Shortly after Gov. Bruce Rauner vetoed a budget that imposes large, permanent increases in the state’s personal and corporate income tax rates, the state senate held a July 4th vote in which they overrode Gov. Rauner’ veto. The House is set to follow suit on Thursday. If the House votes to override, as is expected, the state’s personal income tax will increase by a whopping 32%, taking the rate from 3.75 percent to 4.95 percent. Illinois’ corporate tax rate would rise from 5.25 percent to 7 percent, a 33% increase.
Among the 15 Republicans who voted in favor of this massive tax hike when it originally passed out of the House, three are Taxpayer Protection Pledge signers. One Democratic lawmaker also broke their Taxpayer Protection Pledge by voting for this income tax hike. The House members who broke their commitment to oppose any and all efforts to raise taxes include: Rep. John Cavaletto (R-107), Rep. Robert Pritchard (R-70), and Rep. Reggie Phillips (R-110), (Rep. Linda Chapa LaVia (D-83).
Gov. Rauner describe the permanent income tax hike as “a two-by-four across the forehead.” Enactment of this budget is a terrible deal for Illinois taxpayers. In addition to imposing large tax increases that will drain resources from the private sector, this budget contains none of structural reforms Illinois desperately needs to put state spending in line with revenues, fix its pension crisis, and become more attractive to new residents, employers, and investors.
Illinois is already losing more residents than any other state. This huge income tax hike will only further the exodus of individuals, families, and employers from the Land of Lincoln.
(Update: a planned Thursday session in which the Illinois House is planning to override Gov. Rauner’s veto has been delayed after a woman threw an unidentified powdery substance into the Governor’s office. The Illinois capitol has been locked down, with legislators and staff ordered to shelter themselves until the matter is resolved).