NEWS
07/02/2017 14:47 EDT | Updated 07/02/2017 15:00 EDT

The Latest: Illinois House begins tax hike debate

SPRINGFIELD, Ill. — The Latest on the Illinois budget stalemate (all times local):

5:30 p.m.

The Illinois House has begun debating a $5 billion income tax increase to help end a two-year budget stalemate.

Democratic Rep. Greg Harris of Chicago is the sponsor of the measure presented Sunday. The plan would increase the personal income tax rate by 32 per cent. It would go from 3.75 per cent to 4.95 per cent. The corporate rate would increase from 5.25 per cent to 7 per cent.

An expansion of the sales tax on services suggested by a Senate measure has been scuttled.

Sunday marks the second day of the new fiscal year. It's the third in a row the state has begun without a state budget.

The annual deficit has grown to $6 billion with a $15 billion pile of overdue bills. Credit rating agencies have threatened to downgrade the state's creditworthiness to "junk" status.

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12:15 a.m.

The Illinois House plans a vote Sunday on what would likely be an increase in the personal income tax rate of 32 per cent as the search continues for a budget settlement.

The state entered its third straight fiscal year Saturday without a budget plan. It's the longest of any state since the Great Depression and comes with a $6.2 billion deficit and $14.7 billion in past-due bills.

Chicago Democratic House Speaker Michael Madigan announced Saturday there would be a vote on a revenue package "modeled on the bill supported by the governor."

He didn't specify the legislation. But it likely a measure that was earlier negotiated in the Senate that includes an increase in the personal income tax rate from 3.75 per cent to 4.95 per cent. It would raise about $5 billion.

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The current revenue bill is SB9.