By John O’Connor
AP Political Writer
SPRINGFIELD — Illinois House Democrats proposed Tuesday an increase in the personal income tax rate by 32 percent, a four-year freeze in property taxes and increases in funding for education and social service programs.
Most of those proposals were part of a $36.5-billion Democratic budget plan that is $800 million less than Republican Gov. Bruce Rauner proposed last winter. They also said it’s nearly $3 billion less than will go out the door this year because of spending required by law and payments mandated by the courts even though the state has not had a budget for two years. It is the longest any state has gone without a budget since at least the Great Depression.
The property tax freeze, which has been a longstanding Rauner demand, was proposed separate from the budget.
“I’m not saying that this is perfect. I’m not saying it completely meets all the requests of the governor. But I think it goes a long way toward giving the state of Illinois a good, solid spending plan that responds to the real needs of the people of the state,” House Speaker Michael Madigan, a Chicago Democrat, said after a 90-minute meeting of the four legislative leaders in his state Capitol office.
Republicans reacted warily because Democrats have yet to submit legislation on an income-tax increase. “Based on the Democrats’ past actions, I can’t take their word that this is a balanced budget,” House Republican Leader Jim Durkin of Western Springs said.
But there are many moving pieces that must line up before Rauner and Democrats who control the General Assembly can stave off the start of a third consecutive fiscal year Saturday without a budget plan. If there is no budget agreement by then, debt rating agencies have threatened to make Illinois the first state to ever have the credit rating of “junk.”
Rauner and Democrats have been unable to agree on a blueprint in part because Rauner has insisted on “structural” changes to limit workers’ compensation costs and reduce state employee pension-program debt, freeze local property taxes, and consolidate or eliminate superfluous government bodies.
The Democratic spending outline doesn’t answer how lawmakers would tackle the stalemate’s fiscal legacy: a $15 billion mountain of past-due bills and billions of dollars spent the past six months that were never appropriated. Despite no budget since June 2015, the government has crawled along, fueled by court-ordered spending and temporary appropriations.
The House Democrats’ announcement came on the eighth day of a special session called by Rauner in advance of the fiscal year’s close. But any budget that takes effect immediately needs a three-fifths supermajority vote in each house. Rauner’s office did not immediately respond to a request for comment.
The plan would increase the personal income tax rate from 3.75 percent to 4.95 percent — the highest Republicans have said they are willing to go — which would raise about $5 billion more annually, said the Democrats’ budget negotiator, Rep. Greg Harris of Chicago. There are other ways in which the proposal resembles a $37.3 billion framework the Senate adopted in late May but which the House didn’t take up before the May 31 end of the regular session.
Included are spending cuts similar to those proposed in the Senate bill. Harris didn’t know the total of proposed reductions; the Senate plan purported to cut $3 billion.
Harris said the House plan would add $350 million to elementary and secondary education and boost spending for school-related services such as transportation and school lunches by $65 million. Higher education would be cut by 5 percent, half of what the Senate proposed. State operations, such as employees or routine services offered in key agencies would also be cut 5 percent to provide additional funding for other programs, such as violence prevention, autism education and breast and cervical cancer screening.
Madigan said he would call floor votes on the non-budget issues Wednesday. A House committee advanced a four-year property-tax freeze Tuesday that carves out Chicago, its schools and 17 other distressed school districts. Republicans object to some provisions, such as an exception for Chicago, and want others, such as allowing voters to extend the freeze when it ends.
But Majority Leader Barbara Flynn Currie of Chicago pointed out that for governmental bodies that are exempted, existing law limits property tax increases to 5 percent or the inflation rate, whichever is less..
She said the measure also increases homestead exemptions and other property-tax breaks for seniors, the disabled and more.
“This would not only freeze property taxes as a matter of the whole district’s taxing ability,” Currie said, “but also provide very specific relief to every homeowner in Illinois.”