Illinois Senate OKs tax increase; Gov. Rauner has vowed veto

SPRINGFIELD, Ill. (AP) — The Illinois Senate endorsed a $5 billion income tax increase Tuesday and a $36 billion spending plan designed to begin digging Illinois out of the nation’s longest state-budget deadlock since at least the Great Depression.

The Democratic-controlled Senate provided three-fifths majorities on both votes. The tax increase passed 36-18, just enough to send the measure to Gov. Bruce Rauner, and enough to override the veto the Republican has promised.

“We are at a moment in time. We are faced today with the fierce urgency of ‘now,'” said the tax increase legislation’s sponsor, Sen. Toi Hutchinson of Olympia Fields. “We don’t have any more time. And too late is not good enough.”

The Senate followed with a 39-14 vote to approve a $36 billion spending plan that Democrats have crowed is $1 billion less than even Rauner floated last winter.

Tuesday was the fourth day of the third consecutive fiscal year that Illinois has begun without an annual budget agreement because of an ongoing dispute between Rauner and the Democrats. He has insisted that in exchange for a funding plan, he should secure business-friendly “structural” changes, such as cost-reducing restrictions on the compensation program for injured workers and state-employee pensions. He wanted a four-year statewide property tax freeze matched by a temporary income tax increase.

But the income tax increase headed to his desk is permanent.

“It’s regrettable that I stand here today not capable of being able to support this package, not because what’s in the package is bad, but because it’s incomplete,” said the Senate’s newly minted minority leader, Bill Brady of Bloomington. “We need a comprehensive budget package with reforms.”

If Rauner doesn’t like the tax plan, the financial world does. On Monday, two of the nation’s top credit-ratings agencies signaled it would be a good idea for Rauner to accept the results. Fitch Ratings and S&P Global Ratings, having earlier threatened to move Illinois’ creditworthiness into “junk” status without swift action to approve a budget, smiled favorably on the financial outlook.

Democrats and Republicans have negotiated the issues that Rauner considers outstanding in the two weeks since the special session began. But the GOP claims talks broke down over the weekend in advance of Madigan calling the budget votes. Madigan said Monday that those talks were ongoing.

“We’ll continue to work with the Republicans on those issues until they’re resolved,” Madigan said.

The budget bills are SB6 and SB9 .

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