[Bumped up for visibility]
*** UPDATE 6 - 6:36 PM *** They’re gonna skip pension payments…
The governor also will propose $850 million in additional state cuts and make a potentially hefty cut in the state’s pension payment, while proposing a scaled-back pension plan for new state hires. Quinn aides would not provide more specifics on those plans.
*** UPDATE 5 - 4:18 PM *** Right on cue…
Former Illinois Gov. Rod Blagojevich released the following statement on the proposal from Gov. Pat Quinn to raise the state income tax:
“This is exactly what I said was going to happen. It is unconscionable that the new governor, Pat Quinn, wants to raise the income tax by 50% especially at a time when people are hurting and the economy is in shambles.
“When Pat Quinn and I ran as a ticket we promised the people not to raise their income taxes. For six years I kept that promise. It took him less than six weeks to break it.”
Former Gov. Blagojevich is not available for interviews and will not be making any other public statements today.
*** UPDATE 4 - 4:02 PM *** I told subscribers about this new $11.5 billion deficit estimate in late February, and recently pointed out the crashing income tax numbers, but this is still astounding…
The state’s budget hole has grown to an estimated $11.5 billion — “an unprecedented tsunami of red ink” — aides to Gov. Pat Quinn disclosed Friday afternoon as the new governor began to sketch out how he proposes to fix the state’s financial woes. […]
At the same time, while promising that Mr. Quinn will unveil $1.3 billion in proposed spending cuts when he introduces his fiscal 2010 budget on Wednesday, they and Mr. Quinn in an earlier appearance confirmed that a state income-tax hike definitely is on the way.
Officials said the tax increase, of unspecified size, would be paired with a tripling of the personal exemption, a combination that would freeze or cut taxes for a family of four if it earned no more than about $60,000 a year, but would require those in higher income brackets to pay more. […]
Over fiscal 2009 and 2010 combined, state revenues from individual and corporate income taxes and the sales tax are projected to be off a projected $3.2 billion — an “unprecedented” decline, according to Mr. Stermer.
At the same time, he said, Medicaid will cost the state an additional $1 billion or so in fiscal 2010, which begins on July 1, higher social services will cost taxpayers an additional $300 million, scheduled employee wage hikes and group health insurance another $300 million, and employee pensions potentially well over $1 billion, depending on possible cost savings..
*** UPDATE 3 - 2:12 pm *** From the AP…
Quinn wouldn’t give specific details Friday on the income rate or personal exemption levels he plans to propose.
But he did give a hint about who would be affected by any tax increase. The governor says a family of four making less than about $57,000 a year won’t see its taxes go up. The less money people make, he says, the more of a tax cut they’ll see.
*** UPDATE 2 - 1:47 pm *** The governor’s comments…
“There will be some that will have a higher tax burden,” Quinn told reporters today during an impromptu news conference at the James R. Thompson Center, adding it would be based on the ability to pay. Quinn said an increase would be part of a “fundamental reform” of the income tax system that would provide tax relief for many Illinoisans. He said that would come from more generous tax exemptions for working families who are suffering amid the nation’s economic decline.
*** UPDATE 1 - 12:38 pm *** From CBS2’s Twitter page…
Gov. confirms taxes will go up for folks earning above 56k in Illinois.
[ *** End of Updates *** ]
* This possible tax hike isn’t as much as some thought, especially considering the higher exemptions…
Gov. Pat Quinn is considering raising the Illinois income tax by 50 percent in a politically risky bid to address one of the biggest budget dilemmas in state history, sources said Thursday.
An increase to 4.5 percent from the current 3 percent tax rate on individuals would include a corresponding hike in the corporate income tax on businesses, according to sources familiar with the new governor’s preparations for his first budget address Wednesday.
The first state income tax increase in 20 years would be cushioned in part by raising the standard tax exemption up to $6,000 per person from $2,000, the sources said. […]
Fee increases for license plate stickers and driver’s licenses are also under consideration by Quinn, sources said. The governor has also emphasized he wants to “cut, cut, cut” state government.
* Meanwhile, my Sun-Times column today is also about the tax issue…
‘I think this economy makes it almost impossible to place an income tax increase on people.”
What Illinois politician said that this week?
Rod “No Tax Hikes on People, But I’ll Gladly Take Your Bribe” Blagojevich?
A Republican?
A conservative “Blue Dog” Democrat?
Nix, nein Frankenstein, as we used to say in Germany.
The answer: Attorney General Lisa Madigan, talking to the Aurora Beacon News.
Has Congressman-in-waiting Mike Quigley’s winning campaign strategy of bashing Todd Stroger’s tax increase spread to the staid, soft-spoken, liberal attorney general?
This is the same Lisa Madigan, after all, who fumed at Rod Blagojevich last year for vindictively slashing her office’s budget to the marrow. Now, she wants every other state agency subjected to the same cruel slash?
After waiting around all day for a response, Madigan’s spokeswoman finally called to explain that her boss really meant to say all other options should be looked at before any tax increase was proposed.
That’s not what she said, but whatever.
So, I asked, does Lisa Madigan support a tax hike?
“She’s waiting to hear what the governor proposes in his budget address next week.”
Is she open to a tax hike?
Same answer.
The message seems to be clear, however. She’s reserving the right to bash Gov. Quinn for raising taxes during an economic downturn.
Tax-increase foes have valid economic points, but too many fail to see the plain, hard facts.
There are those who say that the state’s budget deficit is about half or even less than half of the $9 billion to $12 billion estimated by Comptroller Dan Hynes and Quinn. All we need to do, they say, is cut $4 billion to $5 billion this fiscal year and again next fiscal year and the problems are solved. Poof.
What those folks never mention is that there are about 100 days left in the current fiscal year. Cutting $4 billion to $5 billion by June 30 would require turning out all the state’s lights. Open up the prison doors, lay off all the cops, no school payments, no Medicaid, no driver’s license facilities, no parks, no road repairs, no aid to local governments, no attorney general . . . no nothing, except for a skeleton crew to process our tax payments. And that still probably wouldn’t be enough.
We simply cannot cut our way out of this deficit. We shouldn’t fully tax our way out, either, of course. Real cuts should be made. But there are no magical solutions, and Lisa Madigan most certainly knows it.
This week, the two Republican state legislative leaders called for more gaming to fund a multi-billion-dollar capital construction program. It’s a pipe dream.
Quinn is widely expected to propose an income tax increase to help balance the budget, so Madigan’s tax comment was probably predictable. Madigan can sit back and let her father, House Speaker Michael Madigan, push through Quinn’s tax increase and then reap all the populist benefit.
But Madigan in the role of the angry white tax-hater and lifelong populist Quinn as the bumbling Strogerish incumbent?
Seriously?
Well, Blagojevich did win his first election as a reformer, so I suppose anything’s possible with enough campaign money.
I just can’t see it. And I sure hope Madigan doesn’t try.
…Adding… I just noticed that something got cut for space. It was a couple sentences after “This week the two Republican state legislative leaders called for more gaming to fund a multi billion dollar capital construction program. It’s a pipe dream.” Here’s what was edited out…
MGM spent almost a billion dollars to put a casino in downtown Detroit a couple of years ago. Those days are over. MGM’s stock price has lost 90 percent of its value since last summer and the company is in danger of defaulting on its debt. MGM is far from alone in the industry.
* Related…
* Illinois Republicans call for more gambling to raise revenue
* Quinn says he’ll push to boost education funding in Illinois
* Illinois governor tells teachers he’s with them
* Quinn pushing for overhaul of state’s tax system
* U of I assembles budget forecasting model