Saturday, July 11, 2009
 
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Quinn to shelve tax increase proposal until fall

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[July 11, 2009]  SPRINGFIELD (AP) -- Gov. Pat Quinn said Friday he is shelving his proposal for a major tax increase until November in an effort to end budget gridlock at the state Capitol and provide time to build support for the increase.

InsuranceIn an interview with The Associated Press, Quinn said he planned to speak next week with lawmakers about passing an unbalanced state budget that includes significant spending cuts. Then, in November, he would ask lawmakers to choose between balancing the budget by cutting even further or by raising taxes.

"There's a fork in the road here. When we come to that time, the decision will have to be made," the Chicago Democrat said. "My own view would be that we should pass revenue and not have cuts that are harmful to the public interest."

Illinois faces a budget deficit of roughly $11.6 billion, the worst in state history. The governor had proposed filling that by cutting spending and increasing income taxes to 4.5 percent, up from 3 percent now.

 

But Republican lawmakers, along with some Democrats, balked at the proposed tax increase. The Legislature ended up passing a budget that slashed spending by billions of dollars. It protected education and Medicaid from most of the cuts and focused the reductions on state grants -- such as payments to local groups that provide child care, drug treatment and counseling for abuse victims.

Quinn vetoed that measure, saying it offered "scorched-earth" spending levels for the state's sick and needy.

His move Friday to back off the proposed tax increase is the latest in a series of compromises Quinn has made as he struggles with lawmakers to reach a budget agreement. Already, he has abandoned efforts to collect more pension money from government employees, dropped his demand the tax increase be permanent and backed away from threats to slash human services if lawmakers approve roads, bridges and schools.

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"We want everyone to understand that jobs, jobs and jobs are our mission," Quinn said.

Legislative leaders indicated they would consider Quinn's new proposal, saying they were glad to see him bend on his tax demand.

"Of course I think we need to hold off because I think there's a whole lot we need to do," said House Minority Leader Tom Cross, R-Oswego.

His latest budget proposal isn't all that different from what the Legislature passed and he vetoed. Many lawmakers said that stripped-down budget provided money to keep government operating and could be revised later if officials came to some agreement on boosting revenue.

Without providing specifics, Quinn said his new budget would propose spending less money than his original proposal but more than lawmakers had approved.

Between now and November, officials could study ways to cut spending for Medicaid, pensions and other programs. Quinn said that would demonstrate that leaders are serious about cutting costs wherever possible and provide time to see how initial budget cuts -- including 2,600 state layoffs -- are working. Then lawmakers could make a more informed decision about whether to raise taxes.

[Associated Press; By CHRISTOPHER WILLS]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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