Quinn Proposes Making State Income Tax Hike Permanent
By Chuck Sudo in News on Mar 26, 2014 4:30PM
Gov. Pat Quinn is set to announce his budget address before a joint assembly of the Illinois Legislature this afternoon and Quinn is set to propose making the 2011 state income tax hike permanent. Doing so will immediately make the hike a major campaign issue in the Illinois governor race.
Sources familiar with Quinn’s budget plan told the Tribune and Sun-Times the governor will propose locking in the income tax increase and combining it with property tax relief for Illinois homeowners. The revenue expected to be generated from keeping the hikes in place will fund early childhood education programs to the tune of $100 million and another $50 million earmarked for the state monetary assistance program that provides scholarships for low-income college students.
Quinn also plans to use revenue from the hike to continue chipping away at the state’s backlog of unpaid bills, which is expected to drop to $5.6 billion by June. That’s down from $9.9 billion in 2010. Interest payments on last year’s unpaid bills—$318 million—would have been enough to finance the Illinois State Police’s annual budget.
If Quinn allowed the income tax rate to expire it would drop from its current 5 percent back to 3.73 percent and would result in a loss of $2 billion in revenue.
Quinn’s plan also calls for property tax relief in the form of an automatic $500 tax credit. A proposed increase in the state’s earned income tax credit, meanwhile, would provide low income renters with some relief.