Quinn wraps up first budget speech; focus now turns to legislature

State Capitol Bureau

12:50 p.m.: Quinn wraps up first budget speech

Gov. Pat Quinn wrapped up his speech by talking about two issues he speaks often of - veterans and Abraham Lincoln.

Quinn honored the family of a Marine captain killed six years ago in Iraq. He's pushing to fully open a veteran's home in LaSalle and a $17 million increase to expand a Chicago veterans home and expand a health care program for veterans.

Quinn thanked Illinoisans for their warm welcome of him since taking office for impeached Gov. Rod Blagojevich on Jan. 29.

He noted the challenges facing the state now mirror what Lincoln battled in his time and said Illinoisans should deal with these issues as Lincoln did: with humor, grace and wisdom.

"It's time to make the will of the people the law of the land. So help us God. Thank you very much," Quinn said to loud applause from lawmakers.

State Capitol Bureau

12:45 p.m.: Quinn turns to good news

After the bad news, Gov. Pat Quinn is now finishing his speech on the good parts of his budget plan.

He's touting lowering the payment cycle for health care providers from about 90 days to about 30 days. Quinn is pledging more than $210 million for K-12 education and colleges and universities in increased cash.

"We're not cutting back on education," Quinn said.

State Capitol Bureau

12:40 p.m.: Quinn pushes construction plan

Gov. Pat Quinn says he wants to do more than just build roads and schools. He's pushing for high-speed Internet - "Everybody in, nobody left out" - and making sure major construction projects are energy-efficient and sustainable.

"We need a green way of thinking and a green way of acting," Quinn said to applause.

He's asking lawmakers to quickly pass his "Illinois Jobs Now" construction program to put economic recovery into action.

 "Our recovery depends on you," Quinn said.

State Capitol Bureau

12:35 p.m.: Quinn derides 'doomsday budget'

Gov. Pat Quinn calls any plan that calls for laying off teachers, kicking thousands of seniors off state services and laying off hundreds of State Police officers a "mean-spirited doomsday budget."

"I don't believe that the people of Illinois support a harsh and mean-spirited doomsday budget. That is not what the Land of Lincoln is all about," Quinn said to legislative applause.

Quinn noted his goal is to put just about everyone to work.

"If you're able-bodied and you're breathing, we want you working in Illinois," Quinn said to some laughter. "We must get back to work and fast."

He's pushing to raise driving-related fees to fund a $26 billion construction program that would create or ensure jobs for about 340,000 people statewide.

State Capitol Bureau

12:35 p.m.: Quinn rejects gas taxes, gambling expansion

Gov. Pat Quinn rejects raising gas taxes, putting a major tax increase on business or expanding gambling to fix the budget mess.

"I think that's a bad bet," Quinn said.

He again pressed critics to do more than just reject his ideas.

"Saying no is not enough, unless you are willing to speak the truth and offer real alternatives," Quinn said.

Quinn also tipped his hat to the governor's mansion, saying it's a great house with great food.

State Capitol Bureau

12:30 p.m.: Quinn issues tax challenge

Gov. Pat Quinn says he's closing millions of dollars of "unfair corporate tax loopholes," but isn't specifying what they are.

"Together, we will plug this gaping budget deficit of $11.5 billion," Quinn said to legislative applause.

Quinn also issued a warning to lawmakers who reject his revenue-generating ideas.

"No plan is perfect," Quinn said. "But if you reject needed revenue increases to balance our budget, then you must tell the people of Illinois what you will do instead."

That drew loud applause and cheers from Democrats in the legislature.

State Capitol Bureau

12:25 p.m.: Quinn pushes tax increase

Gov. Pat Quinn is pushing for an income tax increase to help close the $11.5 billion budget gap.

He notes health care and social service providers are owed billions of dollars in overdue payments from state government.

"This is wrong. We know it's wrong. It's not a blueprint for sound fiscal or public policy," Quinn said.

Lawmakers applauded his idea to give a tax break to five million Illinoisans who make low enough incomes to avoid higher taxes under his plan, as well as his proposal for a sales tax "holiday" on school supplies this summer.

