Illinois Public Media News
If you live in Illinois, your taxes have now gone up 67 percent. Governor Pat Quinn has signed the income tax package into law.
The government will get a bigger cut of your next paycheck. Illinois' flat income tax rate is now 5 percent, up from 3 percent. Someone making 40 thousand dollars a year will now pay another 800 dollars in state taxes, not counting deductions or federal tax breaks.
It will stay that way for at least four years when the rate is scheduled to go down. The corporate rate jumps from 4.8 percent to 7 percent, with a similar reversion in four years.
Democrats passed the measure in the wee hours Wednesday morning, among the final acts of the lame duck session. The move is meant to help close a $15 billion budget deficit that threatens to cripple state government.
Governor Pat Quinn says Illinois' fiscal house was burning. "We have an emergency, a fiscal emergency," Quinn said. "Our state was careening towards bankruptcy and fiscal insolvency."
The increase is retroactive, covering all wages earned since Jan. 1 of this year.
Republican legislators are already trying to get the law repealed, and governors of other states are lining up to lure Illinois' businesses, upset that the corporate tax rate is also going up.
(Additional reporting from The Associated Press)
Democratic leaders are fresh off their victory in getting an income tax hike through both chambers of the Illinois General Assembly, but now Republicans in the state Senate are challenging the legislation by calling for its repeal.
State Senator Matt Murphy (R-Palatine) joined his fellow GOP lawmakers in voting against the tax hike, and he is now crafting legislation to repeal the tax increase. Murphy said he is confident an ample number of his colleagues will support the plan, noting that Republicans have more seats in the new legislature. He also said several of the Democratic Senators who voted against the tax hike will continue serving.
"Do I expect the Senate President to allow this bill to move, or the Speaker, or the Governor to sign it?" Murphy said. "I don't, but nobody ever got somewhere by saying I might as well not get started because it probably won't happen."
The legislation calls for a 67-percent increase in the state's income tax along with a spike in the corporate tax. Murphy said the move will cost the state jobs.
It is eliminated that Illinois' budget deficit could reach $15 billion this year. State Senator Dale Righter (R-Mattoon), who serves as the Senate's deputy minority leader, said a tax increase is not something he would make a pledge to block in every situation, but he said in this case, lawmakers have failed to go through the budget line-by-line, and make cuts.
"The tax increase was wrong in the first place," Righter said. "I think it's going to make things worse. It's going to fuel more government spending, and it's going to lead to greater job loss and diminish economic activity."
Governor Pat Quinn says he will sign the income tax legislation, calling it a necessary step to generate revenue.
"It's important for the state government not to be a fiscal basket case, and that's what I confronted when I arrived," Quinn said. "I've said for two years, I said it in campaigns, we needed to restrain spending. We have. And we also need revenue to pay these overdue bills. And we will.
Gov. Scott Walker tried to take full advantage of Illinois lawmakers passing dramatic tax increases Wednesday, saying Wisconsin would welcome any businesses from its neighboring state that care to relocate.
Absent from Walker's sales pitch was the fact that Wisconsin's top income tax rates remain higher than Illinois even under the increase.
Even so, the Republican Walker was reveling in drawing a comparison between Illinois, which has a Democratic governor, and his agenda to cut taxes.
"Years ago Wisconsin had a tourism advertising campaign targeted to Illinois with the motto, 'Escape to Wisconsin,'" Walker said in a statement. "Today we renew that call to Illinois businesses, 'Escape to Wisconsin.' You are welcome here."
Walker referenced Illinois' problem in a speech to business leaders on Tuesday, issued a statement hours after the tax increase vote on Wednesday and then called a news conference to talk about it as well.
Wisconsin lawmakers were picking up on it as well. Rep. Robin Vos, R-Caledonia, said he welcomed any chance to "kind of stick it to them" in Illinois. He said lawmakers there raising taxes played right into Walker's hands.
And while income tax rates are higher in Wisconsin, corporate income taxes in Illinois would be higher.
Wisconsin has a graduated income tax rate that goes from 4.6 percent to 7.5 percent. Illinois has a flat rate that would increase from 3 percent to 5 percent under the move passed by the Legislature to help plug a $15 billion budget hole. Lawmakers there also approved raising the state's corporate income tax rate, effectively moving it from 7 percent to 9.5 percent. Wisconsin's rate is 7.9 percent.
Walker hasn't yet proposed lowering the state's income or corporate tax rates. But he has called for eliminating taxes for companies that move to Wisconsin from Illinois or anyplace else. He also wants to cut taxes on small businesses already in the state. He argues that those moves, along with lawsuit and regulatory reforms, will make Wisconsin a more attractive place to do business.
Vos, co-chairman of the Legislature's budget committee, said he wants to change Walker's small business tax cut proposal into a $1,000 income tax credit to companies for every job created in the state. The Legislature could vote on the tax cut proposals as soon as next week.
The key is that Wisconsin is moving toward lowering taxes while Illinois is raising them, said James Buchen, a vice president at Wisconsin Manufacturers and Commerce, the state's largest business group.
