The PJ Tatler

Illinois tax hike

What’s worse than government raising taxes astronomically? How about government raising taxes astronomically while rushing to meet an adjournment deadline.

Perhaps no state except California is in such dire fiscal straits as Illinois and the pols in Springfield have come up with a super fantastic solution to the crisis; destroy the economic base of the state by nearly doubling business taxes while hitting wage earners with a 75% increase in state income taxes. This, plus a $1 a pack increase in cigarette taxes will supposedly get the state out of the hole.

Did I mention they want to increase spending for education by $700 million while they’re at it? There’s also talk of cutting a check for property owners for tax relief but no one is holding their breath on that one.

The real problem is that the current session of the legislature is a lame duck session, with newly elected members coming in next week who will almost certainly be even less enamored with this deficit reduction plan as the current crop of lawmakers – many of whom don’t have anything to lose by voting for an eye-popping increase in taxes as the plan described above because they’ve been retired by the voters. The Illinois House has already adjourned and the Senate will depart tomorrow, although they may be called back by the governor to vote on the tax increase sometime over the weekend.

Clout Street is now reporting that this plan is mostly kaput and lawmakers are scrambling to come up with a measure that could pass in the lame duck session:

A major income-tax increase would be slightly scaled back under a plan state lawmakers were briefed on today as the clock winds down to act.

The income tax rate for individuals and families would rise from 3 percent to 5 percent — a 66 percent increase — instead of to 5.25 percent, which was under consideration last week.

Senate President John Cullerton, D-Chicago, said the discussions are the result of a backlash over the earlier proposal.

Business taxes would “only” rise to 7% instead of the 8.4% under the failed plan.

Incredibly, the major beef by some Democrats against both plans is that they don’t include increased spending for municipalities hard hit by the fiscal crisis:

Rep. Susana Mendoza, D-Chicago, said she doesn’t support the plan as it stands because it would not provide any additional money for cities, even though the state has recently forced local municipalities to pay more into their pension retirement systems. Mendoza is running for Chicago city clerk in the Feb. 22 election.

Crisis? What crisis?

Finally, a real “Let them eat cake” moment. Small convenience stores and gas stations along the border with Indiana, Iowa, Missouri, and Wisconsin are protesting the buck a pack increase in cig taxes because their customers can simply drive a little farther and save big time on out of state tobacco products. The response of the pol who sponsored the cigarette tax increase is filled with typical empathy and heartfelt concern:

Opponents included groups representing convenience stores who say the hike will hurt small businesses, particularly along the border where smokers could easily buy cheaper cigarettes out of state.

Currie said those stores should “sell more pop.”

She is speaking too soon. A proposal to drastically increase taxes on soda and other snacks will be up for discussion in the next session.