Tax hike a tall hurdle for Quinn to clear
By Dave McKinney Springfield Bureau Chief March 29, 2014 2:47PM
Dawn Clark Netsch
Updated: May 1, 2014 7:09AM
SPRINGFIELD — Former Gov. Richard Ogilvie and one-time gubernatorial contender Dawn Clark Netsch crashed their political careers because of Illinois’ income tax.
But Gov. Jim Edgar and Gov. Pat Quinn didn’t face the same misfortune — at least yet, in Quinn’s case — despite touching that third rail of Illinois politics.
As Illinois heads into another gubernatorial election, the big unknown is whether the incumbent Democratic governor can pull off a repeat performance from 2010, when he campaigned for a hike in the state income tax and still persuaded voters to send him to 410 E. Jackson, home to Springfield’s executive mansion.
During the past four decades, tax increases have been a volatile issue that has decided gubernatorial campaigns and left political casualties. The heated matchup between Quinn and Republican Bruce Rauner is another test of the potency of that wedge issue.
Last week, Quinn ended months of dancing around the income tax question and said he would push for a permanent extension of the temporary 67 percent hike he enacted in 2011 to help pare a multi-billion-dollar backlog of unpaid bills and pay increasing state pension obligations.
Helping him make his case is none other than Edgar, the former two-term Republican governor whom Quinn consulted before his budget address and on Friday appeared to gain his blessing for the plan.
“From a governmental point of view, it’s probably the right thing to do,” Edgar told Early & Often, the Chicago Sun-Times political blog. “Politically, it’s definitely kind of a roll of the dice.”
In Rauner, Quinn is up against possibly the best-funded gubernatorial challenger in state history. After Quinn’s budget speech, the multimillionaire’s campaign dispatched “Quinnocchio” to harangue the governor for going back on his word that the 2011 tax increase would be temporary. Rauner also released an online ad titled “Truth” the day before Quinn’s speech, accusing the governor of “broken promises” on taxes.
As Quinn made his tax stance public, he laid out an alternative funding scenario that would involve “savage” cuts that would occur if the 5 percent individual income tax rate and the 7 percent corporate rate were allowed to drop in January, leaving a budget hole of close to $2 billion.
Some analysts believe Quinn can persuade voters to support him this fall despite opposing letting individual income tax rates roll back to 3.75 percent and corporate rates drop to 5.25 percent in January.
“I’m not going to ever bet against an incumbent Democratic governor in the state of Illinois,” said David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University and a former political reporter at the Des Moines Register. “I think the governor gets some credit for telling voters the truth.”
Rauner has called for letting the taxes roll back and cutting spending, but has not laid out specifics.
Historically, such gutsiness has not been rewarded by voters.
In 1972, Ogilvie lost his re-election bid to Democrat Dan Walker after championing legislation in 1969 that imposed Illinois’ first income tax, which then was set at 2.5 percent for individuals and 4 percent for corporations.
Ogilvie’s support for that tax was described as “political suicide” by journalist and gubernatorial biographer Robert P. Howard in his book on Illinois governors, “Mostly Good and Competent Men.”
“I wish we had handled it better, and he knew . . . that the public would need a PR campaign to explain how necessary and important and useful the money was. But it never happened,” Ogilvie’s former press secretary, Joseph Mathewson, told Early & Often.
Mathewson, now a professor at Northwestern’s Medill School of Journalism, Media and Integrated Marketing Communications, said, “He just dropped the bomb on the Legislature with no forewarning about fiscal problems, deficit, etc. The voters never recovered.”
Nearly two decades after Ogilvie’s loss because of the income tax, Edgar managed to dodge the same fate when he opened his campaign to succeed retiring Republican Gov. James Thompson in 1990 by advocating that an earlier temporary income tax hike be made permanent.
In 1989, facing a state fiscal crisis, Thompson and the Democratic-led General Assembly bumped up the income tax rate for individuals to 3 percent from 2.5 percent and to 4.8 percent from 4 percent for corporations. By 1993, those rates were scheduled to slide back to 2.75 percent for individuals and 4.4 percent for corporations.
Despite wanting to make the increases permanent — and they eventually were — Edgar fended off a primary challenge from the GOP’s conservative flank and went on to narrowly defeat his Democratic rival, then-Attorney General Neil Hartigan, in 1990.
In 1994, Edgar used the income tax to his political advantage. He hammered his Democratic opponent, then-Comptroller Dawn Clark Netsch, for pushing an educational tax-swap plan that would have raised the state income tax by $2 billion, providing half of that to schools and the other half to property tax relief.
Edgar had the 1994 campaign virtually sewn up by June of that year after hitting Netsch in a barrage of TV advertising from which she never recovered. He went after her support for abolishing the death penalty and for what he characterized as a 42 percent increase in state taxes. Edgar would go on to propose an educational tax-swap plan of his own in 1997 that resembled Netsch’s.
House Speaker Michael Madigan, D-Chicago, and Senate President John Cullerton, D-Chicago, are backing Quinn’s tax plan, and the speaker said he believes the governor can win with that message .
“The governor will be re-elected because, as he said [Wednesday] as part of his address, he’s being perfectly honest with the people of the state of Illinois,” Madigan told reporters Thursday.
Quinn has added a sweetener: annual $500 property tax refunds for homeowners that could hit mailboxes this fall. Initially proposed by Madigan, it would result in homeowners getting some portion of that $500 refund depending on the size of their property tax bills. Anyone now paying more than $10,000 annually in property taxes would be net losers under his plan.
Edgar, a backer of Kirk Dillard in the primary, isn’t so certain the politically weakened Quinn will be able to prevail while carrying a pro-tax message, even if, governmentally, it might be best for the state.
“The problem Quinn has got is his approval ratings are so low to start with. It doesn’t take much,” Edgar said. “Politically, it was a risky thing to do.”