Illinois House overrides Rauner veto of tax hike
The Illinois House voted today to override Gov. Bruce Rauner’s veto of a state budget that proposed a massive hike in the state income tax.
Under the tax hike proposal, residents and business will see a 32 percent increase in their income taxes. Individual taxpayers will pay 1.55 percent more, raising their state income tax from 3.75 percent to 4.95 percent. Businesses and corporations will pay 1.75 percent more in taxes, increasing the tax rate from 5.25 percent to 7 percent.
The tax hike is retroactive to July 1, 2017.
Last week, Rauner vetoed the tax plan but the House voted 71 to 42 to override the Governor’s veto with 10 Republican legislators joining Democrats to back the budget and tax hike plan.
The override and adoption of the budget with the tax hike was praised and condemned. Officials of the Illinois Manufacturer’s association denounced the Override, while Chicago Mayor Rahm Emanuel praised the state’s action.
Mayor Emanuel praised Senate President John Cullerton and Illinois House Speaker Michael J. Madigan for passing the budget and bringing together a coalition of Democrats and Republicans to achieve an override vote.
“Like so many others across the state, I wish the governor had been willing to actually compromise at some point in this process because the only thing his my-way-or-the-highway approach has gotten Illinois is nearly three years of gridlock and $15 billion in unpaid bills,” Mayor Emanuel said in a press release.
“Thankfully, today’s bipartisan, balanced budget is the first step in bringing stability and certainty back to Illinois and putting our state back on track.”
Greg Baise, President and CEO of the Illinois Manufacturers’ Association, issued this statement on the budget Veto Override:
“Illinois lawmakers ignored reality today and drove another nail in the coffin of job creators. Imposing a five billion dollars tax hike on Illinois families and businesses without addressing the root causes of our stagnant economic growth is a recipe for disaster and will only hasten the further loss of Illinois’ middle class. The General Assembly refuses to recognize the lasting damage they are causing our economy by failing to address Illinois’ downward spiral. Our members are frustrated and angry today because of the abject failure to help make Illinois more attractive for job creators. Higher taxes and additional regulations such as a minimum wage hike and paid leave will not create jobs or help grow the economy,” Baise said.
“Since the end of the recession, Illinois has shed thousands of good, high-paying manufacturing jobs while all of our neighboring states have added tens of thousands of new jobs. For more than a year, the IMA has called on lawmakers to enact a five-point Middle Class Manufacturing Agenda.”
Baise said that the legislature failed in key areas:
- Restore fiscal integrity and reign in the crushing pension debt
- Reform the Illinois tax code
- Provide property tax relief to businesses and families
- Enact real and meaningful economic development reforms including workers’ compensation changes
- Strengthen the education and workforce system to invest in human capital
“Rather than address these critical changes that will help reverse Illinois’ downward trajectory, Illinois lawmakers doubled down on failed policies of the past and increased taxes on a shrinking sector of the economy rather than reforming and modernizing the tax code. The General Assembly failed to reduce the property tax burden that is among the highest in the nation, particularly in Cook County where politicians continue to manipulate the system and force higher costs onto the commercial and industrial sector,” Baise said.
“Lawmakers protected wealthy trial lawyers, union leaders, and the medical community that all feed off the workers’ compensation system. Illinois has the 8th highest cost in the United States and is often cited by manufacturing companies as the deciding factor when they leave the state. Lawmakers did not even ask representatives of wealthy trial lawyers, labor leaders, and the medical community to engage in any serious conversations about improving the system and reducing costs.”
Baise added, “Today’s action by the Illinois legislature will speed up the loss of manufacturing jobs and will further decimate our economy.”
The Illinois Manufacturers’ Association is the only statewide association dedicated exclusively to advocating, promoting and strengthening the manufacturing sector in Illinois. The IMA is the oldest and largest state manufacturing trade association in the United States, representing nearly 4,000 companies and facilities.
Illinois Republican Party Chairman Tim Schneider released the following statement after the Illinois House of Representatives overrode Governor Rauner’s veto of Speaker Madigan’s permanent 32% tax hike:
“I am deeply disappointed in the Illinois General Assembly’s vote to override the Governor’s veto of Speaker Mike Madigan’s permanent 32% tax hike. Passing a 32% tax increase on the hard-working families of Illinois without any semblance of reform is absolute insanity. It hasn’t worked before, and it won’t work now,” Schneider said.
“I am extremely troubled by the decision of 10 Republicans to again stand with Mike Madigan. Republicans in Illinois fought Madigan’s machine in 2014 to elect Gov. Rauner and won. In 2016 we beat Madigan again and made historic gains in the House and the Senate. After all we have accomplished together, it is astonishing that these legislators would now turn their backs on taxpayers across the state. I am confident voters will hold those politicians accountable for choosing Mike Madigan over the people of Illinois.”
The Chicago Republican Party also issued this press release on the veto override:
The Chicago Republican Party condemned today’s vote to increase Illinois taxes by 32%, and announced the kickoff of its 2018 candidate recruiting season.
“This tax increase is the opposite of what Illinois needs,” said Chicago GOP chairman Chris Cleveland. “We expect large numbers of candidates to come out of the woodwork in response.”
“We’re recruiting candidates to run in the Chicago area who are fed up with Mike Madigan. We’re going to give voters the chance to say how they feel about having the highest combined tax burden in the country.”
In particular, the Chicago GOP is looking for a candidate to run against Mike Madigan. “Voters are going to get a chance to vote on Bruce Rauner, but they never get a chance to vote on Mike Madigan. Madigan has rigged the system so that he never has a Republican opponent. We’re going to change that,” said Cleveland.
In 2014 and 2016 the Chicago GOP recruited Republican candidates to run in heavily Democratic areas. The candidates and their volunteers knocked on hundreds of thousands of doors, and raised the Republican vote in the city enough to give a boost to Republican candidates for statewide office.
In 2014, the Chicago GOP ran an “American Idol”-style contest to find first-time candidates for office. 150 candidates applied, and were winnowed down to 18 who ultimately received the thumbs-up.
Statement from Congressman Bill Foster:
Illinois has gone three years without a budget. I am grateful that more than a dozen Republicans in the General Assembly joined with Democrats to override Governor Rauner and produce a true compromise.
I am distressed, however, to see the Governor’s continued intransigence. Illinois has tremendous challenges that can only be met when we are all working together. I hope Governor Rauner puts aside his partisan agenda and works to undue the damage he’s done.
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