State GOP leaders push income tax repeal

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Radogno

Updated: February 14, 2012 10:29AM

Top Illinois Republicans renewed calls Thursday for an immediate repeal to the state’s income tax hike, blaming the bulk of the state’s fiscal woes on the year-old increase.

While chances of a repeal are remote — especially when Democrats control the Legislature and governor’s office — the move previewed what Republicans will likely make central campaign issues this year.

Senate Minority Leader Christine Radogno and House Minority Leader Tom Cross claimed the tax increase has affected the state’s unemployment rate, made the state less competitive for business and led to increased overall spending, claims Democrats said had little merit.

“We would not continue to spend at the rate we’re spending had this increase not been passed,” said Radogno (R-Lemont). “That’s part of the unpredictability and instability that makes Illinois such an unwelcoming state.”

She and Cross called for fiscal reforms to the state’s $85 million underfunded pension system, saying they’re willing to tackle the issue this year, something Gov. Pat Quinn also has vowed.

Cross said the state also needs to freeze salaries in the next round of negotiations with the American Federation of State, County and Municipal Employees and further reform Medicaid.

“We created this hole that got bigger and bigger,” he said. “We failed to some of the key structural issues.”

The leaders spoke in Chicago with members of the think tank, the Illinois Policy Institute, which released a report Thursday calling the tax hike a failure and that the new revenue took away incentive to make big reforms. The budget pushed off some Medicaid bills to the following year, adding to Illinois’ massive backlog of unpaid bills.

Quinn signed legislation last year that raised the personal tax rate to 5 percent from 3 percent — or about a 66 percent increase — for four years. It also boosted corporate income taxes. The move was meant to help close a $15 billion budget deficit, the state’s largest budget hole in history. No Republicans voted for the increase.

Legislation for a repeal was filed shortly after, something both Radogno and Cross said they support. But they acknowledged the difficulty in actually passing it.

The income tax generated about $7 billion for the state last year, according to Quinn budget spokeswoman Kelly Kraft.

She dismissed the GOP and think tank’s claims, saying that pension costs have jumped drastically and without the increase the state would have had to make drastic cuts. She said a repeal would mean laying off educators and cutting services to veterans, among other things.

“If they want to come to us with a plan to repeal reality, then we can take the plan seriously,” Kraft said.

A spokeswoman for Democratic Senate President John Cullerton — who has said that the state had a balanced budget this year — said the increase stabilized funding.

“What is clear is that repealing the tax doesn’t get us any closer to sound financial footings,” said Cullerton spokeswoman Rikeesha Phelon. “We need for Republicans to roll up their sleeves and give us real ideas on how to cut spending.”

Kent Redfield, a political science professor at University of Illinois, said the state’s fiscal problems go far beyond repealing the income tax hike.

“If you take that out of the budget, then the question is: What weren’t you going to pay if you didn’t have that?” he said.

“This involves really, really hard tradeoffs to match up revenues and expenditures.”

He said the call for the repeal — which came the same day the first massive snow storm of the season hit the region — was a good way for Republicans to draw attention to the one-year anniversary of the increase.

He said, “It’s political theater on a snowy day.”