CHICAGO – A proposal to ask Illinois voters to increase the state income tax on top earners failed to clear the House.
The constitutional amendment sponsored by House Speaker Michael Madigan, D-Chicago, fell short of the the three-fifths majority of 71 needed to pass, on a 68-47 vote. Democrats hold 71 seats in the House, but two voted against the bill and one didn't vote.
The legislation is similar to a Madigan proposal last spring, which also failed on a similar vote despite state voter support for the so-called "millionaire's tax" in an advisory referendum.
Madigan's proposal would raise about $1 billion that would go directly to education on a per pupil basis by imposing a 3% surcharge on top of the state's current individual flat income tax rate of 3.75%. A constitutional amendment is required because the flat tax is part of the state constitution.
"For the second time in less than a year, Republican legislators have rejected the wishes of their constituents and opposed a measure requiring the top 1 % to pay more to help boost education funding in Illinois," Madigan said in a statement after the vote. "This proposal is not a partisan issue. The people of Illinois spoke – they believe a surcharge on millionaires is a good way to get our schools the help they need."
Republicans attacked the plan and accused Madigan of "playing politics."
"Going into the vote today it was clear that there was never a supermajority in support," said House Minority Leader Jim Durkin, R-Western Springs. "This type of vote simply provides political propaganda for the upcoming fall election. I suggest we get back to solving the budget impasse rather than playing politics."
Gov. Bruce Rauner and the GOP minority remain locked in a 10-month-old impasse with the General Assembly's Democratic majority over a fiscal 2016 budget. Democrats want to tackle the budget alone and trim a $5 billion to $6 billion deficit through a mix of cuts and tax hikes while Rauner wants his governance and policy initiatives to be included in any deal.
Also this week, the Department of Revenue announced that local governmental units owe the state $168 million due to an error it made in allocating collections from the personal property replacement tax.
The state distributed $1.4 billion from the tax last year. The tax replaces revenues local governments lost after the 1970 constitutional convention took away their power to impose personal property taxes on businesses. "We are certainly sensitive to the impact recouping these funds will have on some of our taxing districts," said department director Connie Beard. "We will be working with the impacted taxing districts to establish a plan to recapture the funds over an extended period of time."
The fiscally distressed Chicago Public Schools owes the state $23.5 million, Chicago owes $19.4 million and Cook County $6.5 million, and the Chicago Park District $5.6 million.