Illinois governor offers tax-hike guidance in budget mess
SPRINGFIELD, Ill. (AP) - Illinois Gov. Bruce Rauner will give a specific glimpse at what kind of tax increases he'll accept Wednesday in attempting to break the nation's longest state-budget stalemate since at least World War II.
The first-term Republican will make his third budget address after watching his first two such proposals get shelved. Illinois has been operating without a budget blueprint since July 2015 because of a stalemate between Rauner and Democrats who control the Legislature.
Rauner will reject parts of what's under consideration in the Senate, where Democrats and Republicans have been negotiating to find an opening, according to an excerpt of the speech obtained in advance by The Associated Press.
He will reject taxing retirement income and increasing the sales tax on food and medicine. Rauner also will demand a permanent local property-tax freeze in exchange for any permanent income-tax hike, along with a cap on government spending.
Despite the stalemate, state government continues to operate - largely because of court orders and intermittent appropriations by lawmakers.
Without action, Illinois will have a $5.3 billion deficit when the current fiscal year ends June 30. There is a backlog of $11 billion in overdue bills. State pension programs are $130 billion short of what they need to pay promised benefits to retired and current employees.
After weeks of saying he was staying out of the Senate's negotiations over what's called the "grand bargain," Rauner says he's offering more specifics because lawmakers have asked him for some idea of what he'll approve before they vote on a plan.
"The final result must be a good deal for taxpayers and job creators: A 'grand bargain' that truly balances the budget once and for all, and really moves the needle when it comes to job creation," Rauner says in one excerpt of the speech.
The Senate plan includes an increase in the sales tax on food and medicine, which Rauner will reject, along with nixing the idea of taxing retirement income. He's open to a tax on services such as car repair and landscaping.
Rauner will again insist on regulatory changes such as restrictions on workers' compensation costs to boost business and term limits on officeholders to crimp politicians' power. The Senate plan includes a property-tax freeze, which is part of the governor's agenda, but it ends after two years. Rauner will call for a permanent property-tax freeze in exchange for a permanent income-tax hike.
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Contact Political Writer John O'Connor at https://twitter.com/apoconnor . His work can be found at http://bigstory.ap.org/content/john-oconnor .