It’s been one year since Democratic Gov. Pat Quinn signed off on a 67 percent income tax rate increase and Republican legislative leaders didn’t let the milestone pass in silence, gathering Thursday to warn that the temporary hike will become permanent if the state doesn’t change its spending habits.
The GOP leaders called on lawmakers to repeal the increase which raised the personal income tax rate to 5 percent from 3 percent. The Quinn administration dismissed rolling back the tax hike this year, saying it is unrealistic unless Republicans also want to “repeal reality.”
“We just can’t take the plan seriously,” said budget spokeswoman Kelly Kraft, who said the increase brought in an estimated $7 billion last year.
House Republican Leader Tom Cross said the state should cut costs by slashing Medicaid and pension expenses, steps he argued should have occurred before Democrats voted to raise taxes.
“I think the most troubling aspect about this for us is that we could have avoided this,” said Cross, of Oswego. “If you’re an Illinois taxpayer, you ought to resent this. You ought to be angry about it. You ought to say, ‘Why didn’t you do the things you know needed to be done?’ “
The tax hike was passed by a lame duck legislature without a single Republican vote. In addition to raising the personal income tax rate, corporations saw their tax rate jump from 4.8 percent to 7 percent.
Under the law, the personal rate is supposed to stay at 5 percent until 2015, when it would drop to 3.75 percent. The rate would eventually drop to 3.25 percent in 2025. For businesses, the rate would stay at 7 percent until 2015, when it would fall to 5.25 percent.
But Senate Republican Leader Christine Radogno of Lemont said the state hasn’t done enough to curb spending. She said it’s unlikely the increase will be phased out and speculated the state may soon need another tax increase to meet growing budget demands.
“Democrats who passed the tax increase are continuing to spend those revenues, and spend it on a path that means the increase will be permanent and we still won’t be able to improve and finally correct the bottom line here in the state,” Radogno said.
Kraft said without the tax hike take, thousands of teachers, firefighters and police officers would have been laid off and services would have been dramatically slashed. She said Quinn has already implemented several Medicaid and pension reforms, and has convened a panel to figure out how to further address the retirement cost issue.
Meanwhile, Quinn’s own budget projections show a bleak future without the tax increase: the state is expected to be $818 million in the red when major portions of the tax hike are set to expire in 2015. Kraft wouldn’t say if Quinn supports extending the increase, saying that’s a debate for the 2014 campaign.Copyright © 2015, The Baltimore Sun