Politics & Government

Political Rewind: Experts: Temporary Tax Increase May Not Be So Temporary

It's always good to be caught up on state politics. Here's an easy guide to what happened this week.

Editor's Note: This article was created by aggregating news articles from Illinois Statehouse News that were written by various Illinois Statehouse News reporters.

IL temporary tax increases may not be so temporary

Some form of the temporary income tax increase is expected to become permanent, according to several Illinois government experts.

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The General Assembly approved raising the individual income tax rate by 67 percent and corporate income tax rate by 46 percent during a lame-duck session one year ago. 

Proponents said the increases were needed to close a budget deficit that at one time approached $15 billion. Opponents said a tax increase would be a damper on the businesses who employed taxpayers, hurting Illinois' economy. 

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“We have an emergency, a fiscal emergency. Our state was careening toward bankruptcy and fiscal insolvency. Even in the last couple of months, the situation got seriously more dire,” Gov. Pat Quinn said the day after the tax increase passed in January 2011. 

The increases are estimated to bring in about $7 billion in revenue for 2011, but even that shot of cash is not expected to cover expenditures. 

Quinn’s budget office projects that the state will run a deficit of $507 million this fiscal year and an even larger deficit of $818 million in fiscal 2015, when the majority of income tax increases are set to expire, and he has not identified how to balance that budget.

Funding squabble could kill coal-to-gas plant in IL

It could be lights out for a proposed $3 billion coal-to-gas plant on the south side of Chicago.

The Illinois Commerce Commission, which regulates utility companies in the state, voted 3-2 Tuesday in favor of only asking utility companies Ameren Corp. and Nicor Inc. to buy 84 percent of the plant’s output and pay for 84 percent of the plant’s maintenance.

This bucks Chicago Clean Energy LLC, the company backing the plant, which wanted the utility companies to cover the cost to maintain the plant as well as buy all of its output.

Chicago Clean Energy LLC, a subsidiary of the holding company Leucadia National Corp., has said that if the utility companies do not pay for the plant’s maintenance and buy the output, it would back away from the project, because it would be financially unfeasible.

Eileen Boyce, a spokeswoman for Chicago Clean Energy LLC, said the company is expected to bring up the matter before the ICC again in the near future.

“We are evaluating the next step,” Boyce said.

Failed security program prompts criminal accusations in Illinois

Missing and unused equipment as well as a lack of training is what more than $45 million of taxpayers’ money got Cook County residents.

A report released Tuesday by the state Office of the Inspector General outlined the failings of ProjectShield, a state program initiated in 2003 to create a network of video cameras and other integrated devices to connect 128 municipalities in Cook County, allowing first-responders to better react to major emergencies.

“When you waste Homeland Security money, you are less safe … This put our citizens at risk,” U.S. Rep.Mike Quigley, D-5th District, said.Quigley and U.S.

Sen. Mark Kirk, R-Ill., asked the Federal Bureau of Investigation on Tuesday to launch a criminal probe into how contractors made decisions and how Cook County spent grant money for Project Shield.

“We may have more than just a problem of lackadaisical management. This program may have been looted by Cook County officials and the primary and secondary contractors involved,” Kirk said.

Kirk pointed to 168 changes made to contracts during the project’s first four years.

The changes all increased the cost of the project — one change alone increased the cost by $413,555 — but there was no documentation of what specifically the extra cost went toward, according to the report.

lllinois puts self at front of payment line

Illinois owes a lot of money to a lot of people, including itself, and thanks to legislation passed in 2010, the state is in the front of the line to get repaid.

Under the emergency budget act, the state was able to borrow $500 million from hundreds of funds, including the Illinois Animal Abuse Fund and Illinois Affordable Housing Trust Fund, to balance its budget.

While the funds were being depleted, the state was putting off paying the money it owed to businesses, health-care providers and schools.

The inter-fund borrowing stopped June 30, 2011, and according to the same legislation that authorized the borrowing, that money must be paid back within 18 months, or by Jan. 1, 2013.

But there’s no similar deadline for tackling the ever-present $4.4 billion backlog of bills the state owes to the vendors and companies with whom it does business. Both sets of bills will be paid off with money from the general fund, the state’s main checking account that’s refilled by revenue from taxes, fees and other sources.

“Do the vendors get squeezed by this? Sure,” said Kent Redfield, a political science professor at theUniversity of Illinois at Springfield.


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