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Illinois could be headed for a massive rewrite of its tax code—including higher personal and corporate income taxes, a new tax on sugary beverages and the closure of three corporate tax breaks—under bipartisan revenue legislation introduced in the Senate.
Senate President John Cullerton (D) and Minority Leader Christine Radogno (R) on Jan. 9 released details of a long-awaited plan for ending the state’s 18-month budget crisis. The proposed global solution, addressing a long list of polarizing issues including taxes, unfunded pension liabilities, minimum wages, and paying off $11 billion in unpaid bills and gambling, would include more than $5.6 billion in new revenue generated primarily though income taxes.
A spokesman for Cullerton said the Senate Assignments Committee is reviewing the package of 10 bills, which may head to the Senate floor late Jan. 9.
While passage in the Senate is a strong possibility, given support from both the Democratic and GOP leaders, it was unclear how the package would play out in the coming days.
The Illinois General Assembly is in a two-day lame-duck session. Even assuming passage in the Senate, insiders doubted the House could act on the proposals before a new class of lawmakers is sworn in on Jan. 11.
Critical features of the tax code changes include:
In addition, Cullerton and Radogno are proposing several modifications to existing tax credit and fee programs. The changes include:
In addition, the package includes creative solutions to a whole host of problems vexing the state. The plan includes a six-month budget funding state government through the end of the fiscal year. Illinois hasn’t had a traditional budget since June 30, 2015.
The plan includes legislation overhauling Illinois’ woefully underfunded public retirement systems. The changes could save the state up to $1 billion annually. Another bill would raise Illinois’ minimum wage to $11 per hour in five steps by Jan. 1, 2020.
On top of the prospects for passage before the new Legislature gavels in, the reactions of Republican Gov. Bruce Rauner and Democratic House Speaker Michael Madigan were also in doubt. Madigan has been silent on the announcement, and Rauner said he knew very little about the Cullerton/Radogno package.
“I don’t know what’s true and what’s not,” Rauner told reporters Jan. 9. “What I’m heartened by is that Democrats and Republicans in the Senate are working together and really having serious discussions.”
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