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Extend 2011 income-tax hike this spring, key Senate Dem urges

SPRINGFIELD-Fearing “devastating” program cuts, a key Senate Democrat who heads one of her chamber’s budget-writing committees called Thursday for a vote this spring to extend Illinois’ lapsing, temporary income tax hike.

State Sen. Heather Steans, D-Chicago, said she intends to introduce legislation to prevent the temporary tax increase passed in 2011 from rolling back in January.

“I realize no one wants to talk about this, particularly during election season, but I think we owe people the truth,” Steans, chairwoman of the Senate Appropriations I committee, told the Chicago Sun-Times.

“Anyone who’s being honest with the voters and taxpayers will have to admit that people will suffer if we allow the income tax to ratchet down in January,” she said.

Steans’ comments came as the Democratic-led state Senate, over Republican opposition, established a $34.5 billion spending ceiling Thursday for the upcoming state budget year that begins in July.

Gov. Pat Quinn and state lawmakers face the task in the weeks ahead of putting together a new budget not knowing whether a big financial hole will occur beginning in January when the temporary income tax hike sunsets.

Without any legislative intervention, the personal income tax will drop from 5 percent to 3.75 percent while the corporate income tax will fall from 7 percent to 4.8 percent.

If rates drop like that, Quinn’s office has estimated a $1.9 billion shortfall in the upcoming budget cycle and $4.1 billion shortfall the following year. The governor, who will propose his 2015 budget on March 26, has not indicated whether he favors letting the rollbacks occur or extending the hikes.

If the state is left with big financial holes to fill in Fiscal 2015 and beyond because of less income tax revenues, Steans predicted 23,000 low-income children could lose state-subsidized child-care services, 12,000 seniors could lose “caretaking help,” and 40,000 mentally ill Illinoisans and another 10,000 with substance-abuse disorders could lose treatment services provided by the state.

“I’ve come to the conclusion that for anyone who cares about the most vulnerable in our state, we simply cannot allow the temporary income tax increase to expire,” Steans said. “If allowed to go through, this would cut funding next year another 14 percent, on top of previous reductions, leading to devastating consequences for the most vulnerable Illinoisans who can least afford it.”

Steans said she would “prefer a vote this session rather than the usual politics of waiting until after the election” and said she has not spoken to Senate President John Cullerton, D-Chicago, about her intended push. “I do not think he would be surprised by my position,” she said.