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muster even a simple majority in the House last month.
"We know going in that the governor is against our bill," Cullerton said. "So, we are anticipating that we will need to
override his veto. We're looking for Republican support. We need that Republican support and we're actively courting
Republicans in both the Senate and in the House."
But that Republican support could be hard to find, according to Sen. Minority Leader Frank Watson. He says there is very
little, if any, support on his side of the aisle for the proposal.
"This would be the largest tax increase in the history of the state," Watson said. "It's not well thought out. It's all
about more money for government - more money for this and more money for that. It's not about trying to make Illinois a
competitive state when it comes to business. The one thing that we have going for us here in Illinois - one of the few
things - is that we have a very reasonable tax structure. But this would put us in the upper echelon of taxes and continue
to drive more and more nails into the coffin of the business and job climate in this state."
In addition to dramatic increases in the income tax rates, SB 2288 would reduce local property taxes levied by school
districts, dedicate large sums for new educational programs and create an ongoing appropriation to fund capital
developments.
More specifically, the bill would increase the individual income tax from 3 percent to 5 percent and increase the
corporate income tax rate from 4.8 percent to 8 percent. When the corporate replacement tax of 2.5 percent is added,
Illinois jumps to the second highest corporate income tax rate in the country - exceeded only by Iowa with a top corporate
rate of 12 percent, according to the Illinois State Chamber of Commerce.
SB 2288 would provide a refundable income tax "Family Tax Credit" for singles or married couples filing separately with
annual income less than $26,847 or for married couples filing jointly with annual income less than $53,694. These income
caps would automatically increase every year by an amount equal to the Consumer Price Index for the previous year. The
credit amount is based on a sliding income scale with the smallest credit set at $45 and the largest credit at $240. These
credit amounts would also increase automatically.
Under SB 2288, school district property taxes for 2009 would be abated in an amount equal to the "property tax relief
grant" and any "supplemental property tax relief grant" provided to the local districts by the state. The grants are
designed to replace 20 percent of the total property taxes levied for each school district. There are no limitations in
the bill to prevent school district levies from increasing over time, however. For 2010, the amount appropriated would be
$2.9 billion. This amount would also increase automatically each year.
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The "foundation level" of funding for schools would increase gradually from $5,734 today up to $6,974 by 2012. The
foundation level is the amount of money that state officials determine will afford every child a high-quality public
education. After 2012, the foundation level would automatically increase every year.
SB 2288 would also increase funding for special education, early-childhood education, provide grants for high-poverty
schools, supply additional funding for literacy coaching, longer school days, smaller class sizes and teacher mentoring, and
it would supply more money for Illinois colleges and universities.
Finally, SB 2288 would create the "Invest in Illinois Fund." This would take the place of the previously proposed
expansion of gambling in Illinois as a way to fund capital development programs. The fund would receive $1 billion per year
beginning in fiscal year 2010.
According to Cullerton, the bill really shifts the tax burden by giving tax credits to low and middle income earners -
and by reducing local property taxes.
"Not one penny in this bill is going to the operation of state government," Cullerton said. "We're giving more money to
education, we're paying our debts and we're investing in the infrastructure. And that's it. There's no expansion of state
government; there's not a penny for any increase in health care. It's all about paying off our debts and investing in
education and infrastructure."
But Watson disagrees. He says the state has been living beyond its means throughout the years of the Blagojevich
administration, and this is just more of the same.
"They call it a swap, but it's far from that," Watson said. "$1 billion of it goes to a capital program and then there's
$2 billion in property tax relief, so that leaves $5 billion for other purposes. And most of that, of course, will be
gobbled up by the governor for his proposals. It won't go to pay bills, to pay the Medicaid bills and pay those who provide
the services or to pay contractors who have done work for the state. It won't go to that. It will go to all of this
expansion of his (Blagojevich's) insurance program that he wants to do."
Cullerton said that perception is just not correct. He reiterated that money won't be used on an expansion of programs.
"We're paying off our debts so that we can eliminate the title of the deadbeat state," said Cullerton.
But Douglas Whitley, president and chief executive officer of the Illinois State Chamber of Commerce, says the Democrats
who control the legislature are simply taking the easy way out - raising taxes rather than cutting spending.
"Instead of trying to manage their way through tough economic times," said Whitley, "the Democrats' solution is to tax
their way through tough economic times. It fixes some of the problems, but it also leaves the ruling party with a huge
amount of slush fund money to be spent for whatever governmental purposes they want. We have fiscal problems in Illinois.
When the first solution is to raise taxes by huge amounts so that you're literally rolling in excess funds, I'm not sure
that's a good long-term strategy. The real focus of Illinois politicians ought to be on job growth, not tax growth," Whitley
added.
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