By Bob Lyons. Bob recently retired as retiree rep on the TRS board of trustees.
Speaker Madigan has enough Democrat legislators in the Illinois House to pass a state income tax, but not really. Those legislators in districts that are not solidly Democrat would never be asked by Madigan to take a vote that could cost them their seat. In addition Madigan needed at least some Republicans on the bill to attempt to blunt Governor Rauner
As expected attack that this was a Democrat tax hike. Any Republican that would vote for an increase in the state income tax knew that Rauner would be prepared in the next primary to pour whatever amount of money necessary to take them out.
From our perspective it would take legislators that were willing to put the state of Illinois above their own ambitions, to do what was right rather than what was safe, and to risk the wrath of Rauner.
In the end fifteen Republicans had the courage to do what was necessary to save the state, which then allowed ten Democrats to vote no.
Twelve of the Republicans were from downstate districts, all with either a state university, or a state prison, desperate for more state money. Three Republicans were suburban, and one of them was Representative David Harris, 53rd District and a native of Mount Prospect, and one of the Democrats that took the opportunity to vote no was Representative Michelle Mussman, 56th District and a native of Schaumburg.
The measure, which would raise the income tax to 4.95% and bring in an additional $5 billion, still needs to pass the Illinois Senate, and than facing a certain veto by the governor, both houses would have to vote to override the veto.
We should know Wednesday if the action in the House is enough to dissuade the rating agencies from dropping Illinois bonds down to junk status.
Last week a federal judge ruled on Wednesday that Illinois isnąt in compliance with previous court orders to pay health care bills for low-income and other vulnerable groups as the state heads into a third year without a budget. Judge Joan Lefkow ordered the state to come up with $586 million per month to make immediate payments and to start reducing the $ 2 billion which is owed to health care providers.
Without additional revenue, State Comptroller Susana Mendoza will obviously need to take the money from somewhere else. The monthly payments for TRS are going up from just over $300 million per month to just over $400 million per month in this new fiscal year. I would expect our July payment to be taken by Mendoza to help her to comply with the court order.
We need the tax increase in order to receive our contribution from the State of Illinois for this year.