In yesterday’s early morning hours, the Illinois Senate joined the House and passed the largest tax increase in the state’s history. Among the provisions are an increase of 66.7% in the personal income tax rate and an increase of 45.8% in the corporate income tax rate.
Governor Pat Quinn, who had vowed during his election campaign to veto any income tax hike greater than 33% is expected to sign the measure into law. Apparently, he viewed his narrow half percentage point victory in November when he lost 99 of 102 Illinois counties as a mandate for pushing the state’s most sweeping tax package ever.
Most striking about the tax package, however, is the manner in which it was accomplished. Mimicking the tactics used by former U.S. House Speaker Nancy Pelosi and U.S. Senate Majority Leader Harry Reid to pass health care legislation last year, the bills were largely cobbled together behind closed doors by Democrats and passed over massive public opposition in the middle of the night without a single Republican vote. Most galling is the fact that this major legislation passed by razor slim margins in both houses on the final day of the lame duck session. It is unlikely that the measures could have passed in the new legislative session with reduced Democrat majorities in both houses of the General Assembly.
Ironically, after shutting them out of the negotiations, House Speaker Mike Madigan did his best imitation of Nancy Pelosi and said of Republicans after the vote, “They’re on the sidelines. They don’t want to get on the field of play.” Republicans have been quite vocal on the need to cut spending and reduce waste in government to reduce the deficit, but no cuts were included in the legislation.
Republican Sen. Matt Murphy of Palatine said of the Democrats, “Your number one priority is supporting state spending at or above the current level. . . Illinois’ corporate tax rate will be the fourth highest in the nation. All the while, spending continues to go up.”
Murphy and other Republicans have contended that such huge increases would drive companies and jobs from the state, further hurting the state’s deficit position. This position was even echoed by outgoing Democrat mayor Richard Daley of Chicago.
The largest beneficiaries of the tax hikes may be neighboring states likely to benefit from the exodus of jobs and business from the state. Commenting on the situation on Chicago talk radio yesterday, Indiana Governor Mitch Daniels said, “You guys are nothing if not entertaining. It’s like living next door to the Simpsons — the dysfunctional family down the block.” Wisconsin Governor Scott Walker, whose campaign slogan had been, “Wisconsin is Open for Business,” simply advised, “Escape to Wisconsin.”
Of course, Pelosi and Reid’s tactics swept a huge wave of Republicans into Washington as voters turned to Tea Party candidates who promised fiscal responsibility, constitutionally sound government, and a return to free enterprise principles. Pelosi lost her job as Speaker as the GOP took the majority in the U.S. House of Representatives and Harry Reid saw his Democratic majority in the Senate shrink substantially.
Importantly, these principles resonated with Illinois voters who sent five additional Republican House members and a new Republican U.S. Senator to Washington as part of the state’s Congressional delegation. In fact, sensing this new political reality was the reason that this tax issue was brought up in the lame duck session in the first place. The state’s current Democrat leaders knew that it could never pass in the more conservative incoming General Assembly.
This blatant disregard for the will of the voters is likely to cost Democrats in the state, and soon. Sen. Murphy has already vowed to fight the just-passed tax increases, saying on Wednesday, “The fight to repeal begins tomorrow.” Conservative groups like the Illinois Policy Institute and Patriots United, who had worked hard to prevent passage, are now equally committed to rolling the increases back. The key question will be whether the state’s largest population center in Cook County will back the repeal. Eventually, even the diehards in and around Chicago will have enough of an abusive and unresponsive one-party government.
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