Gov. Pat Quinn delivers his annual budget address to a joint session of the General Assembly in the House chambers at the state Capitol Wednesday in Springfield. (AP Photo/Seth Perlman)
Election-year deja vu: Quinn campaigns on tax increase plank
SPRINGFIELD — Gov. Pat Quinn has done it once before, and he’ll be doing it again in 2014 as a Democratic incumbent campaigning as the lead cheerleader for a tax the vast majority of Illinoisans dislike.
Quinn’s announcement Wednesday that he intends to push for a permanent extension of a temporary income tax he enacted in 2011 represents a huge political Achilles’ heel for him in his campaign against Republican Bruce Rauner.
But will it be fatal?
It’s too early to judge, though Dawn Clark Netsch’s 1994 campaign for governor largely was derailed by early summer that year because of her advocacy for an income-tax increase as part of a school-funding, tax-swap plan.
Quinn, by contrast, ran and narrowly won the Executive Mansion in 2010 when he embraced a 1-percentage point increase in what then was Illinois’ 3-percent individual income tax.
The governor’s call Wednesday for making the 2011 income-tax hike permanent, delivered during his 25-minute budget address to a joint session of the General Assembly, brought forth superlatives such as “courage” from House Speaker Michael Madigan’s lips.
But Rauner, the multimillionaire private equity investor with the seemingly boundless television advertising budget, tore into Quinn Wednesday for breaking promises with a tax stance that embodies “a doubling down on his failed policies.”
Income-tax rates for individuals that had been raised in 2011 from 3 percent to 5 percent are scheduled to drop to 3.75 percent in January without legislative intervention. Likewise, the rate for businesses, which stood at 4.8 percent in 2011, jumped to 7 percent after the tax increase and is scheduled to drop to 5.25 percent in January.
Quinn had spent months dodging questions about whether he favored extending the higher tax rates permanently. But Wednesday, the governor said he was all about leveling with voters heading into the fall elections, working in an unmistakable dig at Rauner, who has favored spending cuts and a sunsetting of the higher income-tax rates.
“I was elected in 2010 to be straight with the people of Illinois and to be straight with you. The truth is, those who are telling you that Illinois can tax less and spend less and still expect to fund education are simply not telling you the truth,” Quinn said.
Rauner, while not mentioned by name in Quinn’s budget speech, quickly accused the governor of breaking his word in the 2010 campaign, when he advocated increasing the income tax to only 4 percent, not 5 percent. Rauner also slammed Quinn for telling voters in 2011 the income tax hike he enacted would be temporary.
“Pat Quinn first promised the working people of Illinois he wouldn’t raise taxes by 67%. He broke that promise, taking away nearly a week’s worth of pay for Illinois families. Then he promised his tax hike would be temporary. Today he broke that promise too and is doubling down on his failed policies,” Rauner said in a prepared statement.
“After five years of Pat Quinn’s failed leadership, we have record tax hikes, outrageously high unemployment, massive cuts in education, and there’s still a giant budget mess in Springfield. It’s now or never to save Illinois. We can balance the budget without more tax increases, if we create a growth economy, and restructure and reform our broken government. That’s what I’ll do as governor,” Rauner said.
While the jousting over the income tax took center stage, Quinn used his budget plan as a platform to unload several other election-year goodies that undoubtedly will play well to his Democratic base, starting with the promise that keeping the income tax will stave off what he called “savage” program cuts.
“I propose today a solution that protects our children, our working families, and our seniors by preventing radical cuts to education and critical services — a solution that provides significant tax relief to homeowners and working families, while investing like never before in education and early childhood,” Quinn said.
In one of several nods to the middle class, the governor paired his push for keeping the existing income tax rates with a proposed doubling of what the state spends on property tax relief. The upshot is that Illinois homeowners could see annual $500 refunds in their mailboxes or bank accounts by early 2015 if his plan comes to fruition this spring.
The governor also proposed a doubling of the earned income tax credit for Illinois’ working poor, spending an additional $100 million on early childhood programs and investing $50 million in new funding for the state Monetary Assistance Program, which provides scholarships for low-income college students.
Siding as he did on the income-tax question enabled Quinn Wednesday to rule out some other revenue options that are equally unpopular with voters.
He said he is against broadening the state sales tax base by imposing “any new unfair taxes on everyday services that working people rely on. It hurts working families the most to tax basic services like going to the laundromat, like taking your child to daycare, like visiting the barber shop or taking your dog to the vet.”
The governor also said he was against taxing retirement income, which the government-finance watchdog, the Civic Federation, proposed in a recent report. Rauner has not ruled out the possibility.
“I will not take the Social Security checks that our seniors on fixed income rely on,” he said, drawing applause from Democrats. “We shouldn’t balance our budget on the backs of our senior citizens.”
The governor’s speech did not directly address a plan pushed by the House speaker to impose a 3-percent surcharge on the state’s nearly 14,000 millionaires to help raise $1 billion for schools.
Throughout his address, Quinn was interrupted by Democratic applause when he delivered lines about the need to spare education from deep cuts and to boost spending on MAP scholarships and on his vow not to tax retirement income. Republicans sat on their hands for the governor’s speech.
Afterward, in perhaps a sign of the coordinated campaign that Democrats promised earlier this year to help re-elect Quinn, Madigan and Senate President John Cullerton, D-Chicago, were in lockstep in praising the governor’s spending plan. Both predicted votes on the income-tax extension this spring, even it means without Republicans.
“I plan to support the governor’s position on the extension of the income tax,” Madigan said in an Illinois Public Television interview following Quinn’s speech.
On the governor’s performance Wednesday, Madigan offered praise to Quinn for showcasing “political courage and honesty” with his stance on the income-tax question.
“Unlike previous governors who didn’t live up to the problems of financing the state, Gov. Quinn has come in here today, and as he said, he told the truth. He laid the cards on the table,” Madigan said. “If we wish to continue to provide the level of services we’ve become accustomed to for education and other purposes, then the income-tax increase should be extended.”
Madigan also twice characterized the property-tax refund concept that Quinn championed as “my demand.”
Cullerton was equally effusive of the governor’s stance and said it would buffer the state’s most vulnerable residents from devastating budget cuts that would be required if the income-tax rates went down in January.
“Voting to maintain our current tax rate is a responsible action that keeps Illinois’ income taxes among the lowest in the nation. It will allow us to honor our obligations, preserve education funding and secure our financial future for generations to come,” Cullerton said in a prepared statement.
But echoing Rauner at the top of their fall ticket, the two top Republicans in the Legislature — Senate Minority Leader Christine Radogno, R-Lemont, and House Minority Leader Jim Durkin, R-Western Springs — accused Democrats of exaggerating the level of cuts needed without the higher income-tax rates and hammered Quinn for breaking his word on the higher rates being temporary.
“The Democrats who run this building do not tell the truth about taxes and spending,” Durkin told reporters as Radogno stood at his side, nodding in agreement.
Contributing: Elise Dismer