Illinois Ends Budget Standoff, Ups Income Tax Rate 32%
It was nation's longest fiscal impasse since the '30s
By Newser Editors and Wire Services
Posted Jul 7, 2017 6:05 AM CDT
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Rep. Greg Harris passes out cookies to Rep. David Olsen, left, and Rep. David McSweeney before the start of a special session at the Capitol in Springfield on Thursday.   (Rich Saal)
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(Newser) – The Illinois House voted to override Gov. Bruce Rauner's vetoes of a budget package, giving the state its first spending blueprint in more than two years and ending the nation's longest fiscal stalemate since at least the Great Depression, the AP reports. Thursday's action eases some financial woes, but it's fueled by a permanent 32% increase in the income tax rate, raising $5 billion more annually, and it reduces spending by more than $2 billion. Illinois is staring down a $6.2 billion annual deficit and $14.7 billion in past-due bills. Lawmakers, culminating two straight weeks of a special session that began ahead of the July 1 start of the fiscal year, approved the bill to raise taxes by a 71-42 vote. A plan to spend $36 billion in the fiscal year that began July 1 was approved 74-37; an override requires 71 votes.

The income tax increase means individuals will pay 4.95% instead of 3.75%; the corporate rate jumps to 7% from 5.25%. The standoff, which GOP Rep. David Harris called "immoral," had had statewide effects, with road construction work shut down and public universities cut to the bone. "Today, Republicans and Democrats stood together to enact a bipartisan, balanced budget and end a destructive, 736-day impasse," said Democratic House Speaker Michael Madigan, who had to call upon previously reluctant Democrats to keep the veto-override supermajority intact. Rauner had rejected the budget plan because he saw no indication the Democratic-controlled Legislature would send him the "structural" changes he has demanded, including a statewide property-tax freeze. The vote to override is "another step in Illinois' never-ending tragic trail of tax hikes," Rauner said in a statement.

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