Gov. Pat Quinn and ruling Democratic lawmakers united Wednesday around what they say is a stark election-year choice — vote now to make permanent the temporary income tax increase they installed three years ago or face major cuts in state spending on education and social services.
But Republican governor candidate Bruce Rauner and GOP lawmakers who are a minority in the General Assembly flatly rejected the way Quinn framed the debate in his budget speech at the Capitol. Calling his plan a blatant money grab, they argued that the only course of action was to begin rolling back the 67 percent tax increase as scheduled in January 2015.
The sharp contrast presented a clear option for voters as the fate of the tax increase takes center stage in the campaigning leading up to the Nov. 4 election — with the potential to influence not just the race for governor but contests up and down the ballot.
House Speaker Michael Madigan and Senate President John Cullerton, both Chicago Democrats, each voiced support for making the levy permanent, injecting the volatile tax issue into electoral contests in which Democrats hope to maintain overwhelming legislative majorities.
Quinn, seeking re-election to a second term after taking over from the impeached Rod Blagojevich in 2009, noted the upcoming election campaign in his 25-minute post-primary budget address without singling out Rauner by name.
“The truth is, those who are telling you that Illinois can tax less and spend less and still expect to fund education are simply not telling you the truth,” Quinn said in a pointed reference to Rauner, who has sought to appeal to voters as a longtime education advocate.
“Today, I propose that we take the path that is honest and responsible, the path that protects everyday families and invests in their future,” he said.
But in calling for making the tax increase permanent, Quinn played into a consistent attack line of Rauner, who even before winning the GOP nomination for governor last week had labeled the Democratic governor's tenure as a litany of broken promises.
“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. “It's now or never to save Illinois. We can balance the budget without more tax increases, if we create a growth economy and restructure and reform our broken government.”
Rauner backs the scheduled rollback of the personal income tax and has called for a comprehensive overhaul of state tax policies with an eye toward making them more beneficial to business. However, he has not been specific about any other tax changes or how he would make up for the estimated $4 billion in annual revenue lost to the state with the rollback of the tax. He did not make himself available to answer questions Wednesday.
In unveiling what he said was a comprehensive five-year spending plan, Quinn said he was rejecting “any new, unfair taxes,” such as broadening the state's sales tax to include services, or taxing retirement income.
Quinn said extending the income tax would support a $38.6 billion general fund account for the coming year that he would use to provide more money to schools, tuition grants to low-income college students and a new initiative to provide wellness efforts and early childhood learning for children from birth to age 5.
At the same time, Quinn presented a “not recommended” budget that would allow the bulk of the income tax to sunset on schedule. The $34.9 billion general fund alternative, he warned, would lead to massive teacher layoffs and loss of social services such as child care and community care services while forcing local property taxes to increase.
Madigan said Quinn “told the truth” in his budget speech.
“He laid the cards on the table. If we wish to continue to provide the level of services which we've become accustomed to for education and other purposes then the income tax increase should be extended,” Madigan said during a public television interview, adding, “My demand as part of this program is relief for homeowners on their real estate taxes.”
The House speaker also said he favored a “broad-based” tax bill that also provides “help for Illinois businesses.” Asked about the likelihood of a vote before the general election, Madigan said, “My expectation is that we'll resolve this before the end of the spring session, which is the end of May.”
Republicans argued that Democrats failed to deliver on their promise to use the tax increase to help restore the state to fiscal solvency and thus don't deserve another chance to lead.
Sen. Matt Murphy, of Palatine, a GOP point man on budget issues, said Democrats created “as dire-looking a picture as possible to justify continuing to take more taxpayer money.”
“They seem desperate to make this look so bad that there's no reasonable way for this tax rate to go back down,” Murphy said.
He said Quinn's proposal to roughly double the current amount of overall property tax relief is equivalent to a $600 million “kickback” that would raise the overall amount of state relief for homeowners to more than $1.2 billion a year.