Ill. House passes major tax increase

January 11, 2011 8:30:04 PM PST
The Illinois House passed a major income tax increase Tuesday night.

If the state Senate approves the bill, it would set the personal tax rate at 5 percent, up from 3 percent. That would be a 66-percent jump. Corporate taxes would also go up.

It would be the largest income tax increase in state history.

The bill has gone to the Senate, which was expected to meet late Tuesday night.

Supporters have until noon Wednesday to try to get the bill approved by the Senate before a new legislature is seated.

The debate brought to a head at least two years of frustration over how to resolve the state's now $15 billion deficit.

"It's time for us to be adults, face the crisis, and figure out together a solution," said Rep. Barbara Flynn Currie, (D) Chicago.

"We're saying to the people of the state of Illinois, for eight years we've overspent. Now we're going to make it your problem," said Rep. Roger Eddy, (R) Hutsonville.

The bill passed 60-57, the narrowest victory margin put together by longtime Illinois House Speaker Michael Madigan, (D).

"I'm happy the day has ended. It is very nice of all of you to be around," Madigan told reporters.

The bill increases the personal income tax from 3 to 5 percent and the corporate rate from 4.8 to 7 percent.

Opponents argue that recession-stressed workers and businesses cannot afford it and the state tax increase will offset recent federal tax cuts.

"The average Illinois family would have saved about $800 in taxes. That's essentially wiped out now if this does become law," said John O'Hara, Illinois Policy Institute.

No Republicans voted for the tax increase. They were joined by a handful of Democrats.

"I thought we should make more cuts before we go back to the taxpayers of our state and ask for more money," said Rep. Harry Osterman, (D) Chicago.

But the rest of the Democrats towed the line for Speaker Madigan and could pay a political price in their home districts.

"I'm going to have to be held accountable. But that's part of the job. And anyone can do this stuff when it is easy. But this was the time to step up and, again, try to be a problem solver," said Rep. Michael Zalewski, (D).

The Illinois Senate was scheduled to reconvene Tuesday night to pass the House's version of the bill. A debate was expected, but there appeared to be plenty of votes to pass the tax bill in the Senate.

In the other legislative chamber state senators voted to abolish the death penalty in Illinois.

The death penalty vote in the Senate Tuesday afternoon was historic. The question now is whether or not Governor Pat Quinn will actually sign the bill.

Also on Tuesday, the House voted down a bill to increase the cigarette tax by $1.01 per pack.