For the first time in over two years, Illinois lawmakers passed a budget last week, overriding Gov. Bruce Rauner’s veto of the bill and implementing 32 percent tax hike. Illinois faced a “junk” bond rating and nearly $15 billion in unpaid bills, which pressured state legislators to make a deal outside of Gov. Rauner’s opposition, according to NPR.
The $36 billion budget agreement raises Illinois personal tax rates from 3.75 percent to 4.95 percent and the corporate tax rate from 5.25 percent to 7 percent. Because of the $5 billion tax increase, the compromise lacks bipartisan support and has been met with staunch disapproval from business groups, including NFIB.
In Gov. Rauner’s opinion, the new budget plan “is not balanced, does not cut enough spending or pay down enough debt, and does not help grow jobs or restore confidence in government.”
Small business owners echoed the shortcomings of the new budget as well.
“Senate Bill 9 is bad legislation that’s going to make it even harder for small businesses and other employers not only to succeed but to stay in Illinois,” said NFIB/Illinois State Director Mark Grant in a statement. “This tax increase is going to drive up the cost of living, working, and doing business in Illinois. Worst of all, it doesn’t even get at the underlying issues such as soaring property tax rates, runaway workers’ comp costs, and a busted state pension system.”
On top of the billions of unpaid bills, Illinois also owes a quarter-trillion dollars in state worker pensions for retirement, according to CNN Money. Even with a budget, Illinois is still at risk of being the first state to receive a “junk” credit rating, which could lead to a spike in borrowing costs for the state.
“NFIB is the voice of Illinois’ small businesses, and we’ll continue to advocate for meaningful reforms that balance the budget and help put Illinois back on track,” said NFIB/IL Director Mark Grant.