Mar 18, 2009 11:17 am US/Central
Breaking Down The State Budget Plan
How Much More Income Tax Would You Have To Pay?
SPRINGFIELD, Ill. (CBS) ―
The budget blueprint released by Gov. Pat Quinn's office on Tuesday calls for an income tax hike from 3 percent to 4.5 percent.
The net impact of this rate increase, as it is proposed, would affect families of four who earn more than $57,000 a year, while those earning less would see no increase in their income tax burden. Those who earn substantially less would see a tax cut because of the larger personal tax deduction under Quinn's plan.
The budget blueprint, first reported by the Chicago Sun-Times, shows Quinn is considering a $1 increase in the cigarette tax, which is now 98 cents a pack. The increase would be phased in over two years.
He also is targeting the cost of license plates and drivers licenses.
Plates, which will cost $79 starting this summer, would jump to $99 under the plan being considered by Quinn. A drivers license, which now costs $10 and is good for four years, would cost $20.
Those higher fees would generate about $200 million a year, which would be used to finance a statewide construction program to repair roads, bridges and other infrastructure.
The governor will reveal his budget proposal Wednesday in a speech to the General Assembly. He faces the dilemma of trying to fill a deficit that could reach $11.5 billion next year if no action is taken.
Normally, local governments would get a share of any income tax increase. Quinn's plan would keep all the additional money for the state, meaning cities would miss out on $287 million.
Quinn also may take $200 million out of a variety of government funds that are supported by special fees and dedicated to particular programs. Such diversions were common under his predecessor, Rod Blagojevich, who was removed from office in January.
The budget blueprint includes another idea favored by Blagojevich: ending several tax breaks for businesses. The move would save the state about $100 million but lawmakers have rejected the idea in past years.
The blueprint calls for raising the corporate income tax rate to 5.9 percent, up from 4.8 percent. That would yield $175 million for the state.
One key piece of Gov. Pat Quinn's budget proposal is a plan to increase the personal income tax rate by 50 percent while expanding a tax break to minimize the impact on lower-income families. Here's a look at different households and different incomes, showing what they pay now, what they might pay under Quinn's plan and the difference:
SINGLE
--$30,000: $768 now, $972 proposed, up $204
--$45,000: $1,182 now, $1,593 proposed, up $441
--$60,900: $1,621 now, $2,251 proposed, up $630
--$75,000: $2,010 now, $2,835 proposed, up $825
--$100,000: 2,700 now, $3,870 proposed, up $1,170
MARRIED WITH NO CHILDREN or SINGLE WITH ONE CHILD
--$30,000: $708 now, $702 proposed, down $6
--$45,000: $1,122 now, $1,323 proposed, up $201
--$60,900: $1,561 now, $1,981 proposed, up $420
--$75,000: $1,950 now, $2,565 proposed, up $615
--$100,000: $2,640 now, $3,600 proposed, up $960
FAMILY OF FOUR
--$30,000: $588 now, $162 proposed, down $426
--$45,000: $1,002 now, $783 proposed, down $219
--$60,900: $1,441 now, $1,441, proposed, $0 change
--$75,000: $1,830 now, $2,025, proposed, up $195
--$100,000: $2,520 now, $3,060, proposed, up $540
In addition to the tax hikes, Quinn also wants substantial cuts in government services and an overhaul of government pension systems.
The state is suffering from an $11.5 billion budget deficit.
The Associated Press contributed to this report.
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