Proposal to raise taxes heading to Legislature?
BY KURT ERICKSON
Lee News Service | Friday, February 09, 2007
A coalition of lawmakers, labor unions and advocacy groups was back at it Thursday, resurrecting a plan to raise income taxes and begin taxing services such as haircuts and lawn care in the name of improving Illinois schools.
The group says the $9.5 billion plan, which also would raise money for the state's underfunded 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 hike.
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-income 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.
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.
State Rep. John Bradley, D-Marion, chairs the House Revenue Committee, which could hear much of the testimony regarding the tax increases.
He said Meeks' proposal is just one of many propositions that will likely arise between now and the scheduled end of the session in May.
**BREAKOUT**
Coalition proposes tax overhaul to aid Illinois schools
THE PLAN: Raise personal income taxes to 5 percent, up from 3 percent. Charge sales tax on services, such as car repairs. Use the money to lower property taxes, help schools and pay government pensions.
THE REASON: School funding varies widely depending on property values in each district, and critics say many schools can't provide a quality education. State pension systems lack the money they'll eventually need to pay retirees.
THE PROSPECTS: There's a growing consensus that something should be done for schools, but raising taxes is politically risky for lawmakers. Gov. Rod Blagojevich has consistently opposed tax increases.
-- The Associated Press Coalition proposes tax overhaul to aid Illinois schools
THE PLAN: Raise personal income taxes to 5 percent, up from 3 percent. Charge sales tax on services, such as car repairs. Use the money to lower property taxes, help schools and pay government pensions.
THE REASON: School funding varies widely depending on property values in each district, and critics say many schools can't provide a quality education. State pension systems lack the money they'll eventually need to pay retirees.
THE PROSPECTS: There's a growing consensus that something should be done for schools, but raising taxes is politically risky for lawmakers. Gov. Rod Blagojevich has consistently opposed tax increases.
-- The Associated Press
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