On March 7, Governor Rod Blagojevich presented a budget plan that continues to push Illinois along the same fiscally dangerous course he has long pursued. He proposed balancing a fifth year of higher spending, deeper debt and pension gimmickry squarely on the backs of businesses, the citizens they employ and the consumers who buy their goods or use their services.
As is his style, the Governor had a lot of big plans, but offered few details. Now, nearly three months later—as the deadline approaches for the General Assembly to adjourn—we are hearing more about Governor Blagojevich’s multi-billion-dollar tax hike. He has proposed a new tax on the gross receipts of businesses, which would be assessed on all income received by a business regardless of how profitable the business may be. The gross receipts tax (GRT) is the largest tax increase ever proposed in state history, estimated to cost businesses and consumers $7.6 billion.
Not surprisingly, the response has been largely negative. Over the past several weeks, there has been a groundswell of opposition from groups across Illinois against the Governor’s GRT. State officials like Lt. Governor Pat Quinn, Comptroller Dan Hynes and Treasurer Alexi Giannoulias, as well as Republican and Democrat lawmakers in both the Senate and the House of Representatives, have also spoken against the plan.
Our concern is that businesses hit with the $7.6 billion GRT would be forced to either cut jobs, reduce benefits for their employees, move out of Illinois or shift the costs to consumers— as much as $2,400 annually for every family of four.
The message we are hearing from state officials, lawmakers, businesses and constituents is loud and clear—the GRT is bad for jobs and bad for working families in Illinois.
Listening to the Governor, it is hard to believe he has interpreted our current economic situation in such a positive light. How can he look at debt, unpaid bills and the largest tax increase in state history and call it good? If he continues down the road of “borrow, tax and spend,” then our state’s financial future is bleak. IBI