News Local/State

House Speaker Suggests Restoring Five-Percent Income Tax

by The Associated Press, with Additional Reporting from Illinois Public Radio
 
Illinois Speaker of the House Michael Madigan of Chicago at the Illinois State Capitol, December 1, 2015, in Springfield.

Illinois Speaker of the House Michael Madigan, D-Chicago, speaks to reporters before walking into the governor's office at the Illinois State Capitol Tuesday, Dec. 1, 2015, in Springfield. Seth Perlman/Associated Press

House Speaker Michael Madigan suggested Wednesday that the state's income tax should be restored to the 5 percent level it was at until January.  The Chicago Democrat told a City Club of Chicago crowd that the state's multibillion-dollar deficit demands a tax hike.

A four-year, temporary increase from three percent to five percent expired last winter with the blessing of incoming Republican Gov. Bruce Rauner.  It dropped to 3.75 percent. 

"A good place to begin would be the level we were at before the income tax expired," Madigan said.  "And starting there you can go in whatever direction you want to go."
 
Democrats are locked in a standoff with Rauner over a state budget which should have taken effect July 1. They want a tax increase and spending cuts to address a multibillion-dollar deficit.

Illinois raised the income tax rate in 2011, but only temporarily. It partially rolled back at the start of 2015, falling from five percent to 3.75 percent for individuals.  That's contributed a deficit in the state budget
 
Rauner wants far-reaching changes to improve the business climate which Madigan calls "extreme.''

Meanwhile, the Republican leader of the Illinois Senate is critical of Madigan's comments.  Senate Minority Leader Christine Radogno of Lemont called the idea "outrageous'' Wednesday.

She says Gov. Bruce Rauner should be able to make basic changes to make Illinois businesses more competitive first.

UPDATE 8 p.m:  Madigan’s office clarified his comments, issuing a statement Wednesday night saying that he has no plans to introduce legislation to raise the income tax rate.  He says headlines to the contrary are misleading.