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Wednesday, March 14, 2007 02:59 am

How to spell relief

Governor may accede to tax-swap proposal to fund schools

Untitled Document Gov. Rod Blagojevich is proposing a massive infusion of cash for public schools, but whether his proposal will mean relief for property owners is unclear. Blagojevich briefly mentioned property taxes during his annual budget address at the Statehouse last week but said not a word about whether his spending plan would provide any direct property-tax relief. However, in an exclusive interview just after the speech, the governor said he’d back the idea — if the Rev. James Meeks, an influential member of the state Senate, demanded it. Aides to the governor have said that the large amount of money Blagojevich wants to give to K-12 schools ($1.5 billion in the first year and about $3 billion in each of the next three years) would help slow the rise of property taxes all over the state. Senate President Emil Jones agrees with that logic. After the governor’s address, Jones told reporters that the huge “infusion of money,” generated from a hike in the gross-receipts tax, will mean “there will be no need to run to the property taxes.”
However, Jones says, addressing the inequities of the property-tax system may have to wait. “I don’t know how we can adequately address the property-tax issue so it would be fair,” Jones said, adding, “I’d rather see all of the money go to school reform.”
Jones then said he wouldn’t call Meeks’ tax-swap proposal for a vote. Meeks wants an income-tax increase in exchange for property-tax rollbacks. Meeks wandered into the press conference shortly thereafter, and I asked him whether the fact that Jones refused to call his bill meant that he would have to work against the governor’s gross receipts tax. Before that would happen, Meeks said, he would try to persuade the governor to incorporate some sort of property-tax relief into his legislative package. Meeks, you may recall, dropped out of the governor’s race after Blagojevich promised him lots more money for schools [see Mick Dumke, “The church of clout,” Feb. 1]. When told of Meeks’ statement, Blagojevich was quick to agree to the demand. “Absolutely. That is the type of constructive input that we are looking for,” he told me during an interview in his Statehouse office. “We discussed whether we should maybe be a little less ambitious with the school funding and provide property-tax relief,” Blagojevich explained. “We netted out on more for schools that would naturally relieve the pressure on local governments. But if Rev. Meeks and    others are interested in putting a property-tax-relief component in there, count me in.”
Meeks said later that he had spoken with Blagojevich after my interview and that the governor had also told him that he would   support property-tax relief during the spring session. Meeks indicated, however, that he would be holding out for a significant relief package. The turnabout is important because for years property-tax rollbacks have been an    integral part of proposals for education-funding reform. Quite a few business groups, particu-larly in south suburban Cook County, where property taxes have skyrocketed as the       industrial base has evaporated, have pushed hard for the concept. Because many businesses don’t pay much or any corporate income tax, they don’t care so much about increasing that tax as long as their property taxes are reduced. The switch is also important because one of the biggest public complaints about the governor’s proposals — besides the big tax hit faced by big business — was the lack of property-tax relief.
If Meeks does indeed abandon his long-sought income-tax hike, the “alternative track” that has been quietly developing in the Illinois House to counter the governor’s gross-receipts tax on business would be seriously undermined. Meeks has worked closely with the House   people all year, saying as recently as the day before the governor’s speech that he would be siding with House Speaker Michael Madigan against the governor. Such a change would upset the apple cart in a big way and might force opponents of the gross-receipts tax to go back to the drawing board. Blagojevich’s quick change of heart is also important because the vote margin in the Senate for the governor’s proposed gross-receipts tax will likely be razor-thin, so any extra votes he can pick up will be extremely important. 

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