Governor Quinn Proposes Massive Tax Increases
As expected, Governor Pat Quinn announced today the largest tax increase in Illinois history in an effort to close the State of Illinois’ $11.6 billion budget deficit.
While CICI and others argued that in these difficult economic times now is the worst time to raise taxes, Governor Quinn appears committed to his plan of raising taxes on Illinois’ most productive citizens and businesses. The plan clearly is viewed as a “populist”.
Here are the highlights of Governor Quinn’s budget address:
● Increase overall state spending by 4.1% or $2.1 billion
● Raise Corporate Income Tax from 4.8% to 7.2% - a 50% increase
● Raise Personal Income Tax from 3% to 4.5% - a 50% increase
● Raise Personal Exemption from $2,000 to $6,000 – a 200% increase
● Increase state Cigarette Tax by $1 a pack to $1.98
● Increase fee for License Plates by $20 to $99
● Increase fee for Driver’s License by $10 to $20
● Cut retailer’s collection discount to .75% from 1.75%
● Proposed Sales Tax Holiday for “Back-to-School” items for 10 days in August
● Divert $200 million from dedicated funds (NPDES, Pesticide Fees, etc.)
● Eliminate $287 million in Corporate Tax Incentives
● Proposed $1.3 billion in spending cuts through employee furloughs, health insurance changes, government reorganization, and some pension funding changes
● Use $4 billion in Federal Stimulus to fill the state’s budget gap (which leaves a massive financial hole to fill in Fiscal Year 2011)
The Governor intends to use the doubling of the driver’s license fee and the $20 increase in vehicle registration in part to pay for $26 billion in construction programs over 6 years for roads, bridges, schools, and mass transit.
This week’s CICI Legisletter will have more details on the Governor’s plan.
Please note that the Chemical Industry Council of Illinois Legislator is not intended to convey legal advice or set forth all legal requirements applicable to particular circumstances.
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