Illinois House passes permanent income tax hike

Austin Berg

Director of Content Strategy

Austin Berg
July 2, 2017

Illinois House passes permanent income tax hike

More than a dozen Republicans joined House Democrats in passing a budget that includes a massive tax hike and no structural spending reforms. Gov. Bruce Rauner said he would veto the plan.

The Illinois House of Representatives passed a full-year budget July 2. It’s the first time in two years the body has approved such a plan.

The revenue portion of the budget, including a permanent income tax hike, passed on a 72-45 vote, with 15 Republicans voting in favor. The spending portion of the budget passed out of the House on a vote of 81-34.

Unfortunately, this budget plan is no cause for celebration.

The plan is defined by a massive, 32 percent income tax hike on Illinois residents, who are now witnessing the nation’s worst income growth. If signed into law, the House plan will hike the state income tax rate to 4.95 percent from 3.75 percent, and the corporate income tax rate will rise to 7 percent from 5.25 percent.

The budget package is devoid of any structural spending reforms to slow growth in the cost of government: It lacks comprehensive property tax reform, major pension reform, collective bargaining reform, reforms to Medicaid and more.

The spending bill has also been described as “booby trapped” in that it blocks money for schools unless Gov. Bruce Rauner signs an evidence-based school funding bill into law. This inaptly named education funding model has been a failure in every state in which it has been adopted.

Illinoisans may recall the 2011 temporary income tax hike, which also took a tax-hike-without-reform approach. Despite $32 billion in extra tax revenue, the state’s unpaid bill backlog only declined by $1.3 billion (to $6.6 billion from $7.9 billion), and pension debt rose by $25 billion.

This time, the tax hike is permanent.

The budget bills now head to the Senate. If approved, they will then go to the governor’s desk.

However, Rauner announced he will veto the budget in its current form.

Lawmakers could override the governor’s veto with a three-fifths majority vote in each of the House and Senate, which is currently the same share it takes to send the budget to the governor’s desk in the first place.

Below is the roll call for Senate Bill 9, which contains the permanent income tax hike.

Democrats voting yes (57): Ammons, Andrade, Arroyo, Beiser, D. Burke, K. Burke, Cassidy, Chapa LaVia, Conroy, Conyears-Ervin, Crespo, Currie, D’Amico, Davis, DeLuca, Drury, Evans, Feigenholtz, Fine, Flowers, Ford, Gabel, Gordon-Booth, Greenwood, Guzzardi, Harper, G. Harris, Hernandez, Hoffman, Hurley, Jones, Kifowit, Lang, Lilly, Madigan, Mah, Martwick, C. Mitchell, Moeller, Nekritz, Phelps, Riley, Rita, Sente, Sims, Slaughter, Soto, Stratton, Tabares, Thapedi, Turner, Wallace, Walsh, Welch, Williams, Willis, Zalewski.

Republicans voting yes (15): Andersson, Bryant, Cavaletto, Davidsmeyer, Fortner, Hammond, D. Harris, Hays, Jimenez, Meier, B. Mitchell, Phillips, Pritchard, Reis, Unes.

Democrats voting no (10): Connor, Costello, Halpin, Manley, Mayfield, Moylan, Mussman, Scherer, Stuart, Yingling.

Republicans voting no (35): Batinick, Bellock, Bennett, Bourne, Brady, Breen, Butler, Cabello, Demmer, Durkin, Frese, Halbrook, Ives, Jesiel, Long, McAuliffe, McCombie, McDermed, McSweeney, Morrison, Olsen, Parkhurst, Reick, Sauer, Severin, Skillicorn, Sommer, Sosnowski, Spain, Stewart, Swanson, Wehrli, Welter, B. Wheeler, K. Wheeler.

Republicans not voting (1): Winger (excused absence).

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