Income tax hike passes Illinois House
The Illinois House passed a contentious and divisive tax revenue bill on Sunday after vigorous debate and with little Republican support.
Rep. Peter Breen (R-Lombard) called Senate Bill 9, which would gather $5.4 billion in revenue via a permanent income and corporate tax increase, a "blackmail budget" and accused Democrats of breaking off negotiations.
“Now for the people of the state of Illinois who are paying too much in property taxes, there is no relief here,” Breen said. “For working folks, there is no relief here. There is no reform here for our bloated state government. There is no cleaning up our corrupt politics. There is no sign that anything is going to change in Springfield. Who in their right mind is going to agree to send more money to the state government?”
SB9 would increase income tax rates to 4.95 percent from 3.75 percent. Corporate tax rates would increase from 5.25 percent to 7 percent.
House minority leader Jim Durkin (R-Western Springs) was disappointed by the sudden end to negotiations.
“We [Republicans] have participated in good faith,” Durkin said. “I have, every day, worked to find the right balance in how we can fix Illinois not just by raising taxes but by reducing spending and also making sure there are meaningful reforms to make Illinois an attractive state for families and businesses. Without that, the exodus will continue. I am disappointed that we are taking this up at this moment when there has been significant progress [made] to address the priorities of the governor and also the priorities of the caucus.”
Rep. Jeanne Ives (R-Wheaton) argued that the bill does nothing to fix the state and will further burden the working class.
“This is the wrong plan at the wrong time,” Ives said. “We need to fix our job creation problem first. In Illinois, last quarter, we had 0.6 percent income growth — the weakest in the nation. We have the worst income growth when you look from 2007 to 2016: 0.9 percent. Our economy is too weak for a tax hike and you know it. You know we need jobs, you complain about it all the time and you won’t fix our job creation problems. Instead you want to take this low-income growth and you want to add on a tax increase — a tax increase that will take any income growth away from people that are working hard in this state.”
Ives argued that the only group of people who would benefit may be public-sector unions because they have “baked into their contract enormous percentage growth.”
Rep. David McSweeney (R-Barrington Hills) compared SB9 to former Gov. Pat Quinn’s failed tax increase in 2011, which many argued did little to improve Illinois’ economic stability. The state needs to foster businesses and the economy and SB9 will not allow that, McSweeney said.
“We need in this state…we need more jobs and we need more taxpayers,” McSweeney said. “We need economic growth, that’s the best way to produce revenue. We need to adopt policies that are going to create jobs. One thing I know for sure is that the small businesses in this state that are creating 80 percent of the jobs are going to be hurt by this. They are paying at the individual tax rate. A 30 percent increase in the individual tax rate is going to lead to less jobs and less revenue and more people leaving the state of Illinois.”
McSweeney, as well as Breen, Durkin, and Ives, voted to oppose SB9.
Fifteen House Republicans defied Durkin and Gov. Bruce Rauner and voted for the 33 percent income tax increase. Members include Rep. Steve Andersson (R-Geneva), Terri Bryant (R-Murphysboro), John Cavaletto (R-Salem), C.D. Davidsmeyer (R-Jacksonville), Mike Fortner (R-West Chicago), Norine Hammond (R-Macomb), David Harris (R-Mount Prospect), Chad Hays (R-Catlin), Charlie Meier (R-Okawville), Bill Mitchell (R-Forsyth) , Reggie Phillips (R-Charleston), Robert Pritchard ( R-Hinckley), Mike Unes (R-East Peoria), Sara Wojcicki Jimenez (R-Leland Grove), and David Reis (R-Olney).
SB9 passed 72-45. It awaits a Senate vote.