Local Government

Local representative defends vote for 32-percent state income tax increase

Illinois State Rep. David Harris, R-Arlington Heights, yells Sunday during the overtime session at the state Capitol in Springfield.
Illinois State Rep. David Harris, R-Arlington Heights, yells Sunday during the overtime session at the state Capitol in Springfield.

State Rep. Steven Andersson got a 25-second ovation from his fellow Illinois House lawmakers when he said Friday that they would “do the right thing” and “do it together” to finally pass a state budget after three years without one.

On Sunday, he was one of 15 House Republicans – just short of a third of the party caucus – to break with the party and Republican Gov. Bruce Rauner and vote to permanently raise the state income tax on residents and businesses by 33 percent.

Andersson, R-Geneva, was the sole McHenry County lawmaker – and one of only three Republicans from the suburbs – to join House Democrats in increasing the tax rate as part of a $36 billion spending plan. 

He said in a lengthy statement Monday that although he did not want to vote to increase taxes, it was “the only viable option” to prevent a fiscal disaster that included an almost certain downgrade to junk-bond status.

“Simply put, the state was out of money and about to actually shut down, and we were out of time as key financial raters threatened to reduce the credit rating of the state as soon as Monday. Yesterday was the absolute last chance to avoid this catastrophe and absolutely the last and final resort we had,” Andersson said.

The House voted, 72-45, Sunday to raise the state income tax by 32 percent on individual filers and 33 percent on corporate filers. The individual rate increases from 3.75 percent to 4.95 percent of income, and the corporate rate increases from 5.25 percent to 7 percent – which doesn’t include an additional 2.5 percent personal property replacement tax that corporations pay.

Sunday’s vote total was one more than Democratic Speaker Mike Madigan needs to override a gubernatorial veto – Rauner has pledged to veto the tax increase because it comes with no significant reforms to make Illinois friendlier to taxpayers and businesses. However, the Republicans who voted for the tax increase undoubtedly will face tremendous pressure to switch their votes and not side with Madigan on the override.

Eight Democrats, most of whom represent vulnerable districts, voted against the tax increase, which means that some Republicans inadvertently may have put their own political futures on the line to preserve ones on the other side of the aisle.

For Rep. Bob Pritchard, who also voted yes, immediate action was needed to stabilize the state’s finances and prevent the three major ratings agencies from dropping Illinois’ credit below investment grade. Although Illinois has by far the lowest credit rating of all 50 states, no state has ever been downgraded to junk.

Pritchard, R-Hinckley, said a balanced budget that included cuts, contains a mechanism to help pay down the state’s $14.7 billion backlog of unpaid bills, and did not add new programs and spending seemed to him like the best deal that the Republican minority would get.

“We have plenty of those in the Legislature who say we don’t need a tax increase,” Pritchard said. “I look at their proposals and they’re proposals that may be rational to them, but … they’re not going to be approved.”

Comptroller Susana Mendoza has warned that her office will be unable to cover basic state services ordered
paid by the courts without a budget in place. Illinois’ current spending, mandated by court orders and consent decrees despite the lack of a budget, has resulted in a $6.2 billion deficit on top of the bill backlog.

Consequences of the protracted budget battle have run from the inconvenient – such as the suspension of multistate lottery ticket sales – to dire threats of school districts being unable to open in the fall without state aid.

Andersson said lawmakers were left with “two bad choices” – raise taxes or let the state fail.

“I chose to save the state first and continue to fight for reforms. The other option was to me unthinkable, irresponsible and immoral. To allow the state to fail was, in my eyes, just not an option. If I allowed that to happen, the resulting damage would spell disaster for our state and be decades in the recovery, if at all,” Andersson said.

Andersson said he will continue to fight for reforms to accompany the tax increase, such as a four-year freeze on property taxes that failed during the 10-day special session that ended June 30. Illinois’ property taxes are among the highest in the nation.

He also said he is not concerned about the prospect of facing a challenger in the 2018 Republican primary for his vote.

“I vote my conscience and respect the will of the people as to whether I continue to serve as their elected representative,” Andersson said.

The 65th District that Andersson represents covers Huntley on the Kane County side, and a sliver on the McHenry County side, and stretches south to include all or parts of Hampshire, Pingree Grove, Gilberts, Elgin, St. Charles, Batavia and Geneva.

The House budget must go back to the Senate for a consensus vote before going to Rauner. Democrats hold a safe supermajority in the Senate – they passed a similar budget to the House with no GOP votes – and any veto by Rauner almost certainly will be overridden.

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