Illinois lawmakers approved a 66% increase in the state's income tax in the final hours of the Legislature's session.

Lawmakers raised the state income tax to 5% from 3% in a bid to close the state's deficit, which could be as large as $15 billion, The New York Times said.

It's the first such tax increase in the state for two decades.

The debate on the bill carried late into the night, with the final vote tallied after 1 a.m. local time. Even among its supporters, the increase was unpopular.

State Representative Elaine Nekritz, a Democrat who voted in favor of the increase, said her decision was a choice "between and bad and worse."

Illinois's finances have grown increasingly precarious as the deficit grows and the state collected unpaid bills worth $8 to groups including doctors and social services agencies. There have even been signs that bond investors are growing concerned about the state finances.

Lawmakers raised the corporate tax rate to 7% from its current rate of 4.8%. The state's spending growth will be limited from one year to the next over the next four years.

Republican lawmakers opposed the increases, saying the state should do more to slash spending.

Roger L. Eddy, a Republican representative, said lawmakers were "making up for our mistakes" on the back of taxpayers.

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croone22

It is pathetic that the only solution to mismanagement and corruption is higher taxes.

January 12 2011 at 7:12 PM Report abuse +1 rate up rate down Reply
dealer502

stay up there in cold ol yankee land and out of sunny, Texas. home of no state tax.

January 12 2011 at 6:02 PM Report abuse rate up rate down Reply
greyeaglemare

These spenders never learn their lesson....companies leave and rich people just domicile elsewhere while still maintain their residence in Illinois....done all the time. Oregon lost on their tax increase and Maryland really lost.....200mil right out the gate.....

January 12 2011 at 5:32 PM Report abuse +1 rate up rate down Reply
Rick Jenkins

Why do they always raise taxes and never cut spending???

January 12 2011 at 4:24 PM Report abuse +4 rate up rate down Reply
1 reply to Rick Jenkins's comment
gizmo4257

they do because nobody ever stops them......things have to get back to the constitution and all this big government needs to cease!

January 12 2011 at 6:54 PM Report abuse +1 rate up rate down Reply
drzoozic

I guess Ill be leaving Illinois
Perhaps many corps will be doing the same

January 12 2011 at 3:05 PM Report abuse +6 rate up rate down Reply
rjaskie

At my income level, I would pay 7.75% tax in WI. On retirement income in IL, I will pay ZERO tax on retirement income.

January 12 2011 at 2:14 PM Report abuse -1 rate up rate down Reply
1 reply to rjaskie's comment
chicago6772

Good for you...what about those of us who are not retired and those who are still raising families.

January 12 2011 at 2:27 PM Report abuse +4 rate up rate down Reply
rjaskie

3% tax in low state tax. 5% tax is still a low state tax.

January 12 2011 at 2:13 PM Report abuse -4 rate up rate down Reply
2 replies to rjaskie's comment
chicago6772

No state tax is low when the state funds are being abused and spent STUPIDLY!

January 12 2011 at 2:28 PM Report abuse +10 rate up rate down Reply
warrenbent

Taxation needs to be considered in a bigger picture perspective. Personal income taxes have traditinally been relatively low in Illinois, but sales taxes, corporate income taxes, and property taxes have all been relatively high. When considered as a whole, Illinois state taxation has been above average. And now it's going higher.........while spending GROWTH continues.

January 12 2011 at 2:43 PM Report abuse +6 rate up rate down Reply
rjaskie

I know a retiree who move to WI from IL, and then had to move back because he couldn't afford to live in WI. WI taxes retirement income except for SS. IL does NOT tax retirees. In IL there is NO tax on SS, pensions, 401Ks, 403Bs, IRAs and Roths.

January 12 2011 at 2:12 PM Report abuse rate up rate down Reply
warrenbent

"The state's spending GROWTH will be limited from one year to the next over the next four years." Huh? Spending GROWTH? Please tell me this is some kind of a bad horror flick?

January 12 2011 at 2:05 PM Report abuse +4 rate up rate down Reply
kkoesler

LOL move here to California if you think this is bad.

January 12 2011 at 1:42 PM Report abuse +3 rate up rate down Reply