This is what you voted for IL-Democratic leaders push for income-tax compromise

By Ray Long and Monique Garcia, Tribune reporters


SPRINGFIELD — — House Speaker Michael Madigan took the rare step Wednesday of walking the floor of the Senate to garner support for a major income-tax increase, a move some Democratic lawmakers hope will lead to a compromise as a lame-duck session draws to a close.

The lobbying effort unfolded as the Senate overwhelmingly approved reforms in the state's expensive Medicaid program that are aimed at consolidating health care, cutting fraud and waste, and saving money.

Madigan, who is also Illinois Democratic Party chairman, joined Senate President John Cullerton in fanning out on the Democratic side of the full Senate shortly after the two Chicago powerhouses emerged from a closed-door summit with Gov. Pat Quinn, a longtime booster of an income tax hike.

The plan would raise the personal income tax rate to 5 percent from 3 percent, potentially for two to five years, largely to stabilize the state's woeful budget. Lawmakers also would raise the personal income tax an additional one-quarter to one-half percentage point beyond that to borrow money to start paying down a multibillion-dollar backlog of bills.

But several Democratic senators are unhappy because they're being asked to vote for a tax hike that would not provide more money for schools or property tax relief. A similar 67 percent hike in the income tax rate the Senate approved in May 2009 would have done just that and more. But that plan stalled in the House.

"What we're indeed asking people to do now is to pay more money but not receive any of the benefits other than us paying down our debts," said Sen. James Meeks, D-Chicago, who championed the earlier proposal. "If we act now but we don't include any property tax relief, or any money for education, it is the fear of some of ours that we'll never get around to it.

"If that's the proposal on the table, from my perspective, it's unacceptable," said Meeks before Madigan stopped by his desk.

Madigan made the point to senators that Illinois needs to get its finances in order, pay the backlog of bills, and improve a credit rating that is so low it is costing the state more to borrow money, according to several lawmakers.

"This is Madigan's, certainly his way of telling you that, 'something has to be done, and I'm going to be the one to do it,'" said Sen. Lou Viverito, D- Burbank, a longtime Madigan ally who spoke to the speaker for several minutes.

Viverito said he is hopeful Madigan can craft a compromise plan that would be accepted in the Senate, possibly with some of the components of the version that previously passed the chamber.

Cullerton said the parties in negotiations are "very close" but still needed to reach an overall framework.

After exiting the Senate, Madigan declined to give specifics or to predict if the House would vote this week. He placed the blame on Republican lawmakers who have shown little interest in jumping aboard a tax increase proposal.

"They are continuing on a campaign plan which means they are not participating in governmental decisions," Madigan said.

No votes were taken on a tax hike Wednesday, but the Senate did agree 58-0 on Medicaid reforms long sought by Republicans.

Under the legislation, Medicaid applicants would be required to prove Illinois residency and show one month's income before they could sign up. Recipients would no longer be automatically re-enrolled and those abusing the system could face a $2,000 fine.

Income limits would also be put in place for the All Kids health insurance program — $66,150 for a family of four. Officials said the limit would result in about 3,100 children losing coverage.

Senate Republican leader Christine Radogno said she is happy with movement on Medicaid reforms, but is waiting on changes to workers' compensation laws and the education system before she would consider a tax increase.

"We did try to help them from getting into this mess in the first place," said Radogno, of Lemont. "Democrats have been in place for eight years; they have created this hole, and if they feel the way out of it is a tax increase, they have the votes to pass it."

rlong@tribune.com

mcgarcia@tribune.com