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Wednesday, Feb. 14, 2007 02:57 am

Pressure cooker

Demand for increased spending augurs charged legislative session

Untitled Document The governor has said he wants billions more a year for a universal health-care plan. Last week, a coalition of business and labor groups called on the state to put $5 billion a year into transportation for five years. The Regional Transportation Authority estimates that it needs $57 billion over 30 years to maintain, enhance and expand transit services.
Also last week, state Sen. James Meeks and the teachers’ unions unveiled a modified version of the infamous Senate Bill 750 that will not only provide new education dollars and roll back property taxes but will also pump $3 billion into the state’s underfunded pension systems [see Mick Dumke, “The church of clout,” Feb. 1]. Also, businesses big and small are apoplectic over the rumor that Gov. Rod Blagojevich will propose a multibillion-dollar “gross-receipts tax.”
The tax would zap pretty much every transaction conducted by businesses and provide billions of dollars (the business groups say maybe as much as $9 billion) a year for the state’s coffers. At least one new coalition has been formed to fight it, and more are likely on the way. Are we headed for the mother of all tax hikes? Let’s not get ahead of ourselves here. House Speaker Michael Madigan is still not communicating directly with Blagojevich. Senate President Emil Jones and Blagojevich (and their staffs) are meeting regularly and appear to be preparing to shove the governor’s and Jones’ agenda down Madigan’s throat, which won’t go over well. The governor’s absolute top priority, as noted above, is an expensive health-care package, and Jones’ top spending item is education funding. Nobody knows yet where Madigan’s priorities lie, but he is keenly interested in pension funding. As I’ve told you before, Madigan and Blagojevich aren’t getting along at all. Jones and Madigan are also having lots of problems with their relationship. The battle developing among the three Democrats appears almost Roman — a fight to the end rather than just your usual political spat. I say “almost” because Roman politicians often used real knives and swords and drew real blood. I doubt that we’ll ever get to that point here. Madigan’s initial reaction to the rumor about a gross-receipts tax was not positive, insiders say, which could set up a major showdown — that is, if the business groups are correct and the governor goes through with the idea. Right now, we have no idea either way. Many of Madigan’s most politically endangered incumbents were endorsed by big-business groups last fall, and Madigan has positioned himself as their defender since then. For instance, he held up the minimum-wage increase until some of their objections were addressed, and he gutted and then essentially killed off the 7 percent Cook County assessment cap, which business wanted dead. And then there’s the House Republicans. House GOP Leader Tom Cross will have to put votes on any proposal that includes long-term borrowing, such as transportation projects, because those bills require a three-fifths vote. The Senate Republicans have been aced out of the process because Jones has more than a three-fifths majority in the Senate. The bipartisan, multiregional pressure to pass a capital bill this year is so intense, as amply illustrated by the diverse business-labor coalition behind it, that Cross may be able to withhold his caucus’ votes and force a more “reasonable” revenue-enhancement and benefits package for the governor’s health-care plan and Jones’ education ideas. Cross has already said that he opposes a tax hike but also says that he is open to gaming expansion. Almost regardless of what they do, there’s no way that gaming money can fund all of the governor’s and Jones’ priorities, but it’s a pretty good start. And, finally, there are asset sales. The governor says he can get $10 billion if he puts the lottery on the auction block. There are those who say that he could be open to a tollway sale as well (Meeks, who negotiated the lottery sale for education funding, has often hinted as much), even though the governor said repeatedly during the campaign that he wasn’t for that particular idea. In the end, gaming and asset sales may be a way to avoid a drastic tax increase and may look a whole lot more inviting come May than they do now.
What this all adds up to is potentially the most interesting legislative session since Jim Thompson was in charge — or, if the Democrats can’t get their acts together, the mother of all duds. 

Rich Miller publishes Capitol Fax, a daily political newsletter. He can be reached at capitolfax.blogspot.com.
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