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Wednesday, Feb. 27, 2008 12:51 am

Tax hike?

In an election year, legislative leadership considers the unthinkable

Untitled Document Normally a tax hike would be the last thing that state legislators would consider in an election year. Tax increases are usually approved in “off years” to give voters time to forget before they vote again — so you’d think that any talk of a large income tax increase in Springfield would be the last thing being considered. But the ever-growing likelihood that U.S. Sen. Barack Obama will end up as the presidential nominee is giving Illinois Democrats hope that his presence at the top of the ticket will neutralize any voter negativity associated with just about anything they do this year. One of the controversial items on the agenda for some of those Democrats? An income-tax increase. A spokesperson for Senate President Emil Jones confirmed last week that Jones is once again supporting an income-tax increase. Last year at this time, Jones joked with reporters that although state Sen. James Meeks’ proposal for an income-tax hike wasn’t exactly dead he would be assigning it to the “Hospice Committee” and wouldn’t allow a floor vote on the bill. Jones had long supported an income-tax increase for the purposes of school funding and property-tax relief, but he abandoned that position last year in favor of the governor’s gross-receipts tax — which never went anywhere — and adamantly refused to budge. Jones’ refusal to even consider the income-tax-hike bill (SB 750), roundly criticized by many of his own members, was one of the many factors that drove a deep wedge into his caucus last year. The Senate leader’s opposition doomed what many had considered the tax increase’s best chance of passage in a decade. The 2008 election was still far away, business leaders were desperate to sign on to an alternative in the face of the looming gross-receipts tax, and even many Republicans were quietly signaling a willingness to consider the proposal. Earlier this month, Meeks quietly introduced a new income tax hike bill, SB 2288. The proposal would not only raise money for schools and property-tax relief but also fund a capital construction bill for roads, bridges, schools, and mass transit. Unlike last year’s version, the new proposal would not slam newspapers with a tax increase on ink and newsprint, and it stays away from a controversial service tax.
Meeks said last week that he had discussed his new proposal with Jones but wouldn’t say whether his leader specifically supports the bill. Meeks opposes a proposed expansion of casino gambling to fund the capital bill, and he has said that serious problems remain in passing such a plan, so Jones may be open to an alternative. Jones pushed harder for a gaming-expansion plan last year than for anything else — it was one of the few big pieces of legislation that he persuaded his hopelessly divided caucus to support. But last week Jones said that an income-tax hike could pay for the capital plan. Meeks and others seem hopeful that some sort of arrangement can be made with Gov. Rod Blagojevich, now that the governor has broken his campaign promise, with the mass-transit bailout, never to sign a tax hike on “people.”
A spokesman for House Speaker Michael Madigan said that his boss wouldn’t want to be the “Lone Ranger” on a tax hike bill but has talked about how small tax hikes would make more sense than would gaming for the capital program. “I would put him down as willing to discuss it,” the spokesman said. The governor has already announced his opposition to the Meeks proposal and has said that he will veto any income-tax hike. Of course, he said the same about the recent sales tax increase, which is now law, so one never knows what the future might bring. The tax hike is still a long shot, but it’s worth keeping an eye on.

Rich Miller also publishes Capitol Fax, a daily political newsletter, and
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