Governor's budget falls short on WIU, makes business interests howl

Gov. Rod Blagojevich's proposed budget seemed to contain something for everyone to complain about. From short changing the WIU riverfront campus development to proposing a revenue based business tax, it was hard to find anyone saying something good about it, except perhaps on a Swedish website that appears to have simply copied and pasted Blago's press release.

The budget proposes the largest tax increase in the state's history along with a proposal to provide health care for those in need, increased education funding and funding for school construction.

It proposes spending $14 million dollars on the $75 million dollar WIU project.

Gov. Rod Blagojevich on Wednesday called for the largest tax increase in state history to pay for an ambitious program of expanding health-care coverage, increasing education funding and helping schools with construction projects.
Web extra: Read Blagojevich's speech


The proposed tax hikes, with no corresponding property tax relief, and a 10 percent increase in state spending drew a mixed response from lawmakers in both parties, ranging from tepid support to outright hostility.

In a 33-minute State of the State/ budget address before the General Assembly, the Democratic governor, as expected, called for a new tax on gross business receipts that would raise about $6 billion annually when fully implemented. He also called for a 3 percent payroll tax on businesses that don't provide health insurance for employees or that provide only bare-bones coverage, something that could generate another $1 billion.

Those tax increases would help pay for a $2.1 billion initiative to provide health insurance to 1.4 million Illinoisans not currently covered, a $1.5 billion increase for education and a $1.5 billion program to help schools with construction projects.

Blagojevich also said he wants to issue $16 billion in lower-interest bonds and lease the lottery for a projected $10 billion to pay down the $42 billion debt accumulated by the five state-funded pension systems.

Blagojevich described his budget plan for the fiscal year that begins July 1 as "prescribed by our collective conscience and by what I believe is a moral imperative." The $7 billion in tax hikes targeted at big business, he said, is a matter of fairness.

"The moral imperative is this: While the middle class pays more and huge corporations just walk, a child pays the price with increasingly crowded classrooms, the family in need of health care pays a price in health care they can't afford, the worker depending on a pension pays a price with a retirement that is no longer secure," Blagojevich said.

The D/A immediately found business types to howl about the proposal, including go-to guy, Bob Imler of River Stone, the same corporation which has projects slated for Big Island, and owns property where both the R.I. Casino is to be located as well as the property under the proposed Triumph hog slaughter plant, to decry the measure, as well as Moline Alderman Croty, who owns a metal plating business, and the owner of Teske's, who opined that the government is only to provide for defense, everything else should be determined by the market, a telling perspective.

The Chicago Tribune account put it:

Gaps in the Illinois health care system are more than a simple policy problem to Gov. Rod Blagojevich. They're a contradiction of God's intentions.

And state taxes aren't simply unfair. They "stick it to the people."

Trying to sell lawmakers and the public on his ambitious tax and health care proposals, Blagojevich framed the debate in terms of morality and class. Those who oppose him are, he suggested, turning their backs on what's right.

"To me, the choice is simple," the Chicago Democrat said Wednesday in his fifth State of the State address. "I stand with the people."

Some lawmakers accused Blagojevich of demonizing the opposition and using emotion to cloud an important debate.

"I want to cut through rhetoric and get down to the hard facts of what these things mean," said Rep. John Bradley, D-Marion.

Blagojevich proposed the biggest tax increase in Illinois history. He said the $7 billion in new business taxes should be used to provide health care to the uninsured and pump more money into public schools.

The state could cover 1.4 million uninsured adults, he said, while also providing a 23 percent increase in education spending next year alone.

Blagojevich argued that Illinois businesses don't pay their fair share of taxes, so taxing them more heavily would improve state services and ease the burden on regular people.

Rejecting the higher business taxes would "stick it to the people who clock into work, who count pennies and cut out vacations to make ends meet," he said.

The Chicago Democrat also proposed letting a private company take over the state lottery and borrowing billions of dollars. Those steps would generate about $26 billion that would be used to shore up the state's shaky retirement systems.

Business groups immediately condemned his proposals, particularly the taxes, as certain to drive up consumer prices and discourage companies from doing business in Illinois.

In an AP story on reaction to the plan, Sen. Jacobs is quoted as saying regarding Blago's plan to launch major new programs: "Do we really need new programs if our situation is so desperate we have to raise this kind of tax?"

He also indicated he'd hold his vote on the plan hostage to extort more money for the WIU project.


What's your two cents on the Governor's bold plan?