Quinn running mate says Rauner budget would cut billions from education

Posted Online: July 31, 2014, 6:19 pm
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By Eric Timmons, etimmons@qconline.com
MOLINE — Gov. Pat Quinn's running mate tore into Republican governor candidate Bruce Rauner's budget plan Thursday, saying it would result in billions cut from education funding and lead to increases in local taxes.

Paul Vallas, Democratic candidate for lieutenant governor, said the Rauner plan to reduce state income and corporate taxes would leave a nearly $8 billion shortfall in the state's budget.

Mr. Rauner wants to phase out the state income and corporate tax rate increase adopted in 2010 over four years and introduce a tax on services to replace some of the lost revenue.

In 2010, the state income tax rate was increased from 3 to 5 percent and the corporate tax rate from 4.8 to 7 percent, although by law the rates are supposed to fall to 3.75 and 5.25 percent respectively by Jan. 1, 2015.

If elected, Mr. Rauner wants the income tax rate to fall back to 3 percent by the end of his term and the corporate tax rate back at 4.8 percent by then.

Gov. Quinn supports keeping the tax rate at 5 percent permanently and wants to leave the corporate tax rate at 7 percent.

Allowing the tax rates to drop on Jan. 1 to their pre-2011 levels means the state would lose $8.5 billion in revenue, according to the Quinn campaign.

Rauner spokesman Mike Schrimpf said Mr. Rauner would "negotiate with the legislature to get the tax rate to 3 percent by the end of his first term," which means the income tax rate may not fall to the old rates next year if the Republican is elected.

Mr. Rauner has proposed introducing taxes on 32 services, including attorneys, garbage disposal, advertising sales, golf club memberships and warehousing.

The service tax would bring in an estimated $600 million, which the Quinn campaign says would leave the state with a $7.8 billion budget hole next year if the income and corporate tax rates fall to pre-2011 levels.

However, if the income and corporate tax rates drop as scheduled to 3.75 percent and 5.25 percent respectively, the blow to the state's budget would not be as severe as the $7.8 billion being talked about by the Quinn campaign.

Speaking to reporters at Black Hawk College Thursday, Mr. Vallas said that half of the billions in lost revenue would have to come out of education spending, which would be "devastating" for school districts, especially in poorer areas of the state, and would hit colleges such as Black Hawk.

School districts would be forced to raise local taxes in an attempt to compensate for the lost state funding and colleges would have to raise tuition fees, Mr. Vallas said.

The Rauner campaign responded to Mr. Vallas by saying the only real solution to the state's problems was to improve the economy.

"The truth is, Quinn raised taxes by 67 percent, gutted education spending by $500 million, and today Illinois' economy is among the worst in the nation," Mr. Schrimpf said.

"The answer to our long-term fiscal problems is to expand Illinois' economy. That's the focus of Bruce's plan, and that's what it will do."


Local events heading

  Today is Saturday, Sept. 20, the 263rd day of 2014. There are 102 days left in the year.

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1889 -- 125 years ago: Superintendent Schnitger formally inaugurated the Rock Island and Davenport Railway Line of the Holmes system by putting on four cars to start.
1914 -- 100 years ago: Wires of the defunct Union Electric Co. are being removed by city electricians.
1939 -- 75 years ago: The Bishop Hill softball team won the championship in WHB"S Mississippi Valley tournament at Douglas Park.
1964 -- 50 years ago: A boom in apartment construction has hit Rock Island, with approximately 300 units either in or near the construction stage or due for an early rezoning decision.
1989 -- 25 years ago: Members of the Bi-State Metropolitan Planning Commission are hoping to revive their push for a new $70 million four-lane bridge spanning the Mississippi River.

(More History)