Illinois Republicans reveal new budget plan with tax hikes, say Rauner supports it

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ILLINOIS NEWS NETWORK

Illinois legislative Republicans on Wednesday unveiled a new budget plan that they say is balanced and includes meaningful reforms to grow the economy. It also includes tax increases.

At a news conference at Chicago’s Thompson Center attended by several GOP senators and representatives, Republican lawmakers said their latest plan incorporates a number of tax increases that were part of the Senate’s grand bargain, but with a few changes.

Senate Democrats approved a plan last month to permanently raise the income tax by 32 percent, from 3.75 percent to 4.95 percent, with no Republican support. Under the new GOP plan unveiled Wednesday, the increase would expire after four years. The four-year expiration date would coincide with a four-year property tax freeze that also is in the GOP plan. The income tax hike also would not be retroactive to Jan. 1, as the Democrat plan is, but would go into effect beginning July 1.

A family with annual income of $60,000 would pay the state an additional $720 a year under the GOP tax hike proposal, with their tax bills spiking from $2,250 to $2,970.

The property tax freeze includes an exemption on existing debt service payments as requested by Senate Democrats, but also would allow residents to lower or increase their taxes through voter referendum.

“If you’re going to dig deeper into taxpayers’ pockets, I think it’s reasonable to expect that they be given a little more control over their government, or a little bit more economic opportunity,” Sen. Dale Righter, R-Mattoon, said.

The GOP’s new proposal includes a hard spending cap of $36 billion over the next four years, Righter said. The spending plan passed by Senate Democrats after bipartisan grand bargain negotiations broke down last month looked to spend $37.3 billion in fiscal year 2018.

Righter said Republicans’ latest plan reduces spending by $5 billion through a series of expense cuts and structural reforms, and also pays down a portion of the state’s more than $14 billion in unpaid bills, something that was not included in the budget plan approved by Senate Democrats.

House Republican Leader Jim Durkin said Gov. Bruce Rauner supports the new proposals and would sign it. A call to Rauner’s communications office was not immediately returned.

“Lawmakers should be in Springfield working around the clock until our job is finished,” Durkin said. “This comprehensive budget package with structural reforms that we are proposing today is the path forward to breaking the budget impasse.”

Rep. Tom Demmer, R-Dixon, said the GOP proposal includes pension reform that creates a Tier 3 plan for new employees and incorporates elements of Democratic Senate President John Cullerton’s reform plan that some argue is unconstitutional because it diminishes benefits. It also includes a new workers’ compensation reform measure, though details on that were unclear. A workers compensation reform that passed the Illinois House last month was called fake reform by many state business leaders.

GOP lawmakers included a full year’s funding for social service agencies and early childhood education programs, as well as educating funding reform that would have the state pick up Chicago Public Schools pension costs but eliminate its block grant program.

Not all Republican lawmakers were on board with the new plan. State Rep. David McSweeney said he could not support the tax increases included in the package.