Addressing the City Club of Chicago on Monday, Illinois Senate President John Cullerton sure didn’t sound like someone planning to make a temporary tax increase permanent.
He didn’t voice any determination to ensure that it expires – which would force lawmakers to cut some $5 billion from the state budget – but neither did he stump for support of keeping it forever. That’s a decision he’ll leave to whomever wins the gubernatorial election in 2014.
Cullerton, D-Chicago, gave his audience – which included many members of his Senate caucus – a Power Point tour of the current state budget, the grand finale of which contained highlights of the damage being done by out-of-control pension costs. (They’ll consume another $1 billion in the budget year that starts July 1.)
Along the way, he took some pokes at those who have criticized the income tax increase that went into effect in 2011.
He noted that the state’s three previous tax increases had come under Republican governors – Ogilvie, Thompson and Edgar. Then in 2011, under Quinn, legislative Democrats raised the personal income tax from 3 to 5 percent. “If you’re a Democrat, that’s 2 percent. If you’re a Republican, it’s 67 percent,” Cullerton quipped. “And both are true. And reporters always say 67 percent.” (Actually, it is a 67 percent increase in purely mathematical terms. The corporate rate went from 4.8 to 7 percent – 45 percent to Republicans and reporters — with a 2.5 percent personal property replacement tax. )
Cullerton noted that Illinois does lead the region now in its personal income tax rate, with Indiana at 3.4 percent and Wisconsin and Iowa with sliding tax scales that start at 4.6 and .36 percent, respectively. But when the Illinois temporary tax expires in two years and goes down to 3.75 percent, Cullerton noted, Illinois will have the lowest personal tax rate of its neighbors (if you include the highest rates of the progressive tax systems in Iowa, Kentucky and Missouri). And Wisconsin, with a rate of 4.6 to 7.75 percent, will have a higher personal income tax rate for all incomes.
In 2025, Illinois’ personal income tax rate falls to 3.25 percent . That is, as long as the governor elected in 2014 lets the increase expire on schedule. And that decision will be up to the governor, Cullerton said.
“All I’m suggesting is, when people start running for governor, ask what their plan is for paying for state government,” Cullerton told reporters after his City Club speech. “ We (the Senate) are going to wait. I’m not going to do anything until we find out what these” candidates have planned.
“The governor is the one who decides,” Cullerton said. “You can’t pass a bill without the governor backing it. That’s what the election’s going to be all about.”
In other words, anyone who campaigns next year on a pledge to let the temporary tax expire better be prepared to draft a state budget that is $5 billion lighter. The no-tax pledge will be one campaign promise the Legislature appears eager to enforce on any candidate who makes it.