Illinois Senate nixes vetoes of budget plan with tax hike

SPRINGFIELD – The Illinois Senate voted to override Gov. Bruce Rauner’s vetoes of a $36 billion budget package Tuesday, including a $5 billion tax increase designed to start digging out of the nation’s longest budget crisis since at least the Great Depression.

The Democratic-controlled chamber completed its work within 30 minutes of the Republican governor’s vetoes, sending the package back to the House for an override vote that would give Illinois its first annual budget since 2015.

The House did not plan to take up the action Tuesday.

“The package of legislation fails to address Illinois’ fiscal and economic crisis – and in fact, makes it worse in the long run,” the first-term governor wrote after his veto of the tax-increase bill. “It does not balance the budget. It does not make nearly sufficient spending reductions.”

Rauner acted about three hours after the Senate voted to hike the personal income tax rate by 32 percent, from 3.75 percent to just under 5 percent. Corporations would pay 7 percent instead of just over 5 percent.

“We are at a moment in time. We are faced today with the fierce urgency of ‘now,’” said the tax increase legislation’s sponsor, Sen. Toi Hutchinson of Olympia Fields. “We don’t have any more time. And too late is not good enough.”

Two senators whose districts include parts of McHenry and Kane counties, Sen. Pam Althoff, R-McHenry and Sen. Dan McConchie, R-Hawthorn Woods, both voted against the tax-and-spending plan, and cited the proposed bailout of more than $418 million for Chicago Public Schools as a major reason for “no” votes.

“We think that while Chicago Public Schools deserve to have support just like any other school district does from the state.” McConchie said, “to put them at the front of the line with a massive bailout for their poorly managed system and put that responsibility in perpetuity on the backs of all Illinois taxpayers is fundamentally wrong.”

McConchie said that although he does not believe his constituents could afford a tax increase, the nearly unanimous support against the tax increase among Republicans is because there are no structural reforms passed to help get the state back on the right track.

Althoff cited a lack of property tax relief for her constituents as a major factor in her “no” vote. She also took issue with the bailout for Chicago Public Schools that she said is unfair for McHenry and Kane county residents.

“There was and continues to be huge efforts to work in a bipartisan and in a collaborative fashion,” Althoff said. “I thought we were extraordinarily close to getting what would have been a more acceptable solution, and it’s just beyond disappointing to know that we didn’t get that.”

State Sen. Karen McConnaughay, R-St. Charles, also voted “no.” She could not immediately be reached for comment Tuesday.

The House approved the tax increase with 72 votes Sunday, one more than necessary, with the help of 15 Republicans. Whether they will continue to defy Rauner remains to be seen. House Speaker Michael Madigan told WICS-TV that there would be no House action Tuesday.

State Rep. Barbara Wheeler, R-Crystal Lake, who voted against the tax increase, said she does not expect any of her dissenting colleagues to change their minds before the override vote she said is scheduled for noon Thursday.

Wheeler likened the Republicans voting in favor of the tax measure to Benedict Arnold, and claimed “they caved.”

“It cut the legs in the negotiating abilities from us, and that, I think, has been the biggest disappointment from taxpayers, that not just our 15 Republican colleagues but from the 72 that vote for a tax increase without reforms,” Wheeler said. “I know my colleagues aren’t going to like it, but I feel betrayed.”

State Rep. Bob Pritchard, a Hinckley Republican, was among the Republicans to vote in favor of the increase earlier this weekend. He predicted the house would not take up the measure until Thursday.

But his expected absence will narrow the margin that Madigan and his fellow Democrats have to override Rauner’s veto.

Pritchard said he plans to be on vacation in Russia during that time; he said his opinion on the matter would stay the same.

“We can’t go a third year without a budget,” Pritchard said. “Students are leaving the state; we’re to the point where we must take action.”

Pritchard said he voted in favor of the tax increase because the state needs to have a balanced budget, begin paying off old bills and “getting on the right track” toward business reforms as soon as possible.

“We’ve got to give some stability, some signs that the government can get control of our spending,” he said.

Rauner promised to veto the tax measure because Democrats who control the General Assembly have not agreed to resolve his pet issues, including statewide property tax relief, cost reductions in workers’ compensation and benefits for state-employee pensions, and an easier process for dissolving or eliminating local governments.

“It’s regrettable that I stand here today not capable of being able to support this package, not because what’s in the package is bad, but because it’s incomplete,” said the Senate’s newly minted minority leader, Bill Brady of Bloomington. “We need a comprehensive budget package with reforms.”

If Rauner doesn’t like the tax plan, the financial world does. On Monday, two of the nation’s top credit-ratings agencies signaled it would be a good idea for Rauner to accept the results. Fitch Ratings and S&P Global Ratings, having earlier threatened to move Illinois’ creditworthiness into “junk” status without swift action to approve a budget, smiled favorably on the financial outlook.

Democrats and Republicans have negotiated the issues that Rauner considers outstanding in the two weeks since the special session began. But the GOP claims talks broke down over the weekend in advance of Madigan calling the budget votes. Madigan said Monday that those talks were ongoing.

“We’ll continue to work with the Republicans on those issues until they’re resolved,” Madigan said.

• Northwest Herald reporter Jordan Wilson contributed to this story.