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| NewsWednesday, March 18, 2009 12:15 PM CDT |
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Quinn trying to sell tax hikes, fee increases in
budget address
SPRINGFIELD -- Gov. Pat Quinn will play the role of a salesman Wednesday, pitching a series of politically unpopular tax and fee hikes as part of his prescription for fixing the state's ailing finances. From raising the income tax to boosting the cost of a pack of cigarettes, the Chicago Democrat will try to convince lawmakers and voters to support his plan, even though the billions of new dollars will be spent mainly to keep the state afloat, rather than on new programs. Analysts say it is the state government equivalent of spending money to keep an old car running, rather than buying a shiny new one. And, it shows just how far in the hole state finances have fallen. "What you really need is a revenue system that can help the state pays its bills," said Ralph Martire, director of the Center for Tax and Budget Accountability. Quinn's plan seeks to reform the state's tax system by boosting the income tax rate by up to 50 percent, while adding more tax exemptions in a bid to soften the blow for families earning under $60,000 annually. It would be the first income tax increase in Illinois since 1993, when the current 3 percent rate was made permanent. Quinn also is mulling a $1 per pack increase in cigarette taxes that would be spread over two years, as well as higher taxes for businesses. Hoping to win some support for his plan, Quinn said Tuesday that he wants to offer taxpayers a sales tax holiday in late summer, so people can buy clothes and other school supplies without having to pay taxes. The governor's budget blueprint aims to chip away at a deficit that has ballooned to more than $11 billion, leaving the state unable to pay its bills on time or keep up with employee pension costs. Quinn is expected to outline $850 million in cuts to the current budget, as well as announce changes aimed at reducing future state pension costs, including a possible extension of the retirement age to 67, up from 65. State workers would also be required to take furlough days as a way to save on payroll costs. The governor also is expected to announce the merger of the Illinois Department of Natural Resources and the Illinois Historic Preservation Agency as a way to save administrative costs. The fate of historic sites that were closed by former Gov. Rod Blagojevich was not known Tuesday evening. Analysts say the pension changes would be welcome, but they won't do enough to address the chronic underfunding of the state's pension systems. The state simply needs to start paying a bigger share to the pension systems, said Eden Martin of the Civic Committee of the Commercial Club of Chicago. "You've got to bite the bullet," Martin said. Republican lawmakers say Quinn must make an effort to cut costs before asking for higher taxes. "In order to fill a hole, you've got to stop digging," said state Rep. Dan Brady, R-Bloomington. "To simply try to tax our way out cannot solely be the approach." |
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