"It just makes Wisconsin look more attractive relative to our neighbor to the south," Buchen said.
Walker has adopted the mantra that "Wisconsin is open for business" and has repeated it at nearly every turn ever since his election in November. He's pledged to add 250,000 jobs in Wisconsin by 2015.
Wisconsin faces a two-year $3 billion budget shortfall. Walker has said his budget, which will be released next month, will balance even with the business tax cuts he's already proposed.
While Walker's talking about taking jobs away from Illinois, Wisconsin's neighbor has already tried to woo Talgo Inc., a train maker that said it will move its manufacturing jobs out of Milwaukee next year because the state rejected federal funds for high-speed rail.
Talgo spokeswoman Nora Friend said Illinois's tax structure would be one of many factors in determining whether the company would relocate its manufacturing there.
"Illinois is still a very strong state because of its strong supply chain and strong will to expand its rail plan," she said Wednesday. "Our analysis includes a lot of factors. (The tax situation) would not weigh in as a positive but it's difficult to say whether it's the deciding factor. It would be one more factor that gets weighed in."
She said Illinois, Washington and Florida are among the top three candidates for Talgo's new site.
A company in Decatur that produces police radar and traffic enforcement equipment for police agencies in the United States and in other countries is moving its manufacturing division to Arizona and California.
Decatur Electronics will relocate the department to a larger 50-thousand square foot facility near Phoenix Sky Harbor Airport, and it will also set up an assembly line in San Diego. Forty-three workers would be affected as a result of the move, and 10 of those employees are customer service representatives who will relocate to Arizona.
Tim Roberts, the company's customer service manager, said the sluggish economy has meant that fewer law enforcement agencies are buying new equipment, and instead ordering upgrades or repairs. He said the motivation behind the move is part of an effort to strengthen business
"We're going to a much bigger facility that will allow us to expand our business in the international market as well," Roberts said. "We do service people all over the world, and we need to continue that. So, this will allow us to serve those customers better."
Roberts said it is unclear how many jobs will ultimately be eliminated. He said the company will provide interview training and resume writing workshops to help employees find new work if they lose their jobs.
"We appreciate the functionality and the people who have been here during this time," he said. "We're going to do everything we can to make sure they get job placements and/or transition smoothly."
Relocating the company's manufacturing base is expected to take about three months. The company, which is owned by U.K.-based Bowmer and Kirkland, says the move will not disrupt services or the delivery of products.
A marathon strike at Decatur's Huston Patterson plant has dragged on for months, and there does not appear to be an agreement in sight between union officials and the printing company.
Workers began picketing on June 30 outside the company's headquarters to protest contract changes that took affect in August after their old contract expired. The modified contract includes a 15-percent wage cut, mandatory overtime, and reductions in healthcare benefits. Pat Shields is president of the Graphic Communications Conference International Brotherhood of Teamsters Local 219M. He said many of the picketing workers have a 15-to-30 year history with the company and have no intention of standing down.
"Our only demand is to sit down and negotiate," Shields said. "We want to talk, and we have no pre-conditions others than let's sit and talk."
Shields contended that the company refuses to negotiate directly with the union, which is why a federal mediator is in place to open up dialogue between the two sides.
William Kaucher is with the District Council 4, the umbrella organization that oversees Decatur's printers union. Kaucher said he does not understand why the company's president and CEO, Thomas Kowa, will not negotiate with union members in Decatur. Kaucher said he successfully worked with Kowa a few years ago on a contract for employees at the Sigma Graphics printing company in Ottawa, Il., and negotiations over that deal lasted a day.
"He claims financial hardship," Kaucher said. "The guy's can understand that right now, but why would you change work rules that have been in place when it doesn't affect the bottom line? What this comes down to is this is more dictating than negotiating."
Kowa declined a request for comment.
Huston Patterson has replaced workers who are on strike, but Kaucher said any new contract would have to guarantee that those employees regain their jobs.
The number of workers on strike has dropped in recent months, but union officials say they will continue picketing for as long as possible. On Tuesday, the United Council Staff Union of Illinois donated $5,000 to the striking workers. Other strike funds through local unions and contributions from individuals have been used during the last several months to support the Huston Patterson employees.
The Illinois Department of Public Health (IDPH) is investigating nearly four dozen cases in which people became sick with salmonella after eating at Jimmy John's restaurants in nine counties, including Champaign, McLean, and Cook.
The reported incidents took place between November and early December. No new cases of salmonella have been reported in the last couple of weeks, according to the IDPH. However, the agency is continuing to investigate the outbreak.
"Right now the Department of Public Health is investigating the producers and suppliers of alfalfa to determine where the potential beginning of this problem is," said Tom Green, a spokesperson with the health department. "While the investigation is ongoing, there's no reason for people to stop going to Jimmy John's because of something that happened in November and early December."
Green said not all of Jimmy John's restaurants get their sprouts from the same vendor. A company spokesperson said it closely monitors its food suppliers, and will remove the sprouts from its sandwiches if there is a health warning.
