Gov. Bruce Rauner whose massive personal wealth makes him one of the richest men in Illinois will be among a few multi-millionaire individuals to reap a gross windfall this tax season.
Rauner could reap a tax break of more than $750,000 now that Illinois’ temporary 1.25 percent income tax surcharge has expired.
Rauner, who earned $61 million in 2013, is a part of the extremely small percentage that will now profit – in a big way – from the state’s lower tax rates, the Huffington Post reported.
Because Rauner opposed restoring the state's now-expired income tax hike, which generated millions in revenue, he and those in the top one percent of wealth are set to make huge gains.
Meanwhile, the governor's proposed budget asks Illinois tax payers to take on more pain.
The new governor said he plans to slash spending in other areas to make up for the revenue gain, including a $1.5 billion cut to Medicaid and a new pension plan he says could save $2.2 billion.
Other cuts would hit mental health and addiction treatment and after-school programs.
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Some of that was intended to set a tone, as Rauner scolded legislators for years of "bad decisions" and spending money Illinois can't afford.
But Rauner's budget team also noted a tax increase wasn't on the table anyway because the governor is obligated to present a balanced budget based only on revenue currently available.
The governor's budget office indicated that Rauner remains determined to overhaul the tax code and implement a new tax on services — both issues he campaigned on last year. The former private equity investor said during the campaign that he would be open to closing some corporate tax "loopholes," such as a sales tax exemption on racehorses.
Other Democratic legislators have pushed for raising the income tax rate once again. Those rates rolled back on Jan. 1, from five percent to 3.75 percent for individuals, reducing revenue by an estimated $5.7 billion next year.
Democrats say raising the rate, even to a level lower than five percent, could eliminate the need for cuts some legislators described as callous and irresponsible. Among Rauner's recommendations was cutting money for heroin abuse treatment, mental health care and health insurance for low-income people and eliminating educational programs for youths in the Department of Children and Family Services when they turn 18, rather than 21.
Rauner's proposed budget also assumes Illinois will be able to save money on health insurance for state workers. However reducing those benefits or getting employees to pay a larger part of the costs is all subject to contract negotiations, which have barely gotten started.
Democratic leaders say they won't carry the political burden for raising taxes on their own. But getting Republicans to vote "yes" on any tax increase will likely require Rauner's blessing.
While some Republicans and Democrats insisted they'll oppose an increase, others were more open-minded.
"It's a process," said GOP Sen. Mike Connelly of Naperville. "We're going to be here for the next four months, at least, watching this unfold."
