Birdies–it happened. Capitol Fax (the news from Springfield blog) reported a short time ago that IL legislature this week finally voted to override the disastrous veto of the state budget by Gov Bruce Rauner. While 5 did not vote, 71 were in favor, 42 (all GOP) against.
I can’t say that Mike Madigan, the Speaker of the House is the hero on this one.
Rep. Reggie Phillips, a Republican from Charleston, said he was “tortured by” the decision whether to override Rauner. Phillips’ district includes Eastern Illinois University, which was hit hard during the impasse and reduced higher education funding.
“If I decide to press my button to override the governor, it doesn’t make me any less of a conservative Republican than the rest of the people standing here,” he said. “It makes a person decide he has to vote for his district. He has to think about all the people in his district to the best of his ability.”
From the Chicago Tribune (what little free I could get):
The question of whether there would be enough lawmakers on hand to hold a vote was quickly answered. An attendance roll call showed 112 lawmakers present. Republicans listed five excused absences, including one lawmaker who voted for the tax hike.
Republican state Rep. Steve Andersson of Geneva, who voted for the tax hike on Sunday, framed up the debate as a matter of pulling state government back from the brink.
Yes, some folks thought it looked like a Frank Underwood/House of Cards maneuver when the lockdown happened just about the time the debate before the vote was supposed to happen.
So, what does this mean?
The budget plan would spend more than $36 billion on primary and secondary education, colleges and universities, social services, medical care for the poor and other government functions, with nearly $5 billion in new taxes to help pay for it. The personal income tax rate would rise from 3.75 percent to 4.95 percent. The corporate tax rate would go from 5.25 percent to 7 percent. The plan also would have the state pay down about half of the nearly $15 billion pile of unpaid bills through a combination of borrowing and using cash from other state accounts.
While the Chamber of Commerce is in a tizzy about this, it should be noted that many small businesses decided to declare their businesses as personal income (rather than a LLC), which is one of the reasons why there was a shortfall in the past year.
For the fiscal year, base general funds dropped $968 million or 3.2%. As discussed in earlier briefings, receipt weakness was widespread, and resulted in disappointing performances in key areas such as income and sales taxes as well as federal sources.
For the fiscal year, gross corporate income taxes were off $728 million, or $644 million net of refunds. Part of that decline was due to the IDoR now classifying pass-through withholding under the personal income tax designation rather than corporate. Because of this change, approximately $375 million gross, or $324 million net was moved from the corporate income tax line. Also significantly impacting corporate income taxes were the reconciliations made by IDoR’s during the move to their new accounting system. It is hoped that normalized receipt patterns will be reestablished as they caused significant difficulty in interpreting receipts in FY 2017. Inheritance tax, true to its volatile nature, declined $45 million. Public utility taxes were off of last year’s pace by $42 million while insurance taxes and fees dipped $7 million.
The other issue was that the Medicaid insurance provider, Aetna, said today they would bail out because they had not been paid.
IL had been out of state budget for 2 years.
This doesn’t still address issues with pensions at this point. But it is a step forward.
Other news or comments on your mind? Post them in the comments!