House passes 66% hike in state income tax

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Updated: March 24, 2011 2:46PM

SPRINGFIELD — The Illinois House handed Gov. Quinn a major legislative victory Tuesday by narrowly passing a 66-percent increase in the state income tax, setting up a potential vote in the state Senate.

The measure to increase the amount the state withholds from workers’ paychecks from 3 percent to 5 percent passed by a 60-57 vote. Sixty votes was the bare minimum needed for passage.

State Reps. Keith Farnham, D-Elgin, Fred Crespo, D-Hoffman Estates, Randy Ramey, R-West Chicago, Tim Schmitz, R-Batavia, and Mike Tryon, R-Crystal Lake, all voted against the tax hike.

Debate lasted for close to 90 minutes as backers called it a last-ditch move to keep state government afloat in the face of a crippling $15 billion budget deficit, while Republicans predicted it would worsen the state’s fragile economy.

“Illinois is in crisis, absolute financial crisis, and there is no way we can dig ourselves out of the crisis without increased revenues,” said House Majority Leader Barbara Flynn Currie (D-Chicago), the bill’s chief House sponsor.

The roll call on the tax vote, which boosted the corporate income tax from 4.8 percent to 7 percent, fell strictly along party lines with no Republicans supporting the plan. The tax increase, which would amount to an $800 annual hit to a family with a $40,000 household income, would take effect immediately.

The tax-hike victory for Quinn followed a setback earlier in the day, when a push to increase the state tax on cigarettes by $1.01 a pack failed in the House on a 51-66 vote.

The package would have raised $375 million for schools. It had been sought by black lawmakers, who listed education dollars and property-tax relief as major priorities in a revenue package.

Still, more than $300 million in new money for schools will flow from the income tax increase should it pass the Senate. One-eighth of a percentage point of the new increase is set aside for education.

Quinn faced another setback Tuesday evening when the House voted down a bid to borrow $8.75 billion to pay a multibillion-dollar backlog of unpaid bills owed to state vendors. That proposal, which needed 71 votes to pass, failed by a 65-52. The bill failed a second time by a 68-49 vote.

A $4 billion borrowing package to cover what Illinois owes its five pension systems this year remained stalled in the Senate.

The tax-hike package, Senate Bill 2505, also includes a provision that would limit spending growth at 2 percent annually, or the income tax would revert to its current rates.