Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...
For the first time in two years Illinois has a comprehensive strategy to collect revenue and fund state government after House lawmakers July 6 overrode Gov. Bruce Rauner’s (R) veto of a fiscal year 2018 budget bill.
In a rebuke to Rauner, a political newcomer and a Republican in a state filled with Democrats, members of the House revived Senate Bill 9, a revenue bill raising $5 billion through a permanent income tax increase. House members voted 71-42 to override Rauner’s veto. The Senate voted to override July 4 by a vote of 36-19.
More than a dozen Republicans abandoned Rauner and supported the tax increase, frustrated with a vicious political feud that racked up $15 billion in unpaid bills and threatened to push the state’s debt into junk bond territory.
“We all understand where we are, we are looking into an abyss, a financial abyss,” said Rep. David Harris (R), who called on fellow Republicans to join him. “The state is imploding financially and action is required.”
Rauner issued a statement lamenting that “today was another step in Illinois’ never-ending tragic trail of tax hikes. Speaker Madigan’s 32 percent permanent income tax increase will force another tax hike in the near future.”
The drama across the Illinois state capitol continued even as lawmakers gathered to cast their votes.
The House session was delayed for two hours after public safety personnel put the capitol complex on lockdown and a hazardous material crew searched the building. The scare was triggered when a woman allegedly tossed a chemical substance into Rauner’s offices in the capitol. No injuries were initially reported and the perpetrator was quickly arrested.
Illinois hasn’t had a conventional budget since June 30, 2015. Rauner has resisted any budget deal featuring tax increases unless Democrats agreed to a menu of cuts and government program reforms aimed at improving business conditions.
Under S.B. 9, the corporate income tax rate would rise to 7 percent from 5.25 percent, generating approximately $500 million annually. The personal income tax rate would be raised to 4.95 percent from 3.75 percent, generating almost $4.5 billion annually. The tax hikes would commence retroactive to July 1, the first day of the fiscal year.
Several organizations thanked lawmakers for making hard choices to end the impasse.
“We appreciate that the General Assembly successfully worked for a comprehensive budget solution—including enhanced revenues—without damaging cuts to healthcare,” said A.J. Wilhelmi, president and CEO of the Illinois Health and Hospital Association. “A full state budget helps support healthcare as well as critical social services provided in communities across the state.”
To contact the reporter on this story: Michael J. Bologna in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Ryan C. Tuck at email@example.com
Copyright © 2017 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)