Quinn's tax hike panned as too soon, too much

SPRINGFIELD - There may very well be a tax increase emanating from Springfield this year to help solve an $11.6 billion deficit, but it almost assuredly will not be the plan Gov. Pat Quinn put forward Wednesday.

From the highest peaks of political leadership to the lowest-ranking suburban freshman newbie at the Capitol, lawmakers said they appreciated Quinn's effort but thought his tax increases jumped the gun given the political and financial realities taxpayers have endured.

"I would say that before we move forward on any tax increases, Illinoisans want to know how we're going to clean up Illinois government," said influential Illinois House Speaker Michael Madigan, a Chicago Democrat, in an interview with a downstate public television station.

Lake Barrington Republican state Sen. Dan Duffy, one of the newest faces in the General Assembly, said he expected a different approach rather than more of the same.

"I think they had a lot of opportunity to start over and begin again and make some real changes. It's really kind of an extension of all of Rod Blagojevich's plans. I don't see any cost cutting, I just see more increases," Duffy said.

Quinn's budget raises billions in an attempt to balance spending by increasing the personal income tax rate 50 percent to 4.5 percent, hiking several driver and vehicle fees and refiguring state pension benefits to justify skipping billions owed to the system this and next year.

He claims millions of households will pay less in taxes under his plan, which increases the personal exemption to $6,000 from $2,000. Quinn's budget aides say a family of four making $60,900 would break even.

Quinn would use the money to plug the budget hole, increase education funding, launch a $26 billion construction spending program and give parents a 10-day summer shopping spree in which they'd pay no state sales tax on back-to-school purchases.

To those who'd oppose his ideas, Quinn issued a blunt political challenge.

"If you reject needed revenue increases to balance the budget, then you must tell the people of Illinois what you will do instead. Illinois' eleven-and-a-half billion dollar deficit won't go away on its own," said Quinn in a clear shot to his potential rivals for the governor post in 2010. The comment brought loud applause from Democrats.

Quinn rejected gambling expansion as a budget fix and dared anti-tax lawmakers to come up with the cuts needed to balance the budget, knowing it'd slash programs for seniors and school children.

"If you propose a doomsday budget, then tell us what programs you would eliminate to save eleven-and-a-half billion dollars and balance the budget. Put it out there for all to see and hear," Quinn said in his speech. "Saying 'no' is not enough, unless you are willing to speak the truth and offer real alternatives."

But many suburban lawmakers said they expected far more cuts than they saw.

"That really worries me terribly that he is talking about increases in a year when we can't. The balance isn't there," said state Rep. Suzie Bassi, a Palatine Republican. "I just think my taxpayers are going to take one look at this and say, 'What is he thinking?'"

"I can't go home to my constituents and say, 'Sorry, you're going to have to send more money to the same old broken system,'" echoed Senate Republican leader Christine Radogno of Lemont.

Aurora Republican state Sen. Chris Lauzen said now is not the time to spend more.

"Rather than making it easier on taxpayers in Illinois who are already struggling to survive, the budget not only contains the largest income tax increase in the history of the state, but also every driver and every car owner is going to have to pay more," Lauzen said.

State Rep. Jack Franks, a Woodstock Democrat, was similarly miffed.

"The ones who are going to benefit the most will be the urban areas. Those who are going to pay more will be the collar counties," Franks said.

Hoffman Estates Democratic state Rep. Fred Crespo agreed that more streamlining was needed before tax hikes are an option.

"Tell me how you are going to make sure that government runs efficiently," Crespo said.

But even Crespo conceded, "you can't cut your way out of this" and one Democratic leader said tax hikes are inevitable.

"With an $11.5 billion deficit, it's very likely there will have to be a tax increase," said Senate President John Cullerton, a Chicago Democrat.

He said Quinn's plan starts talks and said there are options such gambling, a gas tax, or phasing in the increased tax exemptions that could all reduce the size of any potential income tax increase.

• Daily Herald staff writers Dan Carden, Nicole Milstead and Joseph Ryan contributed to this report.