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updated: 5/15/2014 4:48 AM

Democrats push state budget assuming 5% income tax rate

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  • Video: Lawmakers on the State Budget

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  • Dennis Reboletti

      Dennis Reboletti

  • Michael Madigan

      Michael Madigan

  • House Speaker Michael Madigan takes tax questions from reporters Wednesday.

       House Speaker Michael Madigan takes tax questions from reporters Wednesday.
    Mike Riopell | Staff Photographer

 
 

SPRINGFIELD -- Illinois House Democrats are moving forward with a plan that would spend money they won't have unless they vote to extend the 2011 income tax hike in the coming weeks.

House Speaker Michael Madigan says the proposed budget and its preservation of most state services could help persuade Democrats to stop income tax rates from dropping Jan. 1 as scheduled.

But Republicans argue it's backward for lawmakers to talk about spending before they decide how much money the state will take in.

Hanging in the balance is how much in taxes Illinoisans will pay in 2015 and the fate of programs across the state -- from how much money schools have to how much people who care for the disabled are paid.

"Our purpose in advancing the budget first is to set the bar against which we will work to convince people to vote for the revenue," Madigan said.

Votes on the Illinois House floor could come as early as Thursday after committees positioned budget legislation Wednesday.

"That's not how a business operates. That's not how my family operates its budget," said state Rep. Dennis Reboletti, an Elmhurst Republican. "We don't assume that we can buy a new house because we hope to have more money, but not have the additional revenue to pay for it."

So far, suburban Democrats whose support could be key to approving the tax hike renewal have hesitated to go along.

Lawmakers' budget deadline is May 31, but the consequences of their actions will last long after. Illinois' flat personal income tax rate, now 5 percent, is scheduled to drop to 3.75 percent Jan. 1 if lawmakers don't vote to extend it.

The contentious issue is certain to be a centerpiece of the November election from the top of the ballot to the bottom.

As lawmakers debated the budget in committee hearings throughout the Capitol, Republicans often referred to the saying that Democrats were putting the cart before the horse by approving spending without knowing whether Democrats can approve a tax extension.

"Maybe sometime later in the session, the horse catches up with the cart," said state Rep. David Harris, an Arlington Heights Republican. "But I don't think that's a guarantee."

State Rep. Fred Crespo, a Hoffman Estates Democrat, had his committee approve two different budgets, one that assumes renewing the tax hike and the other assuming taxes roll back.

He said that lets the full House choose which direction to go.

"Tomorrow's another day," Crespo said. "We'll deal with that."

The proposed spending plan would largely mirror the priorities set out by Gov. Pat Quinn by saving schools from cuts, for one. But even if the House approves their budget Thursday, the Senate could tinker with it next week, setting up a showdown as the deadline grows near.

Two key budget negotiators in that body are among the lawmakers who have told Senate President John Cullerton they don't support passing a budget without first passing an extension of the tax hike.

"It's not responsible," said state Sen. Dan Kotowski, a Park Ridge Democrat and budget committee chairman. "I'd have a very hard time voting for a budget based on revenue that we don't have."

Meanwhile, lawmakers started moving changes to a major tax break program for businesses that would make it more difficult for companies to qualify.

The Edge tax credit has been debated at length in recent years. Millions of dollars in tax breaks were given to Sears Holdings Co. in 2011 to keep the company in Hoffman Estates, but the tax breaks weren't given to DuPage County-based Office Depot, which then announced a move to Florida.

• The Associated Press contributed to this story.

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