The Illinois House passed a massive income-tax increase to help the state dig out of a $13 billion deficit, despite opposition from Republicans and business groups.

The measure passed by a vote of 60 to 57 and was sent to the Illinois Senate, where it was expected to pass late Tuesday night or Wednesday morning. A new legislature, with narrower Democratic majorities in both houses, will be sworn in at noon.

Among the increases in the bill, the individual income-tax rate would jump to 5%, from 3%. That would cost a family of three making $60,000 about $1,080 more each year in income taxes, according to figures from the Illinois Policy Institute, a nonpartisan free-market think tank. The corporation tax would also rise to 7% from 4.8%.


"So far so good, but we have work to do; we've got to work with our senators," he told a reporter before getting into an elevator after the vote.


"The wolf is at the door ladies and gentlemen," said Democratic Rep. Greg Harris.



Illinois is one of few states considering big income tax increases to address budget woes. In California, Gov. Jerry Brown, a Democrat, proposed Monday to close the state's $25 billion budget shortfall by making steep service cuts and extending temporary increases on sales and income taxes.


That means lawmakers will likely turn to budget cuts amid dwindling federal funds, growing Medicaid costs and state revenues that are increasing at a sluggish pace. "This is going to be the hardest budget to put together of any since the recession began" for state lawmakers nationwide, Mr. Snell said.







The package included a measure to authorize borrowing $3.7 billion to make a pension payment. However, an increase in the cigarette tax and a measure to use roughly $8.5 billion in debt to pay down past-due bills failed.


Republicans and business advocates voiced their opposition.





