SPRINGFIELD — Opting to stop waiting for Republican support, Illinois Senate Democrats Tuesday moved ahead with a tax-hike-and-spending plan aimed at finally trying to end a stalemate that has left the state without a permanent budget for nearly two years.
The Democrats’ plan calls for about $5.4 billion in higher taxes, including raising the personal income tax rate from the current 3.75 percent to 4.95 percent. The package also includes extending the state sales tax to a number of services not now taxed, although the final list was reduced from previous versions of the bill.The upper chamber also approved a $37.3 billion appropriations bill that authorizes spending for state programs in the fiscal year starting July 1. Democratic senators said it is the same spending level recommended by Republican Gov. Bruce Rauner in his February budget proposal.
Democrats said the spending plan contains 5 percent across-the-board cuts for most state operations, although it does increase spending for K-12 education.
Senators also approved a companion budget bill that is needed to implement some of the spending authorized in the budget legislation. However, Democrats eliminated provisions to cut Medicaid spending by $405 million and to reduce payments for retired teacher and community college worker health insurance.
All of the bills passed with no Republican support. Springfield-area Sens. Bill Brady, R-Bloomington, and Sam McCann, R-Plainview, voted against all of the bills. Sen. Andy Manar, D-Bunker Hill, voted in favor of all of them.
The Senate did not approve a property tax freeze, even though Rauner said earlier in the day it is the key stumbling block in resolving the budget impasse. During a Facebook Live event, the governor said a two-year freeze, as Senate Democrats have proposed, does not go far enough.
‘Ending the chaos’
The budget plan now goes to the House, which is also controlled by the Democrats, along with other bills the Senate passed last week that are part of its “grand bargain,” even though the bills are no longer connected. As the Senate debated the budget bills, House Speaker Michael Madigan, D-Chicago, issued a statement saying the legislation will be “thoughtfully considered” by House Democratic budget negotiators.House Republican Leader Jim Durkin of Western Springs said the Senate’s budget and tax plans “are not acceptable to the House Republican caucus. Once again their work is incomplete as crucial reforms and spending cuts must be in the final package.”
Senate President John Cullerton, D-Chicago, said the Senate “passed a budget today that was balanced.” He said the $37.3 billion in spending is the same level Rauner proposed in his budget in February. He also said a number of cuts and other changes to the spending-and-revenue plan were suggested by Republicans.
“We’re stabilizing the (state’s) finances, we’ve stemmed the bleeding, we’re investing in our people, and we’re ending the chaos that we have in the state,” Cullerton said. “We picked the governor’s spending level and (Senate Republican) revenue levels.”
But Senate Republican Leader Christine Radogno of Lemont issued a statement disputing that the approved plan was the work of cooperation with Republicans. She said the GOP could not support the “budget and revenue package in its current form.”
“I truly wish we would have been able to come together on a comprehensive solution to the state’s challenges,” Radogno said. “We need a balanced budget. We need property tax relief. We need significant reforms to reach our goals.”
Republicans said they didn’t think the budget was actually balanced and that it relied too heavily on tax hikes.
“We’re delivering a punishing tax increase, making the wrong people pay,” said Sen. Kyle McCarter, R-Lebanon. “The citizens didn’t do this.”
Tired of waiting
Sen. Dale Righter, R-Mattoon, said negotiators have been meeting nearly every day and that the agreement all along was that Republicans would support a budget plan if it was linked to reform measures like property tax relief and workers’ compensation changes. Neither of those measures has passed the Senate.
But Democrats said they were tired of waiting for Republicans to agree to anything.
“We keep meeting to talk about the same things, and nothing gets done,” said Sen. Donne Trotter. D-Chicago. “We’ve got only eight days left to do something.”
The spring session is scheduled to end May 31. After that, it takes three-fifths’ votes in the House and Senate to pass legislation, making it more difficult to pass controversial bills like tax hikes or spending cuts.
“We’re balancing the budget for the governor because he is incapable of doing it himself,” Manar said.
The Democrats’ tax plan ends a number of business tax breaks but also imposes means testing for some personal tax cuts. People making more than $250,000 (and joint filers making more than $500,000) would no longer be eligible for the personal exemption, the property tax credit or the education expense credit on their personal state income tax returns.Under the bill, sales taxes will now be applied to laundry and dry-cleaning services, pest control, security and alarm services and tattoo and piercing services. Satellite TV service will be subject to a 5 percent franchise tax, which satellite services said is unfair because cable TV is only subject to a 1 percent state tax.
The tax bill no longer applies to repair and maintenance of cars or to landscaping services.
On the spending side, Democrats said their plan gives K-12 education $330 million more. Higher education is cut 10 percent from where it was two years ago, but grants under the Monetary Assistance Program are fully funded.
A number of human-services programs that have been squeezed during two years with no permanent budget would be fully funded, Democrats said, including the Community Care Program that helps seniors stay in their homes, domestic violence shelters and child-care services.