GOP governor hopefuls differ on income tax hike

2014-03-12T21:13:00Z 2014-03-12T23:23:06Z GOP governor hopefuls differ on income tax hikeThe Associated Press The Associated Press
March 12, 2014 9:13 pm  • 

CHICAGO | The four Republicans running for governor don't completely agree on perhaps the biggest financial decision looming over Illinois residents' pocketbooks — whether to extend the state's temporary income tax hike.

While none of the contenders are advocating increasing the income tax, two candidates — state Sen. Kirk Dillard and state Treasurer Dan Rutherford — have left the door open to the possibility when the temporary hike expires next year. The two others — state Sen. Bill Brady and businessman Bruce Rauner — are more firmly saying no. None have extensively detailed how they'd make up for the expected revenue loss if the tax is allowed to expire.

Illinois lawmakers passed a roughly 67 percent increase during the final hours of a 2011 legislative session with the pitch that it was temporary and would be used to fill a budget hole. Four years later, and with the state again facing the potential of dire budget cuts, the issue of whether to extend that increase when it sunsets in January nags both lawmakers who'll begin voting on a budget soon and the candidates who want to run Illinois.

The pocketbook issue could be a deciding factor for some voters.

Top Democrats, including Senate President John Cullerton, have started laying groundwork for an increase by predicting broad cuts and an estimated $1.6 billion revenue dip, which could result in teacher layoffs and other drastic reductions. Meanwhile, Democratic Gov. Pat Quinn, who is seeking re-election, has not said whether he will push for an extension, saying only that it needs to be addressed this year. He is expected to lay out his view in his March 26 budget address.

All four Republican rivals in the March 18 primary told The Associated Press in candidate questionnaires that they oppose the idea of another increase. However, Dillard and Rutherford have been willing to discuss some form of extension as a possibility, given the state's difficult financial condition, with Dillard recently softening his stance.

Before the start of the New Year, Dillard told the AP that he wanted to get rid of it: "I want to roll back this tax increase. I have never voted for an income tax increase; No one has ever taxed and spent their way into prosperity."

But last month in newspaper editorial board meetings and in more recent debates he added that other options were on the table, including a short-term extension.

"You could do something on a temporary basis," Dillard told the (Springfield) State Journal-Register's editorial board Feb. 6. "You can let it go and see how big your budget hole gets, or you can keep it for another six months."

Dillard has advocated overhauling the state's Medicaid system as one alternative to save money. He recently picked up the endorsements of several state employee unions, including the state's largest teacher union.

The Hinsdale Republican was former Gov. Jim Edgar's chief of staff, a fact he often touts.

While circumstances and the rhetoric are different now, Illinoisans saw the same question play out two decades ago when Edgar sought the office. In 1990, Edgar campaigned on a promise to make permanent the state's last "temporary" income tax surcharge while his Democratic challenger, then-Illinois Attorney General Neil Hartigan, ran an anti-tax campaign. Edgar signed legislation extending the increase in 1991.

None of the candidates now seeking the governor's office in Illinois have gone so far.

Still, Rutherford — who called the 2011 income tax increase a mistake — says it is hard to rule out an extension completely because of unforeseen circumstances that could face the next governor.

"I don't know what I don't know until I become Governor in January 2015. Will the state pension law be found to be Constitutional? Will the current Governor and General Assembly have spending and borrowing in check over the next year?" Rutherford, of Chenoa, wrote in his AP questionnaire.

The two other Republicans have been more strongly opposed.

Brady, who lost the 2010 governor's race to Quinn, said t an extension would "hinder job creation." He's called for a study of the tax code.

"I will veto any extension of the 2011 income tax hike and create a stable climate for Illinois businesses and families," The Bloomington Republican wrote in his questionnaire.

Rauner, a Winnetka venture capitalist seeking public office for the first time, has said he'd call together business leaders to review the tax code to make any changes are needed, including taxes on services, are needed.

"We need to reverse the Quinn tax hike and replace it with comprehensive tax reform that lowers the tax burden which will help us create more jobs and better paying jobs for our citizens," Rauner said in the questionnaire when asked about the income tax increase.

Nick Kachiroubas, a visiting assistant professor at DePaul University's School of Public Service, said a flexible stance could give politicians some political cover, but it could also irk primary voters.

"They're hoping to try to placate the base but they don't want it to come back and bite them later on," he said.

Meanwhile, Quinn hasn't committed to it publicly, but he and other Democrats have repeatedly predicted dire budget cuts with the revenue drop.

His Democratic primary challenger, activist Tio Hardiman, of Hillside, said he doesn't want to raise the personal income tax, but could see an increase for some businesses.

"The working class people are already taxed enough," he wrote in his questionnaire.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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