Budget reaction

Gov. Rod Blagojevich’s budget proposal for the next fiscal year now goes to the General Assembly. Many Democratic and some Republican lawmakers applauded parts of his plan, but there’s a lot of negotiating to be done before the spring session’s constitutional deadline of May 31. (I’m not holding my breath that they’ll adjourn by then.) Deanese Williams-Harris and I gathered some reaction from lawmakers on Budget Day:
See highlights of the governor’s budget proposal in the “governor’s moral imperative” blog entry below.

Senate President Emil Jones Jr.
He says he supports the governor’s entire plan and doesn’t have anything he wants to change right now. While he supports the tax on business’ gross receipts (because it would be fairer than the current tax on corporate income), he leaves the door open to other revenue ideas.

Specifically — and significantly — Jones says four new casinos in the Chicago area are still on the table. And that could possibly be linked to a capital plan for school and road construction. He also says senators are talking with utilities and that a tax on power generators is something to consider for easing electricity rates, although he’s not revealing his stance on the subject, yet. He flat out opposes another regulatory freeze on electricity rates because he says it would “only delay the inevitable.”

Rep. Lou Lang, a Skokie Democrat
He introduced gaming legislation to create four new casinos in the Chicago area, which he expects could generate $2.3 billion to $3.5 billion this year. The governor didn’t mention gaming in his budget address.

“I think that to ignore the obvious economic development and revenue that we could get by making some changes in gaming laws is short-sighted. I did notice that while he didn’t mention it, his budget plan includes new taxes on casinos. And so it’s a tremendous source of revenue for our state, and to make it more difficult for them to do their work, to make it more difficult for them to create jobs or build things all over the state of Illinois, I think he’s putting a road block in front of a business that simply wants to invest in Illinois. I think we need to do more in that area.”

“I think my plan regarding gaming and his plan might find a way to mesh. And we need to sit down and talk about balance. I’ve got a bill that would generate $2 or $3 billion. I don’t think we should ignore that. And I’d do it without a tax increase. The governor’s proposal today will raise several billion dollars, but it’s taxes. No matter what he calls it, it’s taxes.”

House Minority Leader Tom Cross of Oswego
About the gross receipts tax: “Call this what you want. It’s a tax on consumers. What’s interesting about today and the speech is that everything is connected. The concern you would have about lottery is that you’re giving up $620 million in annual revenue. And the governor would say, I suppose, that if you do GRT it wouldn’t matter.”

“I’m not embracing [the idea to lease the lottery], but I’m not outright dismissing it. The thing about the lottery is, ‘What would be the conditions of the lease? What would the company that comes in and gives us money demand?’ Might be some good, might be some bad.”

About education: “No one is talking today about how to ensure a quality education. I don’t know if everybody accepts the premise that if you throw $1.5 billion into schools, then all of a sudden you’re going to end up with a perfect product. We need to focus our attention on how we can end up with a quality education and a quality product at the end of the day and not just have a discussion about money.”

Sen. Minority Leader Watson of Greenville
About the governor’s spending plans: “This is the largest spending increase in the history of the state, the largest tax increase in the history of the state,” he says. “Another $16 billion in borrowing, and what troubles me greatly is to see the debt being piled upon debt.”

About universal health care: “Fifteen percent of people in Illinois do not have health care insurance, and I feel bad for them. But is it the government’s responsibility to take care of them from birth to the grave?”

About electricity rates: “The issue of the day is what’s happening with people getting their power? To not even spend four sentences on the power rate issue and then have the audacity to say I’ll sign whatever bill you agree to, that’s not leadership.”

About the gross receipts tax: “The consumer is who pays taxes in Illinois, and for him to stand there and say that this isn’t going to be an increase on taxes to the consumer is totally misleading to the public. There’s a certain amount of class warfare that’s being developed by these kinds of policies. It’s a hidden tax and those are the worse kind.”

Sen. James Meeks, a Chicago Democrat
He’s sponsoring the education reform proposal in Senate Bill 750, which we explain in our “Moneymakers” blog entry February 9, 2007.
“Generating new dollars for education is great, but true education reform is going to have to deal with property tax relief.” Under the governor's plan, Meeks says, “Those who are paying property taxes that are too high now, there is no room for relief for them.”

Sen. Christine Radogno, a Lemont Republican
She’s the Senate GOP budget negotiator and last year’s Republican candidate for treasurer.
About the gross receipts tax: “The consumers will be paying that. The assertion that he made in the speech over and over again — it’s corporate, not people — is just baloney. Corporations don’t have bank accounts and checkbooks the way a family does. There’s really no such entity. It’s a legal entity. There’s no question a $6 billion tax increase is going to be paid by people. If it was not going to be paid by people, why would he exempt food and drugs? Because he knows it’s going to apply to people. It is a sales tax that is embedded throughout the system, and people will pay it. They won’t be able to see it, but they will pay it, there’s no question.”

About pension bonding: “There are ways to do it that could be positive. The question is what are the details of his plan, and that’s oftentimes the problem with this administration: We don’t see the details. We’ll have to see how the bonds are structured, whether he’s going to take some of that bond money out to use as cash for budget relief today instead of putting it all in [pensions]. I would take a look at that, for sure.”