The Final, Final, (Yes, is really is Final) Veto Session Wrap-Up
Balancing the state budget and paying the backlog of bills owed by the State continues to be a priority for me. Earlier this week, the General Assembly acted on two pieces of tax legislation that will have an impact on those goals.
The first contained two tax relief items for individual taxpayers. One was to increase the percentage of the federal Earned Income Tax Credit (EITC) that could be used by Illinois taxpayers from 5 to 10% over two years. The EITC is targeted to primarily assist low income wage earners with children. Advocates for the EITC believe it is the most effective anti-poverty tax program currently being offered. For more information, see the Voices for Illinois Children web site.
The second was to increase the standard personal exemption for the Illinois income tax. The legislation raised it from $2000 to $2050 next year and would increase by a cost of living adjustment thereafter.
While I support the EITC and believe that it works to keep Illinois families out of poverty, the cost to the state budget is $110 million annually. The increase in the standard exemption is ultimately a $40 million annual cost to the state budget. If we were in more normal fiscal times, I would look more favorably upon this legislation. But right now, I don’t feel we have money to be giving away so I voted no.
This legislation passed with 67 votes in the House (60 is necessary for passage).
The second bill was the corporate tax legislation. It contained a number of business incentives – including a restructuring of the corporate income tax for exchanges like the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE). It also included tax credits for Sears as well as Champion Labs in downstate Illinois. A number of other broadly applied business tax credits were also included. The cost of the second package to the state budget is almost $238 million for the next fiscal year and $253 million thereafter.
Again, because our budget situation continues to be so challenging, I did not feel it was prudent to be giving tax breaks at this time so, again, I voted no.
This legislation passed with 81 votes in the House.
I struggled with the fact that several provisions in the legislative package were targeted to keeping thousands of jobs here in the State of Illinois. I certainly did not want to see those jobs go elsewhere and lose the substantial economic activity they promote. But on balance, I believed it was important to right our state’s fiscal ship and, at that time, have a more deliberate debate on tax policy.
The links to the two bills are:
I hope you and yours have a very happy and healthy holiday season. As always, feel free to keep in touch about any issues or concerns you have. I always welcome your input.