Budget Bonanza

So, it's official. Gov. Pat Quinn is going after an income tax hike to help the state wipe out an $11.6 billion deficit. He's also seeking some pretty major pension reforms and other concessions from state employees. Although lawmakers were pretty much universal in praising Quinn for being straight-forward in his budget address, the reviews were pretty predictable from both sides of the aisle. Republicans were blasting the income tax proposal even before the governor formally announced his plan. He even got some backlash from his own party about a proposal that would keep local governments from getting their share of the income tax hike. Simply put, getting his ideas passed won't be easy.

But the governor's tax and pension proposals quickly drew the ire of the labor unions that represent state workers, as well as the business community -- two groups normally on opposite sides of any given issue. But Quinn makes a good point that, given the dire budget situation, everyone needs to make some sort of sacrifice, regardless of who got the state into this mess. The state's pension systems have been criticized for years by government watchdog groups. Going for a major pension reform on top of a proposed income tax hike is a bold step for a governor who will likely be seeking re-election next year.

But even though the income tax plan and the pension reform proposal will generate the most ink, there are plenty of nickel-and-dime tax and fee increases that are just as likely to upset Illinois residents. For example, the governor wants to begin taxing bottled coffee and tea drinks at the same sales tax rate as soft drinks. He also wants to get rid of the sales tax discount that shoppers get on shampoo, toothpaste, shaving cream and other hygiene products that are considered "medicated." An obscure part of the state's tax code means, for sales tax purposes, those items count as medicine. The tax code changes would mean if you buy a $5 bottle of shampoo or $5 worth of bottled cappuccino at the grocery store, you'll have to shell out an extra quarter in taxes. It doesn't seem like much money, but it obviously adds up if you buy that stuff all the time.

The governor is also planning to start charging people more money to attend the Illinois State Fair in Springfield. Adults would pay $5 a piece instead of $3 and kids 12 and under would no longer get in free; they'd have to pay $2. The state fair would still be one of the cheapest in the nation, but as one lawmaker pointed out, the governor needs to be cautious that he doesn't drive too many people away from the fair altogether.

The next couple months should be interesting once lawmakers get their teeth into the budget. It's pretty clear at this point that there will be some significant changes to Quinn's proposals. Exactly what lawmakers will ultimately agree on isn't clear, but State Sen. Dave Luechtefeld (R-Okawville) hit the nail right on the head: this is just the governor's proposal; House Speaker Mike Madigan and Senate President John Cullerton are likely to have their own ideas of what to do. Democrats certainly aren't going to let themselves be the only ones to wear the collar for an income tax hike, which means to get any kind of tax hike, they'll have to make some concessions to make GOP leaders happy. It's not clear what those concessions will be, but as Rep. Frank Mautino (D-Spring Valley) said, expect some big changes.

For now, though, those discussions will be made behind closed doors while lawmakers get back to nuts-and-bolts legislating. It will be interesting to find out if they follow through on pledges to push through real ethics and campaign finance reforms in the wake of booting out Rod Blagojevich.