 But there are serious questions as to whether it will be.The
General Assembly expects to raise more than $6 billion from the 66
percent increase in the flat-rate income tax, from 3 percent to 5
percent. Lawmakers expect close to $1 billion more from an increase
in the corporate income tax that will boost that rate from 4.8
percent to 7 percent.
But lawmakers failed to approve other plans that would have
generated billions more.
The Illinois House could not agree on a borrowing package that
would have raised more than $8 billion to pay down the state's
monstrous backlog of bills. The House also turned down legislation
that would have raised $377 million a year for public schools.
That leaves Illinois with a little more than $7 billion to pay
$6.2 billion in past-due bills and cover the gap in state government
money. That task could be made more difficult by a spending cap in
the tax increase legislation.
Under the spending restrictions, Illinois government would be
limited to 2 percent growth during the next four years. State
spending would be capped at $36.8 billion for the next budget, $37.5
billion in 2013, $38.3 billion in 2014 and $39 billion in 2015.
Senate President John Cullerton, D-Chicago, said if lawmakers or
the governor spend more than that, the income tax increase
automatically ends.
"This is really real," Cullerton said.
But Republicans are quick to say that the 2 percent spending caps
come after a 10 percent increase in state spending. Gov. Pat Quinn's
budget office says state spending in the current budget is $33.5
billion.
GOP leaders also point out that the 2 percent cap builds upon
itself. Even with the spending cap, Illinois government will grow
nearly 17 percent in four years, they said.
Quinn's budget director, David Vaught, said the administration
needs some room for the spending caps. He expects Illinois to have
to pay its multibillion-dollar pension payments and cover the rising
cost of Medicaid in the future.
"Just those two forms of increased spending, that are very
difficult to control, will eat up this spending cap change.
Everything else will have to be flat or decline," Vaught said.
The spending caps, however, do not apply to education, human
services and property tax relief. Quinn also has power to shift
money from pensions or other areas if he believes he needs the
money.
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Senate GOP Leader Christine Radogno, R-Lemont, said that's not
controlling state spending.
"All during (last year's campaign) when we talked about cutting
spending, all it was, was not paying bills. I appreciate the fact
that you're finally admitting that was a big lie," Radogno said.
Vaught defends the spending restrictions as a nod toward reform.
"It's really a huge change in the way we're doing business in the
state," he said. "And it's enforceable."
But legislative critics say plans to spend billions after hitting
up taxpayers for more money is just more of the same.
State Rep. Roger Eddy, R-Hutsonville, attacked a plan from the
governor's office to spend $113 million on new projects even as the
Quinn administration cries poor.
"We don't have enough money to pay for (these projects). To add
$113 million without accounting for every single one of those
additional (projects) in some manner, I think is part of the problem
that we've had for eight years," Eddy said.
Not every Democrat in Springfield voted for the income tax hike
or is on board with Quinn's strategy.
State Rep. Jack Franks, D-Woodstock, said Illinois' unpaid bills
are going to linger, and the state's fiscal health isn't going to
improve much.
"Gov. Quinn got what he wanted," Franks said. "Now he's going to
have to make it work."
Lawmakers rushed to pass the tax increase in the eleventh hour. A
new General Assembly will be sworn in Wednesday at noon.
[Illinois
Statehouse News; By BENJAMIN YOUNT]
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