People who eat alfalfa sprouts and become ill with diarrhea and a fever should contact a physician, said Green. Illness usually wears off after three to seven days.
The Urbana City Council is ready to approve historic landmark status for the old Urbana-Lincoln hotel.
Council members had held off on the vote for six months, for fear of scaring away developers for the downtown hotel, which has been closed for more than a year. But now, the Lincoln has a new owner and developer in Xiao Jin Yuan, who supports the landmark designation, according to City Planning Director Robert Myers. Myers said Yuan has already "plunged" into renovations for the 86-year-old hotel, from work on pipes wiring and other utility-related items to renovations to the building itself.
"He's (Yuan) lining up contractors for a new roof," Myers said. "He has plans to install a new porte-cochère at the entryway, and also new front doors."
The Urbana City Council endorsed local historic landmark status for the Urbana-Lincoln during a Committee-of-the-Whole meeting Monday night, with a final vote to come later. Myers said Yuan has already appeared before the Urbana Historic Preservation Commission, which must sign off on any major exterior changes to buildings with landmark status. Myers said the Lincoln is expected to be open again to receive guests sometime in 2011.
The Urbana-Lincoln Hotel was designed by local architect Joseph Royer, whose other buildings include the Champaign County Courthouse, the Urbana Free Library and Urbana High School. It is already listed on the National Register of Historic Places, along with the adjacent Lincoln Square Mall. The hotel was operated most recently as the Historic Lincoln Hotel until closing last year.
Residents and businesses in Urbana who found themselves without phone service last week should have it restored by now.
A spokeswoman for AT&T said crews finished repairs on an underground cable over the weekend. Brooke Vane said they were sending tech personnel around to each phone and telecom customer to re-start their service. An employee at the Urbana School District confirmed that their phone service was restored around midday Monday.
Vane stated that they received around 300 complaints about the disruption caused when a construction crew accidentally cut the cable at the U of I campus, but she did not know the full number of customers who were affected. She said anyone still experiencing problems should call the AT&T customer service and repair number --- 1-888-611-4466.
Champaign officials broke ground Wednesday on a new YMCA center in southwest Champaign.
Construction is set to begin on the $16-million facility in the next couple of weeks. The Y will include an eight lane pool, a child play center, and a gymnasium with an in-door track. Mark Johnson, a former University of Illinois wrestling coach who is now the Y's chief executive officer in Champaign County, said the center will be an excellent addition to the community.
"This is going to be a place that the rest of us can use on a daily basis," Johnson said. "We have problems with childhood obesity. We have problems with diabetics. We have problems with senior citizens. We have a problem with disabilities. This is going to be a welcoming place to everybody."
Talk about the project has been going on for about a decade, and up until a couple of years ago it never really took shape because of a lack of funding. However, that changed after Horizon Hobby Chairman Rick Stephens pledged $5 million to the $16-million project. Stephens said his contribution encouraged other people to step up and start donating.
"The reason we did this was for the community," Stephens said. "There was such a need for a new Y in this community. It's been a dream for a lot of people for a long time."
The project has raised about $12 million. Johnson said he is confident that it will be able to raise an additional $4 million by the time the project completed in early 2012. The new facility will replace the current McKinley Family Center and the Fitness & Family Center in Champaign.
The 75,000-square foot center will be located at 2501 Fields South Drive, which is just west of I-57. It will replace two current Champaign fitness center: McKinley Family Center at 500 W. Church St. and Fitness & Family Center at 707 N. Country Fair Drive.
(Design courtesy of the Champaign County YMCA)
Illinois has nine casinos, and another is being built.
If a plan percolating in the General Assembly has success, Illinois' total count would jump to fifteen. There would be a city-owned one in Chicago, and others in suburban Ford Heights, a town near Waukegan, in Rockford, and in east-central Illinois' Danville. Scott Eisenhauer, the mayor of Danville, said the new casino would create about a thousand new, permanent jobs in the area.
"The other thing that is does for a community like ours is it brings tourism dollars to the community," Eisenhauer said. "We have some, but limited tourism attraction opportunities today. This boat would bring additional tourism opportunities, convention opportunities to our community. That again increases the amount of revenue our community could receive."
The measure's sponsor, State Senator Terry Link (D-Waukegan), estimated that adding the new casinos would generate an extra billion dollars for the state's coffers.
Another change would let horse tracks have slot machines. Anti-gambling activists warn of the social dangers associated with the legislation. They say adding casinos in Illinois would cost the state, which will have to pay more to help gambling addicts. Meanwhile, current casino managers say the expansion will lead to over saturation, and may shut their operations down. Link said they are just fearful of competition.
"Go to Las Vegas," Link said. "They just built what two or three new huge endeavors out there, and I didn't see any of the old ones close down. I didn't see 'for sale" signs put up on it. Did they take a little bit of a hurt there, yeah. But like I said, they're still making profit."
Details are still being finalized, but Link said the main tenants of the gambling expansion plan are solid. He added that he expects to call the legislation up for a committee vote Wednesday. However, despite Link's hopes of advancing the measure, Governor Pat Quinn has signaled his opposition.
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