The state’s first budget in two years.
The Illinois House voted to override Republican Governor Bruce Rauner’s veto of the income tax hike and budget bill. This is the first budget Illinois has passed in two years.
The House voted 71-42, which is the bare minimum House Speaker Mike Madigan needed, after a security incident delayed the vote for two hours.
The House passed the tax hike and budget bill on Sunday with 72 votes, including 15 Republicans. A few flip flopped, according to The Chicago Tribune:
On Thursday, there were some slight changes. One lawmaker who previously voted for the income tax hike on Sunday, Republican Rep. C.D. Davidsmeyer of Downstate Jacksonville, voted against the override. Democratic Rep. Sue Scherer of Decatur had voted against the tax hike on Sunday but voted in favor of the override Thursday. In addition, Rep. Robert Pritchard of Hinckely voted for the tax hike Sunday but was absent Thursday.
The Republicans lacked five representatives with excused absences. One of those voted yes for the bill on Sunday.
Rauner lashed out at the bill on Wednesday as he went around Springfield to try to change the minds of those who voted for the bill. From ABC7:
The first-term governor, already facing several Democratic heavyweights hoping to displace him in the 2018 election, took to the trail Wednesday to implore the House – run by Speaker Michael Madigan of Chicago – to sustain the vetoes.
“This is not just a slap in the face to Illinois taxpayers. This is a 2-by-4 smacked across the foreheads of the people of Illinois,” he told reporters at a bar on Chicago’s far South Side. “This tax hike will solve none of our problems. In fact, in the long run, it will make our problems worse, not better.”
The bill includes an income tax and corporate tax hike and a budget plan of $36 billion:
The budget plan would spend more than $36 billion on primary and secondary education, colleges and universities, social services, medical care for the poor and other government functions, with nearly $5 billion in new taxes to help pay for it. The personal income tax rate would rise from 3.75 percent to 4.95 percent. The corporate tax rate would go from 5.25 percent to 7 percent. The plan also would have the state pay down about half of the nearly $15 billion pile of unpaid bills through a combination of borrowing and using cash from other state accounts.
Illinois’s crating rating is still just a notch above junk. Madigan got all excited because Fitch Ratings and S&P Global Ratings urged Rauner to sign this bill on Sunday. But Fitch told Madigan to calm down because even with the override, nothing guarantees these rating companies will not drop Illinois to junk. From The Chicago Sun-Times:
During that lag, Moody’s Investor’s Services on Wednesday offered a stark reminder, placing the state’s current rating of Baa3 “on review for possible downgrade.” Moody’s and two other credit agencies had warned lawmakers of a “junk” downgrade should they not enact a budget by July 1. But last week, S&P and Fitch called the passage of the budget bills progress.
Still, according to Moody’s, “despite the progress toward budget balance” in the legislative package, “… the plan appears to lack concrete measures that will materially improve Illinois’ long-term capacity to address its unfunded pension liabilities.”
That’s because the budget bill lacks…A LOT. Illinois has “unpaid bills to state contractors and vendors that’s reached about $14.5 billion and roughly $130 billion in unfunded pension liabilities.” Last Friday, a judge ordered the state to “start paying $293 million in state money toward Medicaid bills every month and an additional $1 billion over the course of the next year.”
The House should have started its session at 1:30PM CT, but emergency officials had to lockdown the building “after a woman allegedly threw a powdery substance in the governor’s office.”DONATE
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