CHICAGO — Hours after Illinois lawmakers chose a major tax rate increase to ease this state’s desperate budget crisis, questions lingered on Wednesday: Would new income and corporate tax rates stunt the growth of businesses and jobs here and, in turn, slow the already stalled revenue picture that has struck so many states? Would the state’s tax package, which is expected to raise about $6.8 billion annually, be enough to solve the state’s crisis, which includes a vastly underfinanced pension plan?Patrick J. Quinn, the governor of Illinois and a Democrat, praised the decision of state lawmakers — in the wee hours of the morning on Wednesday — to raise the individual income tax rate by about 66 percent as a necessity to avert the state’s “fiscal emergency,” which includes a budget deficit of more than $13 billion, about $8 billion in unpaid bills to social service agencies, pharmacies and others, and a sinking bond rating.“Our state was careening towards bankruptcy and fiscal insolvency,” Mr. Quinn told reporters, after indicating that he intended to sign the tax increase.Meanwhile, in places like neighboring Wisconsin, Scott Walker, the new governor and a Republican, promptly issued a call to businesses in Illinois, which will face a business tax rate increase of 46 percent. Quoting an old tourism slogan from that state — “Escape to Wisconsin” — Mr. Walker urged businesses to consider moving to his state, where, he said, they would be quite welcome.Under the legislation, the income tax rate would temporarily rise to 5 percent from its current rate of 3 percent, and the rate for corporate taxes would rise to 7 percent from its current 4.8 percent. As part of the deal, the state’s spending growth would be limited from one year to the next over the next four years — a provision Republicans complained did not cut spending enough.
Wednesday, January 12, 2011
I normally don't post news stories that don't take place in Florida, but this was too insane to pass up.