The Illinois House on Thursday overrode Gov. Bruce Rauner’s veto on a spending plan and increase in state income taxes, after the Senate did so Tuesday.
The state now has a budget plan for the first time since 2015.
In a 71-40 vote, the House enacted an income tax increase, raising the personal income tax rate from 3.75 percent to 4.95 percent, and the corporate tax rate from 5.25 percent to 7 percent. The $36 billion spending plan was approved 74-37.
Here’s how local lawmakers voted Thursday on the income tax increase:
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▪ Dan Beiser, D-Alton — YES
▪ John Cavaletto, R-Salem — NO
▪ Jerry Costello II, D-Smithton — NO
▪ LaToya Greenwood, D-East St. Louis — YES
▪ Jay Hoffman, D-Swansea — YES
▪ Charles Meier, R-Okawville — NO
▪ Katie Stuart, D-Edwardsville — NO
Cavaletto and Meier voted against the tax increase after voting in favor of it Sunday, when the House initially approved the increase.
“I listened to my constituents and voted against the permanent income tax hike,” Meier said. “The people I spoke with want to see more reforms and cuts before any talk of increasing taxes. I voted against the tax hike since zero reforms came back from the Senate. I supported the governor’s veto and the taxpayers’ wishes.”
Democrats pushed the $36 billion spending plan fueled by a $5 billion income tax increase over the Republican governor’s objection.
Passing the first annual budget since 2015 ends the nation’s longest fiscal stalemate since at least the Great Depression.
The first-term governor, already facing several Democratic heavyweights hoping to displace him in the 2018 election, took to the trail Wednesday to implore the House — run by Democratic Speaker Michael Madigan, of Chicago — to sustain the vetoes. He’s taken to calling the revenue surcharge “Speaker Madigan’s 32 percent tax hike.”
“This is not just a slap in the face to Illinois taxpayers. This is a 2-by-4 smacked across the foreheads of the people of Illinois,” he told reporters at a bar on Chicago’s far South Side. “This tax hike will solve none of our problems. In fact, in the long run, it will make our problems worse, not better.”
Rauner has sought pro-business reforms in conjunction with a budget, including a property tax freeze and term limits, and he blames the state’s failures on Democrats in power, largely Madigan. Democrats have said many of Rauner’s reforms would hurt the middle class.
After Thursday’s vote, Rauner issued a statement tying the tax-increase to Madigan.
“Today was another step in Illinois’ never-ending tragic trail of tax hikes,” Rauner said. “Speaker Madigan’s 32 percent permanent income tax increase will force another tax hike in the near future. His tax-and-spend plan is not balanced, does not cut enough spending or pay down enough debt, and does not help grow jobs or restore confidence in government. It proves how desperately we need real property tax relief and term limits. Now more than ever, the people of Illinois must fight for change that will help us create a brighter future.”
For two weeks, lawmakers have been meeting in a special session called precisely to deal with the budget. The session was capped by a flurry of activity Tuesday, when the Senate sent the permanent tax increase and spending blueprint to Rauner, who quickly vetoed it, only to have the Democratic-controlled Senate reverse him just as swiftly.
After two holiday-period days in which the House was able to summon fewer than 60 of its 118 representatives, Madigan scheduled the override attempt for Thursday, saying House Democrats are eager to join with Republicans “to begin healing the wounds of the last several years.”
With a $6.2 billion annual deficit and $14.7 billion in overdue bills, disaster is around the corner. The United Way predicts the demise of 36 percent of all human-services agencies in Illinois by year’s end. Road construction work totaling billions of dollars is shutting down. Public universities have been cut to the bone and face a loss of academic accreditation.
State credit rating
The standoff entered a third fiscal year July 1. Credit-rating houses threatened to downgrade the state’s creditworthiness to “junk,” signaling state debt purchases as highly speculative venture. Two agencies gave Illinois some breathing room Monday after the weekend tax vote.
But on Wednesday, a third credit-rating agency, Moody’s Investors Service, put Illinois under review for a downgrade even if lawmakers reversed the veto. Despite progress, the package does not address the state’s $130 billion unfunded liability in employee pensions or do enough to pay down bills, Moody’s said.
Rauner dismissed the possibility of another downgrade for Illinois, which already has the worst credit rating of any U.S. state.
“Don’t listen to Wall Street. Don’t listen to a bunch of politicians who want power,” he said after local business owners talked about rising property taxes and residents going to Indiana to shop. “Listen to the people of Illinois.”
Stuart said there is much more to be done, even though a budget has been passed. Stuart said she was committed to working to reduce the cost of government and make millionaires and billionaires pay their fair share in taxes.
Illinois Federation of Teachers President Dan Montgomery thanked those who voted to support the budget, even though Rauner “refused to do his job and serve this state.”
“We hope this budget can start to undo the serious harm Bruce Rauner has done to this state, especially our public colleges and universities and all those who have lost services because of Rauner’s commitment to crisis,” Montgomery said. “We still have challenges ahead, but I’m hopeful we can work together for our common purpose: the people of Illinois.”
Democratic Secretary of State Jesse White released a statement Thursday saying the budget allows services to continue.
“I applaud the bipartisan effort today by the Illinois General Assembly,” White said. “My top priority remains providing the highest level of customer service to the people of Illinois in a fiscally responsible manner. With the implementation of a full budget, my office can do just that.”
Lt. Gov. Evelyn Sanguinetti said Springfield is now back to business as usual, with tax increases, unbalanced budgets and phony reforms.
“For two years, the majority party has held our state hostage in a budget crisis,” Sanguinetti said. “Why? For a 32 percent permanent income tax increase they could have passed two years ago. Businesses and families are fleeing our state. The only way out of this financial crisis is to pass the real reforms and pro-growth policies our businesses and families so desperately need.”
Thursday’s votes had been delayed after a woman threw a powdery substance into Rauner’s office at the Capitol. Springfield Fire Chief Barry Helmerichs told the State Journal-Register the building was put on lockdown.
The building was not evacuated, but no additional people were being allowed inside, and the building’s air conditioning was shut off.
An announcement was made inside the House chambers, instructing people not to enter or exit the building.
Dave Druker, a spokesman for the Secretary of State’s office, which oversees Capitol security, said one person was taken into custody Thursday. He did not have further details.
The House session was supposed to start at 1:30 p.m. The session started about 3:45 p.m., after an all clear was given.
The Associated Press contributed to this report.