Quinn: Extending Income Tax Hike is ‘Tough Choice’
SPRINGFIELD, Ill. (AP) – Gov. Pat Quinn knows trying to make the state’s temporary income tax increase permanent will be a “tough choice” for Illinois lawmakers, but the issue could be even tougher for voters who’ll decide if the Chicago Democrat gets another term.
Extending the tax increase which is scheduled to roll back in January, leaving a roughly $1.6 billion revenue hole is politically unpopular. When Quinn revealed his stance during Wednesday’s budget address, business groups, Republicans and his gubernatorial challenger Bruce Rauner pounced, blasting the governor and the tax plan.
Still, there are signs it could work in Quinn’s favor. Unions support the plan, and top Democrats say they would support the idea. Quinn says it’s a chance for Illinois to get on solid financial footing after years of problems.
“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 in the roughly 30-minute address before lawmakers. “Cuts that will starve our schools and result in mass teacher layoffs, larger class sizes and higher property taxes.”
Quinn tied his push for extending the increase to relief for homeowners, saying he’d like to guarantee every Illinoisan who pays property tax a $500 annual refund. He also used his budget address to call for increasing the earned income tax credit for low-income families.
The ideas echo his election year themes of focusing on middle class and low-income Illinoisans during a campaign that has focused heavily on union influence and big money. Rauner, a Winnetka venture capitalist, has raised and spent millions in his first run for office.
Rauner has run ads saying Quinn has broken promises. He and fellow Republicans accused Quinn of going back on his word because the roughly 67 percent income tax increase approved in 2011 was billed as temporary.
“After five years of Pat Quinn’s failed leadership, we have record tax hikes, outrageously high unemployment, massive cuts in education, and there’s still a giant budget mess in Springfield,” Rauner said in a statement. “We can balance the budget without more tax increases, if we create a growth economy, and restructure and reform our broken government.”
Quinn faces a difficult sell because voters don’t like the idea of an increase.
A poll this week by the Paul Simon Public Policy Institute at Southern Illinois University showed more than half of Illinois voters prefer cutting existing spending over approving new revenue, though about 28 percent said it should be a combination of the two. The survey interviewed 1,001 registered voters by phone from Feb. 12-25. The margin of error was plus or minus 3.5 percentage points.
Still, some Democrats credited Quinn who vowed not to institute new taxes affecting “working people” with taking a bold step.
“I would commend the governor for his political courage and honesty, unlike previous governors,” House Speaker Michael Madigan told the public television show Illinois Lawmakers. “He told the truth. He laid the cards on the table. If we wish to continue to provide the level of services we’ve become accustomed to education and other services, then the tax increase should be extended.”
Madigan said he planned to call the extension for a vote. Lawmakers must approve a budget for the new fiscal year, which starts July 1, by the end of May.
Quinn, who is seeking a second full term, played down the call for extending the tax increase during the speech, referring to it as “maintaining” current rates. For weeks, he had been mum about what he’d planned to propose. The push to make the tax increase permanent comes as Illinois is also grappling with billions of dollars in unpaid bills, a low credit rating and uncertainty with the state’s pension debt.
Quinn briefly recapped his signing of a landmark pension overhaul, which he’s called one of his biggest accomplishments. But the proposed budget won’t contain the estimated savings. The overhaul that cuts benefits for state employees and retirees is undergoing a legal challenge by unions that contend it’s unconstitutional.
Republicans, who’ve vowed to fight the extension of the tax increase, said they had hoped for Quinn to address the state’s issues.
House Republican Leader Jim Durkin called Quinn’s speech “rhetoric” that didn’t mention how to combat high unemployment.
“I would have hoped to have heard something of how we can do that, how we can turn that tide other than we’re going to tax, tax, tax,” he said. “I don’t believe that we can tax our way to prosperity.”
Associated Press writers Kerry Lester, John O’Connor and Chacour Koop contributed to this report.
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