Lawmakers push for income tax increase

SPRINGFIELD -- Only a week after the governor said taxpayers are overburdened and need a break, his allies in the Illinois Senate responded by pushing higher taxes.

An Illinois Senate committee on Wednesday approved a 66 percent income tax increase that would lower property taxes by 20 percent and spend billions elsewhere on education, pension debt and construction.

Specifically, the plan increases the personal income tax rate to 5 percent from 3 percent and the corporate rate to 8 percent from 4.8 percent.

"I think it's the best plan what we have in Springfield at this time," said state Sen. James Meeks, the Chicago Democrat pushing the idea.

Township High School District 211 Superintendent Roger Thornton disagreed, telling lawmakers he feared suburban areas would be losers in the deal and see local control of school funding dwindle.

"We don't believe they're going to get every dollar back for every dollar that they spend," Thornton told the committee. "Every dollar they now spend in property tax stays there."

Among the plan's supporters is Senate President Emil Jones Jr., a Chicago Democrat and Gov. Rod Blagojevich's chief political ally.

Jones' spokeswoman said he has long supported raising income taxes to address education and other issues. Last year, he was willing to give the governor's business tax a try. But when it fell flat, he's returned to the income tax.

Just a week ago, in his annual budget address, Blagojevich called for $300-per-child tax rebates, citing a lagging economy and a growing cost of living taking their toll on taxpayers. He also cautioned lawmakers not to send him an income tax increase.

If lawmakers were trying to send him a message Wednesday, he wasn't listening.

"The governor's position hasn't changed," said spokeswoman Abby Ottenhoff. "He thinks we should cut taxes, not raise them, especially at a time when families are already dealing with higher gas bills, higher prices for goods and stagnant wages."

These types of tax plans aren't new. Last year, a plan raising income taxes and expanding the sales tax was endorsed by a House committee amid much fanfare. But it was never called for a vote in the full House because supporters were never able to round up enough votes to get it passed.

It's clear this version, which the Senate Education Committee approved 6-3, also faces substantial hurdles.

Sen. Susan Garrett, a Lake Forest Democrat, voted "present," saying she couldn't support it without "major reforms."

And Jones' spokeswoman acknowledged changes were certain.

Proposed state tax increase

• Total tax increase: $7.3 billion

• Personal income tax rate at 5 percent, up from 3 percent

• Corporate income tax rate at 8 percent, up from 4.8 percent

How it'd be spent

• $2.9 billion for property tax reductions

• $932 million for education, including higher education and early childhood programs

• $600 million family tax credit

• $1 billion for construction spending

• $1.9 billion for pensions or health care.

Source: Illinois Senate Democrats