Illinois income-tax hike 'absolutely' possible

By Kalyn Belsha in News on Mar 1, 2009 8:45PM

Facing a state budget deficit estimated at up to $9 billion, lawmakers say a state income tax increase is fast becoming one of their best debt-reducing options. Gov. Quinn has not said definitively if he will introduce an income tax hike, but one House Democrat told the Tribune the governor is considering raising the flat tax on all individuals’ gross personal incomes from 3 percent to 4 percent. A related hike in the corporate income tax -- which is also currently fixed at 3 percent -- could jump to as much as 4.8 percent, the source said. Both the corporate and personal income tax rate has not changed since being set in 1989.

Sen. Kimberly Lightford, a Democrat from Maywood, confirmed an income tax hike was "absolutely" on the table, but it would be "no more than 2 [percent], no less than 1 [percent]."

Even a 1 percentage point increase in the rate could rake in $4 billion, legislators estimate. For families living off one salary in Illinois - that average income being $45,604 - even the most conservative increase would mean an additional $456 in taxes.

Some critics say Quinn is conflicted over raising the income tax because he does not want to anger potential voters if he decides to run for governor in 2010. He will unveil his rescue plan for the state when he delivers his budget speech March 18.