PI Original Adam Doster Wednesday March 10th, 2010, 1:42pm

Quinn Revises His Pitch For New Revenue (UPDATED)

In his budget address today, Gov. Quinn tweaked, re-framed, and scaled back his plan to raise the state income tax rate.

As expected, Gov. Pat Quinn today urged the General Assembly to increase revenue as they craft a FY 2011 budget. His latest proposal, raising the state's corporate and personal income tax rate  from 3 percent to 4 percent to cover proposed education cuts, is more modest than any of his previous plans. Here's video of the governor introducing the idea during his address:

By slimming down his income tax proposal and tying it directly to education, Quinn is trying to gain the support of lawmakers who think a larger tax increase is politically unpalatable. He is also hoping that school teachers, administrators, and parents will get behind the effort if it's tied directly to school funding.  But in doing so, the governor has entirely dropped his emphasis on the need for fundamental tax reform, which played a key role in his budget address last year. "The most compelling case for tax reform is found in our own Illinois tax code," he said last March. "For 20 years, Illinois has had one of the most unfair tax systems in the country." This year, Quinn only discussed the importance of maintaining the state's already-low support for education. Even if approved, this won't begin to fix the state's structural deficit.

Meanwhile, appearing on WSIU's Illinois Lawmakers immediately after the address, House Speaker Michael Madigan (D-Chicago) responded that "the people of Illinois don't want tax increases."  He then applauded Gov. Quinn for exhibiting the "courage" to nonetheless propose one.  Watch it:

Reporters need to ask Madigan to state directly if he supports or opposes an income tax increase.  And if he says yes, they need to question why he can't muster the same sort of "courage" exhibited by Quinn.  After all, he controls a large enough majority in the House to pass a fair and sustainable budget without Republican votes.

SEIU Healthcare (whose Illinois State Council sponsors this website) is the first member of the Responsible Budget Coalition to chime in on Quinn's address. President Keith Kelleher said in a statement that "we need more than a 1% increase to pull Illinois out of this budget crisis":

For months, child care providers, home care agencies, social service providers and school districts throughout the state have been sounding the alarm about Illinois' fiscal crisis. The budget proposed today should make it painfully clear that those alarms were real and our state's house is on fire.  We simply cannot continue to provide the services that millions of Illinois families depend on without adopting a plan to raise significant revenue. While the Governor has the right approach in calling for new revenue, we need more than a 1% increase to pull Illinois out of this budget crisis. Working families are now looking to the General Assembly to step up and enact a fair and adequate income tax increase like HB 174 that will put a stop to these devastating cuts to home care, child care and vital human services.

We'll be posting additional responses as the day goes on.

UPDATE (1:59): Here's the response from the Responsible Budget Coalition. They are not pleased:

"The 200-plus organizations of the Responsible Budget Coalition believe the best and fairest way to adequately fund all our essential priorities--not just education but health care, human services, public safety and more--is through comprehensive tax reform like House Bill 174.

"A one-percent tax increase falls far short of the comprehensive tax reform that's needed. It is an invitation to put off real solutions yet again.

"Illinois communities are already hurting from the failure of legislators to stop damaging cuts and delayed payments to education, human services, public safety and more. If they fail again to support a responsible budget with adequate revenue, they will not only force schools to cut thousands of teachers, but cities will lay off police and close libraries, and our state will turn its back on the most vulnerable in their time of need.

"That’s an outrage, particularly when the right course of action is clear. Rather than slash jobs just as our economy begins to rebound, and reduce vital services when they’re needed more than ever, lawmakers should reform the state’s tax structure and finally fix the broken budget.

"We reject the politics as usual in Springfield that gave us years of cuts, borrowing and delays. That's what got us into this mess. To get out, we need a balanced approach that includes adequate revenue, just as more than 30 other states have raised taxes in the past year to meet the challenges of the recession.

"Anything short of fixing the broken budget is irresponsible. It will force more hardship on every part of the state. Elected officials should act responsibly and pass tax reform like HB 174 to save jobs, pay the bills, fund vital services and build a better Illinois."

UPDATE 2 (2:28 pm): We just got off the line with Anders Lindall from AFSCME Council 31, whose organization is frustrated with both the size of the income tax increase and the reduction in revenue sharing for local governments.

Even before today, the choice was clear. Lawmakers could fix our broken budget -- saving the jobs and services that are needed now more than ever --- or they could repeat the mistakes of the past: cuts, borrowing that's unsupported by revenue, and future payment delays. It's disappointing that the proposal laid out by the governor falls short of a comprehensive fix.

UPDATE 3 (2:43 PM): John Bouman, president of the Sergeant Shriver National Center on Poverty Law, echoes the criticisms of the RBC, calling the 1 percent income tax proposal "an invitation to avoid the comprehensive solution that's needed." Here's more:

A temporary band-aid isn't going to get us through this crisis or pay our unpaid bills. The basic [budget] outline should be a wake-up call for all of us that a real solution is needed. This [1 percent income tax hike] is disappointing  because the governor himself fails to answer the call he set forwad with his own budget proposal.

UPDATE 4 (4:46 pm): More reactions keep coming in. First, we have Illinois Action for Children, who is angered with a proposed $76 million cut to child care:

“We respect the importance of balancing the state budget and the challenges in doing so in this economic climate, but the solution to this crisis clearly should not involve cutting the most critical supports that allow our most vulnerable working families to continue to work and generate goods, services, and tax revenue for this state,” said Maria Whelan, president of Illinois Action for Children. “This is also not a crisis that can be solved by just borrowing billions and hoping for the best.”

According to Whelan, House Bill 174 provides the framework for tax reform that increases revenue in Illinois while reducing the tax burden on low-income working families. It was passed last year by the state Senate but has yet to be voted on by the House of Representatives.

“It is painfully obvious that Illinois needs increased revenue that is sufficient to not only fund education, but also the vital services that children and families depend on,” said Whelan. “Our elected officials need to show up to Springfield and actually demonstrate the courage needed to get this job done before it is too late.”

Voices for Illinois Children's Kathy Ryg, who knows a thing or two about the state legislature, added her two cents, as well:

In light of the devastation descending on children and families in Illinois, it is time that lawmakers get serious about addressing the fiscal crisis by a balanced revenue-reform plan.  The budget address failed to provide direction for modernizing the state’s tax system in a fair way and compounds the loss of jobs by failing to raise revenue to pay providers who can no longer sustain the cuts to their programs and will close their doors.  This is counterproductive to what is needed – a plan to reform Illinois’ outdated tax system, maintain programs and services that keep people employed and provide vital services for struggling families, and reasonable efficiencies that will stabilize spending.  Further cuts and borrowing in a vacuum of a sustainable budget solution mean more harm to children and families and higher costs for everyone in Illinois.


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