Cairo Association of Teachers - Newsletter

CAT Tracks for May 11, 2007 OUCH!

Zero support for IL Governor Rod Blagojevich's business tax plan!

From the Southern Illinoisan...

Lawmakers to look forward after tax rejected

By Mike Riopell and Kurt Erickson, The Southern Springfield Bureau

SPRINGFIELD - Gov. Rod Blagojevich has spent months touting his tax plan that would provide billions of dollars for schools and healthcare, even traveling around the state on a bus to drum up support.

But Thursday, when 114 House lawmakers were asked if they supported the governor's business tax, no one voted "yes."

So now, leaders may have to change their plans.

The lead Senate budget negotiator acknowledged that lawmakers are likely looking at other ways to raise revenue, ranging from an expansion of gambling to smaller tax increases.

"There's a lot of things that we can do," said state Sen. Donne Trotter, D-Chicago. "It might not be the giant step that we wanted to take, but certainly it's going to be a measurable step that we're going to take on behalf of the citizens of Illinois.

House Speaker Michael Madigan, D-Chicago, said Democrats will meet behind closed doors when they get back to work Tuesday to talk about taxes. And Senate President Emil Jones, D-Chicago, encouraged senators to decide what they supported before returning next week.

Madigan suggested Thursday that the state still needs more money. He voted against Blagojevich's plan, but said he'll work with the governor to help "those within our society that need the help of government, sometimes just to live day-to-day."

But after the 0-107 vote, Blagojevich spokeswoman Rebecca Rausch said that Blagojevich would keep pushing for his tax plan.

"We hope that we can come to some sort of common ground," she said.

Jones, a legislative ally of Blagojevich, said: "Nothing ever dies in the General Assembly."

But asked what might be an alternative to Blagojevich's plan, Jones said, "I don't know."

State Rep. Patrick Verschoore, D-Milan, said he was encouraged to hear the governor would listen to other ideas even though he's pushing his own plan hard.

"I was encouraged to here him say he'd take suggestions and ideas," he said.

The "gross receipts" tax plan rejected Thursday would apply to business transactions. In short, every time a company takes in money, it would pay a small share to the state.

Companies with under $2 million in annual revenues would be exempt. The first $5 million in revenues for larger companies would not be taxed. The governor said the result is that 90 percent of Illinois businesses would not be affected if the tax was imposed.

Blagojevich has also proposed a payroll tax on companies with 10 or more employees that don't provide health insurance. Others also have talked about an income tax increase.

But with Blagojevich vehemently vowing to veto an income tax hike, negotiations could be tough.

Following a full day of hearings on the governor's tax that included criticism from many lawmakers, Blagojevich encouraged supporters to vote "no" on Thursday's non-binding resolution because no one had enough time to think about it.

State Rep. Frank Mautino, D-Spring Valley, said the fact that no one voted "yes" should suggest that lawmakers aren't ready to increase state spending by 30 percent.

"I think that reality should be embodied in this vote," he said.

State Rep. David Reis, R-Willow Hill, said he doesn't support any increase in taxes or gambling.

He did, however, predict the Democrat-controlled House and Senate would enact some kind of small tax increase, as well as increase gambling, in order to bring in new revenue.

Those increases, combined with an estimated $1 billion increase in natural revenue growth, would allow lawmakers to avoid a long, protracted budget debate, Reis said.

"I'm calling it a 'maintenance-plus' budget," Reis said.

State Rep. Dan Brady, R-Bloomington, said many Republicans want to have a "no-growth budget."

Brady said he cannot support any of the governor's revenue-raising proposals, including the payroll tax.

"The zero-growth budget may be the way to go," Brady said.