Rutherford hasn't ruled out keeping tax hike

But only if paired with long-term spending cut

ROCK FALLS – State Treasurer Dan Rutherford, a candidate for the Republican nomination for governor, says he wants to do away with the state's income tax increase, but he was open to keeping it for a while – for limited purposes.

In 2011, lawmakers hiked the income tax rate from to 5 percent (from 3 percent), but part of it is set to expire next year.

"I don't want it to stay," Rutherford said Friday before a campaign event at Candlelight Inn in Rock Falls.

But he said it would be a year before he could become governor. During that time, he said, many things will be up in the air – the fate of pension reform and other spending issues.

"The reality is that $5 billion would come out of the budget [if the tax increase went away]," said Rutherford, who is campaigning for the March 18 GOP primary. "That's one-seventh of the revenue."

He said he wouldn't sign any bill that would mean more revenue unless there was a long-term solution to ax a large amount of spending.

He expects the courts to rule the pension reform enacted late last year is unconstitutional, which is what state public workers unions assert in their legal challenge.

While changing the state constitution is an option, Rutherford said, it's not realistic. Rather, he said he would put everything on the table in cutting pension costs. He said he would strike a deal involving consideration, meaning both state workers and the state would have to give up something. 

Last week, he revealed at a news conference that an employee in the state treasurer's office had made claims against him, later saying that they involved harassment. Rutherford called the claims false.

Asked about the issue Friday, Rutherford declined to give specifics.

"It's a personnel matter," he said. "That puts me in a precarious position."

Why did he go forward publicly?

He said the attorney for the employee was asking for $300,000 to keep the matter under wraps.

No go, Rutherford said. 

"That's an unacceptable type of operation," he said. "I said I would go public; let it be known."

Rutherford is one of four candidates for the GOP nomination for governor. The others are state Sens. Bill Brady and Kirk Dillard and businessman Bruce Rauner. Rutherford, Brady and Dillard each spoke at the 25th annual Reagan Day Dinner on Friday night in Dixon.