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 Monday, Oct. 20, the 293rd day of 2014. There are 72 days left in the year.

1864 -- 150 years ago: The store of Devoe and Crampton was entered and robbed of about $500 worth of gold pens and pocket cutlery last night.
1889 -- 125 years ago: Michael Malloy was named president of the Tri-City Stone Cutters Union.
1914 -- 100 years ago: Dewitte C. Poole, former Moline newspaperman serving as vice consul general for the United States government in Paris, declared in a letter to friends that the once gay Paris is a city of sadness and desolation.
1939 -- 75 years ago: Plans for the construction of an $80,000 wholesale bakery at 2011 4th Ave. were announced by Harry and Nick Coin, of Rock Island. It is to be known as the Banquet Bakery.
1964 -- 50 years ago: An application has been filed for a state permit to organize a savings and loan association in Moline, it was announced. The applicants are Ben Butterworth, A.B. Lundahl, C. Richard Evans, John Harris, George Crampton and William Getz, all of Moline, Charles Roberts, Rock Island, and Charles Johnson, of Hampton.
1989 -- 25 years ago: Indian summer is quickly disappearing as temperatures slide into the 40s and 50s this week. Last week, highs were in the 80s.

(More History)