Quinn calls tax hike rumors 'misconstrued'

Gov. Pat Quinn Thursday denied a published report claiming he planned to raise the state's income tax by 2 percentage points.

At a news conference, Quinn denied a Bloomberg News report that quoted budget Director David Vaught as saying the governor planned to raise the income tax from 3 percent to 5 percent.

The governor said he does support an increase to 4 percent to support education.

"That is all that I propose and all that I support," an audibly irritated Quinn said. "I'm going to veto anything that's not my plan."

The Bloomberg report centered around the state's dismal fiscal picture, which Vaught pinned on political inaction.

In the report, Vaught said Illinois has been penalized in the municipal bond market because of its growing deficit. Interest rates on the $1.3 billion the state borrowed in short-term notes this year were higher than on the $2.25 billion it borrowed last year, he said.

For the most recent payment on this year's loan, the interest rate was 2.125 percent. Meanwhile, interest rates on payments for the $2.25 billion borrowed last year were less than 2 percent.

Bloomberg paraphrased Vaught as saying that the state legislature, in its worst financial position ever, lost the political will to address the state's $13 billion deficit because of the November election.

"We're going to pass a tax increase in January," Vaught was quoted as saying. "We expect it is going to be substantial."

Vaught also said lawmakers probably will increase the individual and corporate tax rates by 2 percentage points, generating $6 billion in new revenue.

Quinn said the Bloomberg report misconstrued Vaught's comments.

Republican opponent Bill Brady Thursday held a Chicago news conference to skewer Quinn about the tax hike. Brady says he will solve the state's budget problems without raising taxes, but has not specified exactly how yet.

"If I'm fortunate enough to be elected at the next governor of Illinois, I will use every available option at my disposal to stop this tax hike dead in its tracks," Brady said in a statement.

Quinn said not raising taxes would ultimately place a burden on local governments to raise property taxes to make up the difference. Vaught was one of Quinn's staffers to recently receive a pay raise. His salary jumped by 20 percent, or about $30,000 a year, to $144,000.