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State tax plan back in play
Hikes to generate school funds face debate, major obstacles
By Kurt Erickson
kurt.erickson@lee.net
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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 increase.

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,” Miller said.

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 the income of 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,” Martire said.

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 expand gambling in Illinois.

State Rep. John Bradley, D-Marion, chairs the House Revenue Committee, which could hear much of the tax-hike testimony. He said Meeks’ proposal is just one of many propositions that likely will 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.
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Reader comments on this story - 11 total

Note: All views and opinions expressed in reader comments are solely those of the individual submitting the comment, and not those of the Pantagraph or its staff.

SH wrote on February 09, 2007 12:16 PM:"I HOPE ANYONE WHO POSTS OPINIONS ON TOPICS LIKE THIS ONE, ALSO EMAILS ALL STATE REPRESENTATIVES. THRU THE MAGIC OF EMAIL, WE DO HAVE A VOICE! I'VE USED IT, IT WORKS. GO TO THE STATES HOME PAGE AND FOLLOW THE LINKS TO ALL OF OUR GOVERNING BODIES! LET THEM KNOW THEY'RE BEING WATCHED!"

Raising taxes wrote on February 09, 2007 11:40 AM:"Start with a high tax on the incomes of politicians only. I think Ameren had the right idea on perentages; something in the neighborhood of a 55% tax increase on politician's incomes would help. I like the iea of a citizen protest in Springfield too. I'll go; tell me where and when. "

been there wrote on February 09, 2007 11:38 AM:"Try cutting waste before raising taxes.There's enough waste and corruption within the budget that can be cut instead of raising taxes. "

Tired of the "School Tax" wrote on February 09, 2007 11:21 AM:"Here we go again using the Schools as an excuse for raising taxes...what are the other "School" tax programs revenue gone and what are our lawmakers using it for? Where have all the billions of dollars from the lottery gone that were to be used for school taxes? Are they even being allocated to our school systems like they were originally set up to do? Were they ever used in our school systems? Seems like evertime our out of whack lawmakers here in Illinois wants more revenue, all they have to do is use our kid's education as their excuse to raise taxes. Make everyone feel guilty if we don't support it."

Chuck in Normal wrote on February 09, 2007 10:09 AM:""We are going to charge you this tax, but we are going to lower your property taxes!?" It will "NEVER" happen! We will just pay more taxes and the one's in charge will still over spend in order to buy the people's votes! "Read My Lips...NO NEW TAXES!""

No kidding wrote on February 09, 2007 9:44 AM:"What did people expect when they voted in the tax-and-spend democrats? You would have thought that after Blago raised all the fees his first term we would have had enough of him also. Hunters raise millions through buying permits and licenses yet the department of natural resources is continually gutted! The very same thing happened with the lottery and the schools. Money came in and they moved it somewhere else. All you people who don't vote need to get off your cans and get these creeps out next time!"

Farkel wrote on February 09, 2007 9:15 AM:"And do you all remember that Mayor Daley backed a crooked Republican for governor over a downstate Democrat? Look what that got us -- George Ryan's (in)famous "Build Chicago, oops, I mean Illinois" program. . . . . . . By the way, editors, there's one sentence in the article that doesn't make sense, no matter how many times I read it: "In addition, Martire, executive director of the Center for Tax and Budget Accountability, said the proposal would offer tax credits to lower the income of wage earners to offset the increase in service taxes." Huh? Do you mean "to lower income wage earners"? "

Devil's Advocate wrote on February 09, 2007 9:12 AM:"Typical how the ones who will benefit most from a tax increase are the ones proposing it. It would be nice someday to see the entire taxpaying body of the state load into a half million buses and decend upon the capitol to protest any attempt to raise taxes. (That is if they can find the capitol nowadays, Springfield or Chicago?) As for Emil Jones, isn't he the Democrat clown (protector of the poor and downtrodden) who sat on his duff while Ameren jacked your rates up 55%? Trust him to keep your taxes down? You have got to be joking!"

Union Firefighter wrote on February 09, 2007 8:15 AM:"Its bad enought that the your heating bills are draining your pocket books. NOW the state wants more!! You should have voted REPUBLICAN."

todd wrote on February 09, 2007 7:55 AM:"You know I would almost be for something to generate some more revenue. I am so sick of hearing these last few years about how broke the state is and hearing about all the programs the state is dropping due to lack of money. The last few years all Blago has been doing is robbing Peter to pay Paul. "

Not a Democrat with short term memory wrote on February 09, 2007 5:38 AM:"I remember when the Illinois Lottery was suppose to pay for education. "
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