Illinois Senate Democrats Vote For $5.4 Billion Tax Increase

Senate Democrats added spending to a budget plan Tuesday to lure more Democratic support before voting to approve a $5.4 billion tax increase without a single Republican "aye."

With eight days remaining before the General Assembly's scheduled May 31 adjournment, Democrats said they couldn't wait any longer to approve a plan and give the House time to weigh in. Approving a budget after that date would require a three-fifths majority.

Illinois has been without a budget since summer 2015. It's the longest any state has gone without an annual spending plan in modern history. The fiscal year will end June 30 with a deficit pushing $6 billion. The state was behind on paying $14.4 billion in bills as of Tuesday.

A fiscal outline influenced by Republicans failed to attract a single GOP vote last week. So Democrats decided to go it alone and replaced previous spending cuts on Medicaid, retiree health insurance and revenue sharing for local governments. They approved increasing the personal income tax rate from 3.75 percent to 4.95 percent and passed a $37.3 billion spending plan, which they noted is the same amount Rauner proposed in February while still reducing spending by $3 billion.

The legislation's sponsor, Democratic Sen. Toi Hutchinson of Olympia Fields, noted that with no action, the mountain of past-due bills could grow 70 percent by next year.

"Please explain to me what the income tax will be with $24 billion in backlog," Hutchinson said. "Junk-bond status. No capital bill. No roads. No infrastructure, no school repairs, no nothing. If you're waiting for a better deal with the tax payments, somebody better start telling the truth."

But Republicans were still pressing for a trade-off under which they would support the tax increase in return for Democrats supporting Gov. Bruce Rauner's call for freezing local property taxes and reducing costs in the workers' compensation program. In a "Facebook Live" appearance at noon, Rauner continued to beat the drum.

"You're delivering a punishing tax increase and making the wrong people pay," said GOP Sen. Kyle McCarter of Lebanon.

Democratic Senate President John Cullerton of Chicago said after the vote that Republicans rejected his best offer last week — a two-year freeze on property taxes. He ticked off votes on education funding changes, an overhaul of pension funding and other Rauner demands that were approved last week. He said property taxes and workers' compensation are still in play. He acted baffled that Republicans would so soundly reject a fiscal blueprint they so heavily influenced.

"This is a product of negotiations with Republicans," Cullerton said. "The taxes are the product of negotiations with Republicans. The only thing missing are Republican votes."

Senate Republican Leader Christine Radogno of Lemont, who has been out front for five months in negotiating pieces of the so-called "grand bargain" with Cullerton, listened to the budget debate from her office, her spokeswoman said. In a statement, she said she hopes the House "can approach it in a bipartisan manner and make further progress."

In addition to the income tax hike, the state's 6.25 percent sales tax would be expanded for the first time to services such as dry cleaning and laundry, storage units, vehicle maintenance and tattoos and piercing. The latest version removes other personal services, landscaping and home maintenance.

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