Tax hikes coming from Quinn

SPRINGFIELD - Many suburban households would be asked to pay more in Illinois income taxes to avoid massive state cuts to education, health care and services to the disabled under Gov. Pat Quinn's budget plan he'll unveil next week.

An expected 1.5 percentage point increase to the state's flat, 3 percent income tax would raise money, along with pension reforms, fee increases, federal stimulus dollars and $1.3 billion in cuts to try to wipe out an $11.6 billion deficit in this and next year's budget.

Quinn will not propose a higher gasoline tax in Wednesday's budget speech, aides said, and is attempting to soften the blow by increasing the per person exemption tax filers can claim to $6,000 from the current $2,000.

The net effect, Quinn aides claim, is that a family of four making roughly $59,000 would break even. Those making less would pay less than they do now. Those making more would pay more. Additionally, bigger families would see a lower break-even point while smaller families and those without children would see a higher one.

"It's really important to differentiate those families in Illinois who are not doing so well, they'll benefit dramatically from this plan, and those who are doing better will be asked to share in the sacrifice and help get this economy back in shape," said Jerry Stermer, Quinn's chief of staff.

Suburban market research done for the Daily Herald suggests far more area households could lose than win under this deal. Data from a 2008 review of estimated median household income done by Claritas Inc., shows some families in Des Plaines, Elgin, Prospect Heights and Elburn might break even or come out ahead while nearly everyone else - from Naperville to Schaumburg to Gurnee - could pay more.

The same market research shows that the average household size across this stretch of the suburbs is 2.8 people and the average income is $95,921.

Initial reaction from area Republicans was negative.

"I think it's the wrong way to go," said aid Winfield Republican state Sen. Randy Hultgren. "Even though people making $60,000 or less won't be hurt directly, I think they'll be hurt indirectly by slowing the economy and possibly putting their jobs at risk."

State Rep. Dennis Reboletti, an Elmhurst Republican, called it a hit on the middle class and said a family making $60,000 or more in his area is not rich.

"These are average folks that are trying to pay mortgages, trying to pay rent and contemplating sending their children to school, to college and that is just going to crush their ability to make their daily requirements," Reboletti said.

Local Democrats were less critical but still reluctant to embrace tax increases.

"Wow. That's rough," Hoffman Estates Democratic state Rep. Fred Crespo said when told of the amounts.

But he cautioned that the alternative - cutting nearly $11.6 billion from the $27 billion spending fund where the deficit exists - is politically unlikely as it would require huge cuts to education, health care and senior services.

"We can't cut our way out of our budget deficit," Crespo said.

Marengo Democratic state Rep. Jack Franks was also hesitant.

"Throwing more money at our problems won't solve them," said Franks. He said he's never voted for a tax increase and doesn't plan to until there are "wholesale changes" in state government.

Franks did endorse Quinn's call for putting all new hires in a new pension system that would likely make state workers, judges, teachers, university employees and lawmakers worker longer before they could retire and decrease the benefits they'd get in retirement. Current employees would not be affected.

Such a move could reduce the amount of money the state must set aside to cover retirees' pensions. That payment in this budget is $3.3 billion but jumps to nearly $4.6 billion in the next.

While local lawmakers were cautious, Quinn's tax hike plans found open ears with Democratic leadership in the General Assembly, which will have to approve any budget changes.

Both House Speaker Michael Madigan and Senate President John Cullerton say they are open to discussing an increase in the income tax. Quinn has been meeting with his fellow Chicago Democrats regularly as his budget plans developed.

"I wouldn't say he is not out in the woods alone," said Rikeeshi Thelon, spokeswoman for Cullerton.

Daily Herald staff writers Nicole Milstead and Dan Carden contributed to this report.

Household income across the suburbs

Here's the estimated median household income for communities throughout the Daily Herald's circulation area.

Zip code Median income

60002 Antioch 65,964

60004 Arlington Heights 78,634

60005 Arlington Heights 64,761

60007 Elk Grove Village 68,709

60008 Rolling Meadows 65,097

60010 Barrington 122,131

60013 Cary 84,328

60016 Des Plaines 57,303

60018 Des Plaines 54,616

60020 Fox Lake 56,202

60021 Fox River Grove 73,258

60030 Grayslake 85,849

60031 Gurnee 89,810

60041 Ingleside 70,770

60042 Island Lake 73,292

60046 Lake Villa 78,666

60047 Lake Zurich 117,403

60048 Libertyville 103,744

60051 McHenry 70,029

60056 Mount Prospect 65,665

60060 Mundelein 79,172

60061 Vernon Hills 85,574

60067 Palatine 85,746

60069 Lincolnshire 132,328

60070 Prospect Heights 58,345

60073 Round Lake 67,023

60074 Palatine 69,129

60084 Wauconda 68,770

60089 Buffalo Grove 91,989

60090 Wheeling 64,808

60101 Addison 59,112

60102 Algonquin 89,720

60103 Bartlett 92,334

60106 Bensenville 59,703

60107 Streamwood 73,605

60108 Bloomingdale 75,040

60110 Carpentersville 59,989

60118 Dundee 77,701

60119 Elburn 94,785

60120 Elgin 58,968

60123 Elgin 59,007

60124 Elgin 86,197

60133 Hanover Park 76,988

60134 Geneva 88,789

60136 Gilberts 95,694

60137 Glen Ellyn 77,885

60139 Glendale Heights 63,186

60140 Hampshire 72,446

60142 Huntley 77,972

60143 Itasca 81,965

60148 Lombard 66,107

60156 Lake in the Hills 88,033

60157 Medinah 67,641

60169 Hoffman Estates 61,808

60172 Roselle 71,608

60173 Schaumburg 66,750

60174 Saint Charles 75,678

60175 Saint Charles 110,546

60177 South Elgin 74,568

60181 Villa Park 60,889

60184 Wayne 120,052

60185 West Chicago 76,558

60187 Wheaton 85,317

60188 Carol Stream 75,019

60190 Winfield 94,555

60191 Wood Dale 65,012

60192 Hoffman Estates 97,887

60193 Schaumburg 70,902

60194 Schaumburg 71,778

60195 Schaumburg 69,001

60502 Aurora 90,643

60503 Aurora 99,340

60504 Aurora 84,592

60510 Batavia 80,442

60523 Oak Brook 93,616

60532 Lisle 69,007

60540 Naperville 99,284

60542 North Aurora 68,444

60554 Sugar Grove 85,140

60555 Warrenville 70,162

60563 Naperville 74,306

60564 Naperville 120,442

60565 Naperville 110,365

Source: 2008 Claritas, Inc