State Capitol, July 4 – The Illinois Senate voted on the Fourth of July, to approve the tax increase, which had previously passed the House. Perhaps surprisingly, there were no verbal fireworks amidst the debate on the Senate Floor, to pass a permanent tax increase on personal incomes and corporations.
The bill, SB-9, would raise personal income tax rate to 4.95%, and the corporate income rate to 7%.
The bill passed with 36 votes, enough to override the promised veto by Gov Rauner. One of the surprising votes FOR the tax increase came from Republican Sen Dale Righter, whose district includes Eastern Illinois University, which has suffered particularly hard cuts over the last three years, and watched as the student population declined.
Following the vote, Righter told reporters, “Today I represented my district.”
Sen Bill Brady, the new Republican Senate Leader, voted against the tax increase, but prior to the vote, did take the floor to commend the bipartisan cooperation that has developed over the last several months.
Brady said today’s legislative package of three bills, was incomplete – and noted there is still too much of a financial burden on homeowners from property taxes, the need for reforms still on Workmen’s Compensation, the need to consolidate local governments, and the need to address school reforms.
The Senate then took up debate on SB-6, a companion bill on the budget. This bill in part, would authorize the borrowing of $6 Billion, to pay back a portion of the $14 Billion backlog of unpaid bills. It also allows for inter-fund borrowing via “sweeps”. This means the State could take money out of designated funds, that collect monies, which are intended for a specific purpose, and transfer those funds into the General Revenue Fund, that funds general government operations.
The Senate passed this legislation with 40 votes, with 36 being needed for passage.
The third bill passed by the Senate was SB-42, a rather technical legislation, authorizing rate increases in a number of areas, including higher Medicaid compensation for hospitals and other treatment facilities. In a host of other areas, it authorizes fund transfers to various departments and organizations.
It also authorizes inter-fund borrowing of $1.2 Billion. SB-42, passed with the required 36 votes.
Now that they have passed both chambers, the bills will need to go to the governor, where it is expected he will veto them. Then the House and Senate will need to vote to override the Gov’s veto of the budget. Speaker Madigan’s office said no vote to override will be held on the afternoon of July 4th. So the earliest that the state could have a full-year budget in place, is sometime on July 5. This as the bond houses threaten to again downgrade the state’s credit worthiness to “junk”
With so much of the budget process now having passed, the unstated expectation among legislative leaders, is the bond houses will withhold downgrading the state, until the votes on an override are held.