The Latest: Illinois governor promises tax-hike veto

The Latest on the Illinois budget stalemate (all times local):

8:15 p.m.

Illinois Gov. Bruce Rauner says he will veto an income-tax increase that the House has approved.

The House voted 72-45 Sunday to increase the personal income tax rate by 32 percent. It's designed to start repairing the fiscal calamity caused by the nation's longest budget stalemate since the Great Depression.

Rauner issued a statement that decried "the largest tax hike in history and continue out of balance budgets with no real reform." The first-term governor insists on business-friendly changes and a statewide property tax freeze in return for agreement on a budget.

The tax increase goes back to the Senate for concurrence.

The House followed the tax bill with approval of an annual spending plan.

The vote was 81-34 for a budget that spends about $36 billion. Democrats point out that it's about $800 million less than what Rauner proposed last winter.

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7:45 p.m.

The Illinois House has approved an income tax increase as part of a plan to end the nation's longest budget standoff.

The House voted 72-45 Sunday on a 32 percent increase in the personal income tax rate. It would go from 3.75 percent to just under 5 percent. It passed with one more vote than necessary to take effect immediately.

Democratic Rep. Greg Harris of Chicago sponsored the measure. He says the increase is necessary to avoid financial catastrophe. Bond-rating houses have threatened to downgrade Illinois' creditworthiness to "junk" status without action.

More than a dozen Republicans voted for the measure. But some argued that lawmakers need more financial restraint.

The House is now debating a spending plan of about $36 billion.

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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 percent. It would go from 3.75 percent to 4.95 percent. The corporate rate would increase from 5.25 percent to 7 percent.

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 percent 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 percent to 4.95 percent. It would raise about $5 billion.

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The current revenue bill is SB9.