has handled the budget so badly that officials should just start from scratch.

    Illinois faces the largest budget deficit in its history, but Quinn and lawmakers can't agree on what to do. They already have reduced the deficit from at least $11.6 billion, but Quinn says the budget lawmakers passed still has a $9.2 billion hole.

    Quinn wants to use a combination of spending cuts, tax increases and budget maneuvering. Lawmakers are balking at a tax increase and approved a budget without one, but Quinn says it would require drastic cuts to social service programs.

    The current budget expires June 30. Without a new one, state government would face strict limits on spending money and could have to cut back on services.

    More than 5,000 people gathered at the Capitol to demand a tax increase. Their signs read: "Just Fix It" and "No Blame, Just Solutions."

    Officials don't have any pleasant options.

    Many lawmakers oppose a tax increase, either out of principle or out of fear of a voter backlash.

    A tax increase can't pass without some Republican votes, and the GOP has so far been solidly opposed. Quinn dangled the possibility of a smaller tax increase for corporations if that would win some new support. He originally proposed raising the corporate rate to 7.2 percent, up from 4.8 percent. Quinn wants a 4.5 percent tax rate for individuals, up from 3 percent now.

    Another option is to cut spending drastically, but many officials say that would mean gutting vital services to the state's neediest people.

    "I am not going to preside over a dismantling of that fundamental safety net that we are proud of in Illinois," Quinn said.

    After meeting with legislative leaders Tuesday evening, Quinn reported some progress.

    He said officials have agreed to provide promissory notes that will allow government pension systems to borrow money, so that the state could use about $2.3 billion dedicated to pensions on other things.

    Quinn said legislative leaders also agreed to let him make an additional $1 billion in cuts to government agencies and administration.

    Officials could postpone a decision by extending the current budget for a month or two, or by sticking with the limited new budget they've approved and promising to come back in January to do more.

    Hynes, the state comptroller, said in an open letter to Quinn that the governor has mishandled the budget by taking inconsistent positions on the size of a tax increase and by not showing the public that the budget is being cut as much as possible.

    "My final recommendation is this: Start over," Hynes said to his fellow Democrat.

    He said lawmakers should approve a 60-day extension to the current budget to accommodate that.