Illinois’ Speaker of the House, Michael Madigan, is hoping to roll out a $5 billion tax hike on the state.
The tax hike under the current budget proposal permanently increases personal income tax rates by 32 percent to 4.95 percent from the current 3.75 percent rate.
On Tuesday, Governor Rauner immediately vetoed the tax increase, calling it a “two-by-four smacked across the forehead,” and has said he will do everything in his power to crush the proposal.
But the Illinois Senate overrode his veto setting the table for Madigan and Democrat Majority Illinois House to push forward the tax hike.
“Illinois families don’t deserve to have more of [their] hard-earned money taken from them when the legislature has done little to restore confidence in government or grow jobs,” said Governor Rauner.
“Under Speaker Madigan’s direction, legislators chose to double down on higher taxes while protecting the special interests and refusing to reform the status quo.”
Illinois is facing a grim scenario, but Governor Rauner believes that tax hikes by Madigan will not completely solve the problems.
Saturday marks three consecutive fiscal years since having a budget, and the state is billions of dollars of debt, owing $6.2 billion in the past year alone and facing a total of $14.7 billion in overdue bills.
Due to years of bi-partisan disagreement, Illinois has the worst credit in America and is facing “junk” status, meaning both a steady credit decline rating with Moody’s and Standard & Poor’s and an increasing interest rate that will be a deterrent to prospective investors. This is going to happen whether the budget is passed or not.
Without a budget, the state will not be able to cover services ordered by courts and road construction totaling billions of dollars will shut down. Powerball ticket sales will halt, and public universities may face a loss of accreditation.
The current proposal by Madigan does little to create jobs and boost the economy in Illinois, which is needed to permanently solve the financial crisis.