Senate OKs $34.5 billion spending cap over GOP outcry

SPRINGFIELD- The Senate approved a revenue cap Thursday of nearly $34.5 billion for the next budget year, but Republicans accused Democrats of lowballing the number in a bid to make the 2011 temporary income-tax increase permanent.

The cap, which passed 38-17 in the Senate, represents a drop–off of more than $1 billion in spending from the current fiscal year, which could foreshadow another round of harsh program cuts as lawmakers put together a state budget this spring.

Sen. Toi Hutchinson, D-Olympia Fields, the measure’s chief Senate sponsor, said the figure was based on calculations from the Commission on Government Forecasting and Accountability, a bipartisan budget-forecasting arm of the General Assembly.

But Senate Republicans weren’t happy with the number, pointing out that the Gov. Pat Quinn’s office had a higher revenue estimate of $35.2 billion.

“This is artificially low on purpose to make a tax increase look that much more necessary,” said Sen. Matt Murphy, R-Palatine, who voted against the resolution.

The temporary personal and corporate income tax increases, which passed in 2011, will sunset in January unless the General Assembly votes to keep them in place. If the rates sunset, the personal income tax will drop from 5 percent to 3.75 percent while the corporate income tax will fall from 7 to 4.8 percent.

Quinn’s office has estimated a $1.9 billion shortfall in the 2015 fiscal year, which begins in July, and $4.1 billion the following year if the income-tax rates drop in January. The governor has not signaled whether he favors extending the existing higher tax rates beyond January.

During Senate debate Thursday, Sen. Kyle McCarter, R-Lebanon agreed that the Senate’s revenue estimate looked low and added words of caution that enflamed Democrats.

“Folks, this is not the way to do things,” said McCarter, who voted against the cap. “This is creative accounting, and typically creative accountants go to jail.”

But Sen. President John Cullerton, D-Chicago, assured the Senate that the number did not indicate a Democrat “conspiracy” to make the tax permanent and said the governor had a higher estimate because of how two special funds had been categorized differently.

“We’re not trying to hide it to make the numbers look lower,” Cullerton said. “This is not faulty accounting and this is not the appropriations process. We’re just saying this is the amount in the general revenue fund determining how much we’ll have going forward.”

Sen. Dan Kotowski, D-Park Ridge, went one step farther and said McCarter’s attack on the revenue estimate was offensive.

“I don’t know how anybody could quite possibly impugn the integrity of this process when it is a bipartisan effort,” he said. “It’s a first and important step we’re taking before we allocate money to programs.”

This move comes nearly three weeks before Quinn delivers his budget address to the General Assembly on March 26.