By Jamey Dunn
Gov. Pat Quinn signed a bill today to increase Illinoisans' personal and corporate income tax rates.
Under the new personal rate, Chicago Democratic Rep. Barbara Flynn Currie estimated that a family of four with an income of $40,000 would pay roughly $800 more a year.
The personal income tax has increased from 3 percent to 5 percent, and the corporate tax has gone from 4.8 percent to 7 percent. Both rates are scheduled to drop after four years, to 3.75 percent for personal income tax and to 5.25 percent for the corporate income tax. The plan is expected to bring in roughly $6.5 billion in its first year.
The measure also includes spending caps for the next four fiscal years. The limits are: $36.8 billion in Fiscal Year 2012, $37.5 billion in FY 2013, $38.3 billion in FY 2014 and $39.1 billion in FY 2015. If the legislators spend more, the tax increases would be nullified. It is be up to the Illinois auditor general to determine whether the state has overspent.
Republicans did not support the tax increases, saying they will hurt businesses and chase jobs out of the state. The Democrats who supported the bill said the state could not get out of its current budget crisis without new revenues.
“This is a temporary income tax to deal with the immediate fiscal emergency our state faces. To pay the bills so we don’t have severe cutbacks in education, health care, public safety—important things that are absolutely vital to the lives of the citizens,” Quinn said at a news conference on Wednesday.
Quinn has yet to take action on another major piece of legislation passed in the final days of session: a measure to abolish the death penalty in Illinois. Quinn said during his campaign that Illinois should have capital punishment as an option for the worst crimes. He also supports the moratorium, which was put in place more than 10 years ago by former Gov. George Ryan. Quinn would not indicate his intentions for the bill. He said he will have to take it under careful review — by studying the history and seeking the opinions of people on both sides of the issue — because it is such a big decision.