For most of his career in the Illinois State Senate, Barack Obama was in the minority – Republicans controlled the Senate and the Governor was a Republican. Only the Illinois House was in Democrat hands – creating a balance of power that discouraged tax hikes and kept spending under control for the most part.

But, all that changed in 2003, when Democrats swept the State Senate (thanks in part to partisan remapping) and captured the Governor’s office for the first time in 25 yers.

Over the next two years, Senate Democrats pushed a variety of tax hikes and spending programs. Barack Obama was at the center of the action, serving as a reliable vote for the tax hikes and other spending schemes.

During the two years after Democrats took control of the Illinois Senate (2003-2004), Barack Obama voted for

  • More than $600 million in new taxes;
  • To double the state’s debt;
  • Raid hundreds of state funds; and
  • Sell off state assets for a quick dollar fix.

SB 842/P.A. 93-0024
Sales Tax Increase – $59 Million

Eliminated seven sales tax exemptions including the Coal, Oil & Aggregate Machinery Exemption ($1 Million), the Graphics Arts Exemption ($4 million), The Manufacturers Purchase Credit ($20 million), The Pollution Facilities Exemption ($3 million), The Replacement Vehicles Exemption ($2 million), the Vending Machines Exemption ($3 million), and the Non-Commercial Aircraft Exemption ($26 million).
See the roll call on SB 842.

SB 1725/P.A. 93-0030
Reinstate the Death Tax – $45 Million

Reinstate the death tax in Illinois Decoupled Illinois from the elimination of the federal estate tax. The state tax applies to estates worth over $2 million and was applied retroactively to Jan. 1, 2003.
See the roll call on SB 1725.

SB 1733/P.A. 93-0031
Natural Gas Tax Increase – $42 Million

Requires that natural gas users begin paying state sales tax on natural gas purchased from out-of-state suppliers. Raised cost of energy;
See the roll call on SB 1733.  

SB 1606/P.A. 93-0027
Gaming Tax Increase – $201 Million

Increased the taxes paid by riverboats. Applies a 20% surcharge to all adjusted gross receipts above $250 million, creating an effective tax rate of 70% for the largest boats. Also increased admission taxes from $3 to $4 for the six smallest boats and from $3 to $5 for the three largest riverboats.
See the roll call on SB 1606.

SB 1634/P.A. 93-0029
Business Tax Increases – $57 Million

Eliminated various corporate tax exemptions, requiring employers to pay taxes on such expenses as research and development ($15 million), training expenses ($15 million), and life and health insurance ($13 million).
See the roll call on SB 1634.

SB 774/P.A. 93-0022
Liquor Tax Increase – $7 Million

Nearly tripled the license fee on liquor retailers from $175 to $500, raising $7 million/year and diverting half of the total fee to the General Revenue Fund.
See the roll call on SB 774.

HB 848 & HB 864
Multiple Tax Increases

House Bills 848 and 864 were two nearly identical measures that were amended in the Senate to include multiple tax hikes. Both passed the Senate in 2004, but were never voted on in the House. Instead, the legislature went into overtime session, forcing Democrats to compromise with Republicans to produce a budget that did not include the major tax hikes. Obama supported all of the tax hikes in both HB 848 and HB 864.
These included:

  • Renewable energy tax ($15 million – HB 848/HB 864);
  • Business income apportionment tax ($24 million – HB 848/864);
  • Tax hike on farm and other equipment purchases ($74 million – HB 848);
  • Tax on federal tax-exempt bonds $19 million HB 848/864);
  • Tax on bankruptcy cases ($4 million – HB 848/864);
  • Tax on off-shore investments ($16 million – HB 848/864);
  • Tax on business income ($30 million – HB 848/864);
  • Tax on life insurance ($9 million – HB 848).

See the roll calls on HB 848 and HB 864.

Obama’s Two Year Grand Total: $602 Million in higher taxes

Fund Raids
SB 874 & SB 2206

In addition to the tax increases, Obama voted two years in a row (2003-3004) to raid funds pledged to hundreds of state programs, including road repairs and construction, public safety, environmental protection, open space acquisition, gang crime prevention, veterans health care and hundreds of other programs, and allow the money to be used for pork barrel projects, welfare program expansions, overall state bureaucracy and pay-to-pay contracts.

Other Provisions of SB 874

In addition to raiding funds, Senate Bill 874 (2003) contained a number of other controversial provisions including:

Tourism Promotion Fund

Earmarked $5 million in local hotel-motel taxes for McCormick Place in Chicago while taking another 10% of the fund to pay for general state overhead.

Diverting Dedicated Funds

Took any new revenue raised by fees increased during the 93rd General Assembly and allocated them (for the first time) to general state overhead.  Provided the Governor’s budget office with the explicit authority to determine how much of the new fee revenue would be transferred to the GRF.  This language allows the State to charge excessive fees to industries above what is reasonably needed by State government to service and regulate the activities of those individual industries.  For instance, the Governor proposed raising approximately $60 million from increased fees at the Environmental Protection Agency – an amount significantly higher than what is needed to operate that agency.  The remainder was not going to be used to expand the duties of the EPA, but instead transferred to the GRF to pay for the regular operations of State government.  .

“Efficiency Initiatives

One of the more controversial uses of state funds was the Efficiency Initiatives Revolving Fund. This program allowed the Governor to take alleged “savings” identified by increased “efficiencies” in government and use those savings to pay consulting contracts. Subsequent audits found that the “savings” were non-existent and that the Governor’s budget office just instructed agencies to arbitrarily plug in numbers with no documentation or justification.

Fee Increases

Although Obama was allowed to vote against $300 million in state fee hikes in Senate Bill 1903, he voted to spend the money in SB 874, effectively ratifying the fee hikes and agreeing to divert the money to purposes for which they were not intended. A classic case of “I voted against the money, before I voted to spend the money.”

See the roll call votes on SB 874 and SB 2206

Double the State Debt
HB 2660

In 2003, Obama voted for a massive borrowing bill that doubled the state debt ($10 billion). In addition to significantly increasing state debt, the bonds were structured as “back-loaded” debt – pushing the bulk of the repayment off to future generations, capitalizing the interest payments and burdening future governors, legislatures and taxpayers with massive payments.  A classic case of spending the money today and forcing future generations to pay for it.

See the roll call vote on HB 2660.

Selling off State Assets
SB 719

In 2003, Obama voted to give the Governor authority to sell state property in order to get an influx of cash up-front to finance even more new spending. One of the most controversial provisions was a plan to sell off the State of Illinois Building (James R. Thompson Center) in Chicago – a move that was later found to be illegal by the state’s Attorney General – a fellow Democrat.

See the roll call vote on SB 719.

Note and Disclaimer: I am not in the employ of any campaign. I do this on my own time because I believe it is important for the voters to know the truth about a candidate’s record. If you notice errors of fact, please respond in the comments section. I will check out your points and if you are correct, I will make changes to the document.

In addition, please be aware that because of time limitations, this is a work in progress. More information will be added as I have the time to do research.


3 Responses to “Obama’s Taxing Record in Illinois”


  1. March 4, 2008 at 2:51 am

    Thanks for leaving me your link. I also posted it to comments so others will come here. Please keep in touch


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