His income tax plan would add 50 percent to the current rate but tie in a tripling of a tax break to put most of the burden on families of four who make $60,000 a year or more.

"There's something wrong when Illinois gives more tax breaks to those who raise thoroughbred horses than to families raising children," Quinn said to legislative applause.

State Capitol Bureau

12:20 p.m.: Quinn: New pension plan would lead to massive savings

Gov. Pat Quinn says lawmakers can save the state $162 billion by creating a new pension system for new hires.

"By enacting ground-breaking public pension reforms, we can and we will reduce future payments," Quinn said.

He's also proposing smaller payments now, cutting from more than $4 billion to about $1.5 billion the payment the state would make into the debt-loaded systems next year.

Quinn notes his plan would protect current retirees and employees and save billions of dollars in future costs.

"That's a good deal for everyone," Quinn said.

The governor also renews his call for voters to have the power to recall public officials "if they betray the public trust."

State Capitol Bureau

12:15 p.m.: Quinn says government not immune from tough times

Gov. Pat Quinn said he hopes lawmakers give him the same warm reception after he delivers his bad news to them today.

"I hope you're applauding at the end of this speech," Quinn said as lawmakers gave him a standing ovation.

The governor didn't sugarcoat his initial comments. He noted Illinois is still reeling from the legal troubles of his two predecessors, and he's emphasizing three Rs in this speech - reform, responsibility and recovery.

"In tough times, everyone, everyone must live within their means. And that goes for government, too," Quinn said.

Quinn said he's making $1.3 billion in budget cuts, including four furlough days for most state employees and across-the-board reductions in grant programs.

"I pledge this is only the beginning of the belt-tightening," Quinn said.

State Capitol Bureau

12:10 p.m.: Quinn begins first budget address

Gov. Pat Quinn has started his budget address in the House chamber at the state Capitol.

Quinn received a warm reception as he entered the chamber from lawmakers of both parties and both chambers. But that mood could soon sour as he details the painful choices he'll ask lawmakers to make.

Income tax increases, driver's fee hikes, employee furlough days and other cuts are all part of his plan to close a historically large $11.6 billion budget hole.

State Capitol Bureau

10:10 a.m.: Quinn's first budget calls for higher taxes, fees

Less than two months after taking office, Gov. Pat Quinn is laying out a painful mix of increased taxes and fees with some sweeteners today in his budget speech to lawmakers to close a historically large $11.6 billion budget hole.

In his $53 billion spending plan, Quinn is calling for a 50 percent increase in state income taxes for residents and businesses, higher pension and health insurance costs and unpaid work days for state employees and driver's fee increases.

In exchange, he's proposing tripling a tax break to cushion the income tax increase blow for about five million Illinoisans and creating a 10-day sales tax break on school supplies in late August.

"It calls for every type of solution. That is what this budget does. This plan makes tough decisions, while maintaining our commitment to our priorities and, more importantly, it protects our most vulnerable citizens," Quinn wrote in a letter to lawmakers in presenting his budget.

Here's a closer look at some of his proposals.

_Quinn's plan calls for increasing the individual income tax rate from 3 percent to 4.5 percent, and the corporate income tax rate from 4.8 percent to 7.2 percent. That will generate more than $3.2 billion in new cash.

_He wants to save nearly another $3 billion by next year, and nearly another $3 billion in the following year, by creating a slimmer pension system for new state hires and using the long-term savings from that change to cut the state's current pension payments.

_Increased driver's license, vehicle registration and other driver-related fees, along with money from the state's Road Fund, would help pay for a $26 billion program for road and school construction projects statewide.

_Families of four who make less than $60,000 a year would see lower taxes, while those making more would pay more, under Quinn's plan to triple the personal exemption on income taxes to $6,000 per person.

_State spending would be cut by $1.3 billion, with most state employees asked to take four furlough days and pay more for health insurance and retirement benefits.

_Cigarette taxes would nearly double over the next two years, to just under $2 a pack.

_K-12 education and colleges and universities would get small funding increases, totaling about $215 million combined.

State Capitol Bureau