Ignoring promises from Gov. Bruce Rauner to do “everything possible” to keep a state income tax hike from passing, the Illinois House voted Thursday to override Rauner’s veto of the budget and spending plan.
The House needed 71 votes to override Rauner’s veto, and got exactly that many; the vote was 71-42. Rep. Steve Andersson, R-Geneva, said the measure was necessary to “save” Illinois, rather than “let it go into meltdown,” according to the Chicago Tribune. However, other Republicans objected to the 32 percent personal income tax hike, claiming it would leave most families strapped for cash.
The budget would increase the state’s personal income tax from 3.75 percent to 4.95 percent, and increase the corporate tax rate from 5.25 percent to 7 percent. The tax rate increases are expected to bring an additional $4.76 billion in revenue.
In addition to raising income taxes, the budget also increases the tax credit for low-income families and brings back the research and development tax credit, along with ending loopholes that gave corporations tax breaks.
The new fiscal year for Illinois began on July 1, but legislators had to hold a special session to work out a final spending plan for the state. Illinois has not had a full budget since July, 2015, and the state has made headlines nationally for its long-running budget stalemate.
Republican governor Bruce Rauner called the budget a “two-by-four smacked across the forehead” and said that he was responding to local business owners complaining about the property tax increases.
Bruce Rauner dismissed threats from Moody’s Investors Services saying the state faced a credit rating downgrade to “junk” status.
“Don’t listen to Wall Street,” Rauner told reporters Wednesday. He said the problems with the budget included lacking regulation cuts for businesses, property tax cuts and term limits, all of which he claimed were necessary for a budget.
In the past, Bruce Rauner promised to approve a temporary tax hike if it came with a four-year hike freeze. However, the budget’s tax hike is permanent. The Senate attempted to pass a tax hike freeze earlier in the year, but the measure failed in the House amid concerns that school funding would suffer significantly.
[Featured Image by Scott Olson/Getty Images]