House ready to act on budget with permanent tax hike

2014-05-15T00:01:00Z 2014-05-16T08:49:08Z House ready to act on budget with permanent tax hikeKURT ERICKSON H&R Springfield Bureau Chief Herald-Review.com

SPRINGFIELD – The Illinois House is on track to vote on a $38 billion budget Thursday that relies on making the 2011 temporary income tax increase permanent.

But, House Speaker Michael Madigan told reporters Wednesday there are still not enough votes in his chamber to extend the tax hike, signaling that some serious end-of-session horse-trading is on the horizon if lawmakers want to leave town with a budget that doesn't trigger massive cuts to education, public safety and social services.

"We're working on all of these matters," Madigan said. "We're not at that point yet."

The powerful Democrat from Chicago chided reporters for suggesting he would be twisting arms in the coming days, saying that's not how he plans to win support for what amounts to an election year tax increase.

"We're not in the business of issuing threats," Madigan said.

Rather, Madigan is piecing together a package of changes to the tax code that could be used to generate support for making the income tax hike permanent.

Along with backing a change in a business tax incentive program, Madigan said he supports legislation that would cut the corporate income tax rate in half.

"I'm prepared to advance that bill ... as part of a balanced package," Madigan said.

Other potential tax code goodies range from changes in the ethanol tax credit to Gov. Pat Quinn's property tax relief proposal.

With Republicans not expected to lend a hand, Madigan will need to convince 60 of his 71 members to back the tax extension at a time when some face tough re-election battles in November. Among those who have said they cannot support the move are state Reps. Sue Scherer of Decatur and Jerry Costello of Smithton.

The temporary tax increase is scheduled to roll back Jan. 1 from its current 5 percent rate to 3.75 percent, which would result in a loss of revenue of more than $1.6 billion at a time when state costs continue to rise.

The proposed budget, meanwhile, largely mirrors what Quinn is recommending.

If approved, the shuttered Murphysboro youth prison would reopen as a specialized adult facility.

Although state aid for schools continues to lag behind targets set by the legislature and top educators, it would rise slightly under the House proposal. The plan also would boost busing payments by $54 million.

Universities would see relatively flat funding in the coming year.

An additional $51 million would be set aside for university tuition assistance for an estimated 25,000 low-income students.

"Given the environment we're in right now, I think the governor's recommended budget for all of the public institutions is a good outcome," said Southern Illinois University President Randy Dunn. "The ability to go forward with this kind of budget is a win for the higher education institutions of the state."

The proposal also calls for spending $600 million to pay down the state's old bills. The governor's office estimates the current backlog at $4.1 billion, down from $5.3 billion in April 2013.

The Department of Children and Family Services would see increases to several programs under the proposed budget.

There would be a 5 percent increase for foster care funding and 2 percent for group homes. Adoption and guardianship services would receive an additional $1 million, while almost $2 million would go into foster homes.

State Rep. LaShawn Ford, D-Chicago, said he wanted to make sure that money will be spent wisely.

“It’s important because I know a lot of the students or young people who are under the care of this department end up in the care of another department,” Ford said.

State Rep. Greg Harris, D-Chicago, said the increases were a “teeny bit of money” that would ensure children didn’t wind up in the Department of Juvenile Justice or the Department of Corrections.

The Department of Veterans Affairs would also see a number of increases, with $500,000 going toward the purchase of new equipment for veterans’ homes and another $500,000 to transition to electronic medical records.

kurt.erickson@lee.net|(217) 782-4043

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