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Thursday, June 19, 2003 02:20 pm

Read his lips

Rich Miller says he can cut the deficit without raising taxes—let him count the ways.

By now, you've heard that Governor Rod Blagojevich was so surprised about the state's budget deficit that he is considering raising taxes. He claims the deficit is $4.8 billion--at least a billion higher than he'd expected--and not the kind of hole he can just cut his way out of.

If he really didn't know the budget problem was this bad, he was engaging in willful ignorance. But I'm not yet willing to bet that your taxes will go up much, unless you own a corporation.

Some taxes that were going down might stay right where they are.

For instance, the scheduled federal reduction in the estate tax will cost Illinois $200 million, more than half of which will go to just a couple hundred families. Expect Blagojevich to "de-couple" Illinois from the federal cut.

Lieutenant Governor Pat Quinn's idea to charge some 400 quasi-government agencies a 5 percent "administration fee" could, he says, bring in $500 million to $1 billion a year.

Blagojevich is rumored to favor giving the state's nine riverboat casinos an extra 300 gaming positions each--an idea that could generate $250 million a year. And he will undoubtedly go after "corporate welfare" and "corporate loopholes," which could bring in anywhere from $200 million to $1 billion per year, according to the Center for Tax and Budget Accountability.

"Means-testing" for state tuition and property tax credits could save $52 million and $100 million per year, respectively. Leaving open all 11,000 state jobs vacated by early retirement would save $500 million to $800 million.

There are other things Blagojevich can do, including borrowing on future tobacco settlement proceeds and cutting the budget. As Quinn said last week, the administration's top priority is to "Cut costs, cut costs, and cut costs." Look for mostly symbolic cuts (Blago is a Democrat, after all), but he'll have to inflict some pain to retain any credibility.

By not raising taxes, Blagojevich could break the cycle of cynicism that has followed almost every statewide election for the past 20 years. After vowing otherwise, George Ryan hiked taxes and fees soon after taking office. Jim Thompson did the same after both the 1982 and '86 elections--he claimed the budget deficit was much worse than he'd thought. Jim Edgar flip-flopped after the 1994 election. By sticking to his no-taxes pledge, Blagojevich would go a long way toward guaranteeing that the legislature remains Democratic and that he is re-elected. And his presidential dreams, which seemingly hover over everything he does, will be kept alive (at least in his own mind).

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