Wisconsin economic development from south of the state line

The Illinois Policy Institute:

Members of the Illinois House of Representatives passed into law the largest permanent income tax hike in state history July 6, successfully overriding Gov. Bruce Rauner’s July 4 veto of a larger budget package.

The override vote with respect to Senate Bill 9, the revenue portion of the budget that includes a tax hike, passed on a 71-42 vote. Ten House Republicans voted yes.

The override passed the Senate July 4 on a 36-19 vote, with one Republican voting yes, state Sen. Dale Righter from Mattoon. Righter also voted in favor of the tax hikes in order to send the bill to the governor in the first place.

The budget package will now become law despite Rauner’s veto.

The personal income tax rate will increase to 4.95 percent from 3.75 percent and the corporate income tax rate will rise to 7 percent from 5.25 percent, retroactive to July 1.

Moody’s Investors Service has indicated that even with the budget deal, Illinois is likely to become the nation’s first junk-rated state.

Despite a 32 percent income tax hike, the budget package is devoid of any structural spending reforms to slow growth in the cost of government: It lacks comprehensive property tax reform, major pension reform, collective bargaining reform, reforms to Medicaid and more.

Illinoisans may recall the 2011 temporary income tax hike, which also took a tax-hike-without-reform approach. Despite $32 billion in extra tax revenue, the state’s unpaid bill backlog only declined by $1.3 billion (to $6.6 billion from $7.9 billion), and pension debt rose by $25 billion.

statewide poll conducted in May by Fabrizio, Lee & Associates and commissioned by Illinois Policy revealed nearly two-thirds of Illinoisans surveyed opposed a budget that included a state income tax hike.

In comparison, Wisconsin has four income tax rates, ranging from 4 percent (to $14,180 in taxable income for a married couple filing a joint return) to 7.65 percent (beyond $336.320). Wisconsin’s corporate income tax rate is also higher than Illinois’ rate, 7.9 percent. If ever there was a reason for immediate state income tax cuts, this is it.

Evidently not everyone in Illinois opposes this ridiculous tax increase. This is an actual tweet from Illinois state Rep. Chris Welsh (D–Chicago) …

… that demonstrates the state of Illinois schools’ math instruction.

Readers may recall that some derided Lt. Gov. Rebecca Kleefisch for recruiting businesses from Illinois during Recallarama. I certainly hope she’s on the phone today and henceforth. This state would even take Bears and Cubs fans.

 

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