Quinn's budget includes 50 percent income tax hike
Gov. Pat Quinn's administration confirmed the bad news awaiting Illinoisans in his budget plan Tuesday, proposing a 50 percent income tax increase on residents, and furlough days and higher retirement and health care costs for state employees to fill a whopping $11.5 billion budget hole.
Quinn will deliver that sour message to lawmakers Wednesday when he makes his budget presentation on the House floor, starting at noon.
"People are sick and tired of governors who are not honest with the public," Quinn told reporters after briefing Democratic lawmakers about his budget plan Tuesday evening. "There's very drastic cuts in the state budget. The budget has to be really tightened. Everybody's cutting back."
He wants to raise individual and corporate income taxes by more than $3.2 billion next year, with the individual rate rising from 3 percent to 4.5 percent and the business rate climbing from 4.8 percent to 7.2 percent.
Another $2.8 billion in new cash comes from reducing pension benefits for new state hires, then using that savings to reduce the growing payment the state contributes to the pension systems this year and next.
State spending would be shaved by $1.3 billion. State workers -- other than those who work directly with patients or in public safety – would take four furlough days to save $36 million. Health care insurance costs for employees and retirees would rise by $200 million.
The Illinois Historic Preservation Agency would be folded into the Department of Natural Resources. Quinn will not reopen about a dozen shuttered state historic sites, including the Dana-Thomas House in Springfield, although he had said he was looking to do that.
"We can't do everything we would like to do," Jerry Stermer, Quinn's chief of staff, told reporters in a briefing.
Quinn also is seeking across-the-board reductions of 2 percent in grant programs, except for health care and education, to save $80 million next year.
Quinn's budget details drew criticism from the major state employee's union, which contends it's unfairly balanced on state workers' backs.
Some lawmakers said they were concerned about the mix of budget priorities he was using to fill the historically large budget hole. Others said there may be no choice but to support what Quinn is proposing.
"There are no good choices here at all," said Sen. John Sullivan, D-Rushville. "Without a doubt there will be some voter backlash. We have to raise taxes and cut services. I see no way to avoid that."
Quinn's plan attempts to blunt the pain of the income tax hike on residents by tripling the personal exemption from $2,000 to $6,000 per person. By Quinn's estimate, even with the higher tax rate, families of four making less than $60,000 a year -- or more than five million Illinoisans -- would pay less in income taxes, while those making more would pay more.
He's proposing a 10-day sales tax "holiday" that would lift the 5 percent state sales tax in August on back-to-school purchases to stimulate the economy.
Quinn wants to reduce the time that health care providers wait to be paid by the state, from about 90 days or more now to about 30 days. He also wants to increase school funding by $174 million, with colleges and universities getting an additional $40 million.
The governor will push a $26 billion construction program for roads, schools and other projects statewide. Paying for that would mean increases in driving-related fees, including a doubling of the driver's license fee to $20 and the $79 vehicle registration fee climbing to $99.
Cigarette taxes would more than double to nearly $2 a pack over two years, bringing in about $360 million, Quinn's aides said.
Doug Finke contributed to this report.
Ryan Keith can be reached at 217-788-1518.