SPRINGFIELD – The Illinois House on Sunday approved a $5 billion income tax increase as well as a spending plan for the new fiscal year, with some Republicans defying Gov. Bruce Rauner and joining Democrats in an effort to break the nation's longest running budget stalemate.
But the Republican governor immediately issued a statement saying he would veto the tax increase if it is not accompanied by business-friendly reforms.
Fifteen Republicans joined majority Democrats in the 72-45 vote for the tax increases, providing one more than the three-fifths majority necessary for the law to take effect immediately. Rauner derided the proposals as lacking spending restraint or "structural" changes to he wants.
"Illinois families don't deserve to have more of the hard-earned money taken from them when the Legislature has done little to restore confidence in government or grow jobs," Rauner said.
The revenue package now goes to the Senate for approval. The proposal would increase the personal income tax rate from 3.75 percent to 4.95 percent. Corporations would pay 7 percent instead of 5.25 percent.
Without a budget, credit rating agencies have threatened to downgrade Illinois to "junk" status. The state comptroller will be unable by August to cover even the basic services ordered by courts and the $6.2 billion budget deficit and $14.7 billion in overdue bills would grow.
"Today, we can change the awful trajectory of the past several years," said the bill's sponsor, Democratic Rep. Greg Harris of Chicago said before the vote. "We can vote. We can do our jobs we can get it done. The people in this room, the men and women in this room can save our state."
Shortly after the tax-hike vote, the chamber voted 81-34 on fiscal blueprint that would spend about $36 billion. Democrats have said that is $800 million less than what Rauner himself proposed last winter.