Cairo Association of Teachers - Newsletter

CAT Tracks for February 9, 2007 IL TAX HIKE?

From the Southern Illinoisan...

Plan to boost taxes put on table

BY Kurt Erickson, THE SOUTHERN SPRINGFIELD BUREAU

SPRINGFIELD - Taxpayers, watch your wallets. A coalition of lawmakers, labor unions and advocacy groups was back at it Thursday, resurrecting a plan to raise your income taxes and begin taxing services such as haircuts and lawn care in the name of improving Illinois schools.

They say the $9.5 billion plan, which also would raise money for the state's under-funded pension system and higher education, would finally erase the imbalance in school funding that has left some students receiving less of an education than others.

The plan, which could be debated in the General Assembly this spring, faces major obstacles. Gov. Rod Blagojevich is opposed to raising taxes. Senate President Emil Jones, D-Chicago, is opposed to raising service taxes.

Republican leaders also say they won't vote for a tax hike.

But state Sen. James Meeks, D-Calumet City, who is sponsoring the proposal, expressed confidence that the plan could make it through the legislature this spring.

"I think the political will is there," said Meeks, whose proposal is similar to a tax swap floated in the early 1990s by former Comptroller Dawn Clark Netsch.

State Rep. David Miller, D-Dolton, who is backing a similar plan in the Illinois House, expressed similar hope.

"We've had enough time to talk about it. The time is now," said Miller.

Under the proposal, personal income tax rates in Illinois would rise from 3 percent to 5 percent. Corporate taxes also would jump and the state would begin taxing services for the first time, leaving consumers with higher prices for everything from health club memberships to manicures.

Ralph Martire, a key architect of the proposal, said the net effect to taxpayers would be less than a 1.5 percent increase in overall taxation because some of the proceeds would be used to reduce property taxes.

In addition, Martire, executive director of the Center for Tax and Budget Accountability, said the proposal would offer tax credits to lower income wage earners to offset the increase in service taxes.

The plan would result in a net boost to state coffers of more than $5 billion.

"If Illinois is to successfully compete in the modern economy, the state must reform the way it generates revenue so that it responds adequately to economic growth."

Other groups on board with the proposal are the Illinois Federation of Teachers, Voices for Illinois Children, the Urban League and the American Federation of State, County and Municipal Employees.

Some lawmakers say the proposal is a long shot.

"With the governor being against raising income and sales taxes, I think it's a moot point," said state Rep. Mike Boland, D-East Moline.

There are a number of other proposals floating through the halls of the Capitol as lawmakers begin their annual legislative session.

Blagojevich wants to sell the state lottery, saying it could bring in $10 billion in new revenue.

State Rep. Lou Lang, D-Skokie, has introduced a plan to expanding gambling in Illinois.

State Rep. John Bradley, D-Marion, chairs the House Revenue Committee, which could hear much of the testimony regarding the tax hikes.

He said Meeks' proposal is just one of many propositions that will likely arise between now and the scheduled end of the session in May.

"It's going to take a lot of really crucial sorting out and truth seeking," Bradley said.