CHICAGO (Reuters) - Illinois' powerful speaker of the House of Representative on Thursday unveiled a plan that would slap a tax surcharge on millionaires in the state in an effort to raise $1 billion a year for schools.
Chicago Democrat Michael Madigan's plan surfaced just two days after voters in the Republican primary election chose multi-millionaire venture capitalist Bruce Rauner to face incumbent Democratic Governor Pat Quinn in the November general election.
Chip Englander, Rauner's campaign manager, said economic growth was needed to boost education funding.
"We need to take a look at our entire tax system to make Illinois more competitive and lower the tax burden on the people of Illinois," Englander said in a statement.
Under the speaker's plan, annual incomes topping $1 million would be taxed an additional 3 percent over the state's flat income tax rate, with the additional revenue distributed to schools on a per-pupil basis.
"This plan brings long overdue fairness to the state tax structure and provides a needed boost to education funding to help give our children more of the resources they need to succeed," Madigan said in a statement.
The proposed constitutional amendment would need approval from the Democrat-controlled House and Senate by May 5 in order to be placed on the ballot for the November general election, according to the statement.
Illinois' personal income tax rate, which was boosted to 5 percent in 2011, is scheduled to fall to 3.75 percent on January 1 unless lawmakers take action to keep the higher rate in place. Quinn's fiscal 2015 budget presentation planned for next week is expected to address how the cash-strapped state will deal with the tax rate roll-back.
(Reporting by Karen Pierog; Editing by James Dalgleish and Cynthia Osterman)