Ill. gov. faces 'greatest crisis of modern times'

[March 20, 2009]  SPRINGFIELD (AP) -- Gov. Pat Quinn is asking lawmakers to significantly hike the state's income tax as Illinois grapples with what he calls the "greatest crisis of modern times."

The tax increase is necessary to close a $11.5 billion deficit and part of a broader plan to reform state government, Quinn told the General Assembly on Wednesday.

He said Illinois also needs to limit government spending, overhaul state pension systems, repair crumbling roads and bridges, and fight public corruption.

"To be direct and honest: Our state is facing its greatest crisis of modern times," Quinn told lawmakers in formally presenting his budget. "Pass this budget and let's begin a new era of reform, responsibility and recovery."

Thunderous applause greeted Quinn before he made his first major address since replacing ousted Gov. Rod Blagojevich. "I hope you're applauding at the end of this speech," he said, acknowledging that many lawmakers wouldn't like what he was going to propose.

They applauded, but reactions afterward ranged from tentative support to open hostility.

His proposal includes not only the first income tax increase in Illinois in 20 years -- to 4.5 percent from the current 3 percent -- but also a $1-a-pack increase in cigarette taxes, higher business taxes and steeper fees for car registrations and driver's licenses.

Some of that money would pay for a statewide program to replace crumbling roads, bridges, schools and transit systems. The construction would support 340,000 jobs, Quinn said.

Eager to show that he also wants to cut spending, Quinn said he has trimmed about $500 million from the current budget and would cut another $800 million in the upcoming budget. He's asking state employees to take pay cuts and proposing lower retirement benefits for future government workers.

Democratic legislators were open to Quinn's ideas, but they predicted changes in the tax increases and which taxpayers are hardest hit. They also said Quinn must show the public that taxes are a last resort.

"I think Illinoisans want to know, 'Before you raise my cost of living, what are you going to do to clean up Illinois government? What are you going to do to reform it? What are you going to do to fumigate that government?'" House Speaker Michael Madigan, a Chicago Democrat, said during an appearance on public television.

Critics of Quinn's proposal attacked from two different directions.

Unions representing teachers and state employees complained that he's unfairly asking workers to bear the brunt of cleaning up a financial mess they didn't create. They would have to take four unpaid days off, pay more for their health and retirement benefits, and continue doing their jobs under difficult conditions -- for instance, working in prisons that don't have enough guards.

Meanwhile, Republicans argued Quinn should cut government spending even further and demand more from employees.

"I can't go home to my constituents and say, 'Sorry, you're just going to have to send money to the same old broken-down system.' There's other things that need to happen first before we address the issue of tax increases," said Senate Minority Leader Christine Radogno.

Quinn promised to keep cutting, even saying he will appoint a "Tax Accountability Board" to scour the budget. But he also challenged anyone asking for massive cuts -- which he labeled "mean-spirited tactics" -- to come up with specific proposals.

"Put it out there. Let us all see it, hear about it, look at it," Quinn said. "Saying 'no' is not enough unless you are willing to speak the truth and offer real alternatives."

Although his focus was on the state's financial crisis, Quinn also talked about an ethics crisis, noting that Blagojevich faces criminal charges and former Gov. George Ryan is in prison.

He called for giving Illinois voters the power to recall corrupt officials and described his efforts to keep government bureaucrats from withholding documents from the public.

"Many serious problems have resulted from this bipartisan betrayal of the public trust," he said. "Our government has an integrity crisis, and Illinois must embrace far-reaching ethics reform."

[Associated Press; By DEANNA BELLANDI]

Associated Press writers John O'Connor, Christopher Wills and Andrea Zelinski contributed to this report.

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