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In Quincy… Lots of anger here. At least half the crowd is opposed to the GRT. Kind of a raucus bunch. They even booed the minister. Ouch I’ve heard that the NFIB is very well organized here, but the opponents have so far identified themselves as just concerned citizens. I should note that most of the opponents have remained silent. Not everyone has booed. OK. Now all the opponents are booing. It started when the guv claimed thousands of big businesses pay hardly any taxes. Update I’m back at the hotel and am trying to catch up on a little reading. ArchPundit, a Democratic blogger, calls the GRT a “Terrible, Horrible, No Good, Very Bad tax.” Larry’s attack is mostly based on the pyramiding effect. The GRT hits IL businesses along the production and supply chain from the very beginning all the way through to the final purchase, making costs rise exponentially with each movement down the line. Pyramiding is a valid argument, and I don’t disagree, but it’s a little overstated. First, and foremost, competition being what it is, some companies in the supply chain won’t pass any of the GRT cost along or will only pass some of it on. Others in the chain won’t even be subjected to the GRT. You gotta first hit that minimum gross revenue (which, in the end, will undoutedly be higher than $2 million) before you’ll be taxed. Not every producer, supplier, whatever in every chain will meet the threshold. The Farm Bureau estimates that only 1,000 IL farmers would be directly subjected to the GRT, for example. On the other hand, many of the companies that make and distribute agribusiness “inputs” (seed, fertilizer, etc.) would likely be hit by the GRT, which could very well drive up costs for Illinois farmers. Also, that gross revenue amount only applies to in-state sales. A company that sells $20 million a year total, but only does ten percent of its sales in Illinois would meet the $2 mil threshold, but they would only pay GRT on that $2 mil. A company that sold $10 mil a year, but only ten percent was in-state would not meet the minimum and would not be subjected to the GRT. The pyramiding argument can also be made about the corporate income tax, because all of the various manufacturers, producers, etc. are subject to that throughout the chain of production to final sale. The problem in Illinois, as the guv keeps saying, is that not all the companies are paying everything they should because of various loopholes. Under this current proposal, the corporate income tax is either phased out or eliminated right away (I can’t remember which right now) and businesses who pay the corporate income tax will get a credit for that tax on their GRT bill. Some will also get a little bit of property tax relief and many will get help with their health insurance premiums. Some of the opponents of the GRT are pushing instead for an income tax hike. I, for one, already pay more corporate income tax than the Tribune Co. has in some years. A personal/corporate income tax hike hits both my company and my personal wallet, while Mother Tribune will continue to avoid corporate taxation. Not fair whatsoever. Those same GRT opponents also want a new service tax. It’s indisputible that some of the GRT’s costs will be passed through to consumers, but a service tax means everyone will see higher prices. Guaranteed. All that said, however, the single biggest problem with this GRT idea that I can see is that it’s not based on the ability to pay. And that is a huge, unspinnable obstacle. But if we’re gonna debate, let’s get it all on the table.
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On he bus… Molly Parker of the Peoria Journal-Star is interviewing the governor now, so I thought I’d take a moment to blog a bit more. Again, apologies for any typos.. We’re on a country road and it’s a bit bumpy on the bus right now. So far, the only real “news” about the tour is just the existence of the tour itself. The local media has expressed quite a bit of interest. Reporters almost outnumbered local participants at the Peoria event. Local legislators have been rare at the stops. Two showed up yesterday in Moline, and one attended the Galesburg event. None were in Peoria or Rockford. One showed up for the lunch in Elgin. Most legislators have been panicked by the rhetoric on both sides of this GRT thing. Ill have more on that in tomorrow’s Capitol Fax. The governor got his first Ameren question today, in Peoria. He didn’t say much about the issue, other than he supports the rate freeze, and that he was confident that the legislative process would work. A Peoria radio reporter also asked what he would say to people who might lose their jobs after their company moves out of state after the GRT is enacted. “It would be ridiculous to leave,” Blagojevich said, pointing out that the GRT would apply to out of state companies that sell goods and services in Illinois.
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On the bus, Day 2
Tuesday, Apr 3, 2007 - Posted by Rich Miller Actually, I’m not on the governor’s bus at the moment. Still in the hotel waiting to leave. If you were expecting a Capitol Fax today, there wasn’t one. A big reason I’ve avoided tours like this in the past, particularly on the campaign, is that I usually try to write a few stories a day on completely different topics, and riding on a bus chatting with an always chatty governor isn’t exactly conducive to news gathering. As I mentioned yesterday, most of the conversations with Blagojevich have been off the record - another reason why there’s no Capitol Fax today. Keeping it off the record and informal is what I normally do if I’m having dinner with a legislative leader. It cuts through most of the normal political BS and the ever-present double-talk and helps me understand what’s really going on and gives me an idea how that person is thinking. While I can’t tell you what we discussed, the conversations have been satisfyingly frank and straight-forward. There’s been plenty of levity, of course, but we’ve gotten to the heart of several issues that I’ve been wondering about for weeks, months, even years. I wanted to do the whole tour because I figured he could script a day. The object was to get just a few minutes of reality somewhere during these four days. I surpassed that goal yesterday, and more. A couple of quick notes. The first thing out of his mouth yesterday was, “Where’s Paul?” My intern, Paul Richardson, made a very favorable impression on the guv during our interview a few weeks back. He seemed a little disappointed that Paul wasn’t on the tour. Also, my parents showed up for the Quad Cities stop yesterday. To say they were skeptical of the gross receipts tax idea would be a huge understatement. One of my four brothers has a business that they (and he) believed would be impacted. But when told that the GRT would not be levied on products that he ships out of state (which is most of his business) they started to come around. This is one topic that Blagojevich and I spent some time on yesterday. The immediate opposition to this tax hike has been intense and broad-based and lots of businesses that won’t be hit directly are still completely and absolutely opposed (although there is the pyramiding aspect of this idea that troubles people whose own business won’t be taxed but could see the cost of their suppliles and services increase). It’s a complicated issue and not easily explainable in press-pop sound bytes and 30-second TV ads. But he’s gonna have to calm people down before they’ll be willing to listen, and I’m still not sure how he can pull that off, especially with stories like this one from the AP…
Going after Reverend Jackson is probably not the best idea he’s ever head, to say the least. I’ll blog again later today, but here’s a Treo photo of the bus…
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Question of the Day
Tuesday, Apr 3, 2007 - Posted by Paul Richardson Nationwide the number of female statehouse leaders has doubled in only 7 years:
My knowledge of state political history doesn’t cast a long shadow, but I don’t think our record on female leadership is that strong. We’ve had a pair of failed gubernatorial bids, a couple Congresswoman, and a not a whole lot else. Question: When will the next female leader break through in Illinois? What position? Who?
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Morning Shorts
Tuesday, Apr 3, 2007 - Posted by Paul Richardson * Budget Stories:
* Jesse Jackson Sr: Invest in hope, America, not despair * Sun-Times Editorial: Get the funds necessary to fix mass transit * Editorial: ‘Official’ roadside memorials won’t solve problem * Editorial: Thumbs down to U of I for revoking scholarships to military vets * State revokes Elgin PADS grant * Proposed Illinois law change would allow reckless homicide charges in more traffic fatalities
* Police Supt. Cline knocked out by beating scandal
* Sneed: On surprise Cline resignation * Mark Brown: On Cline’s departure * Tribune goes to Zell * Country Club Hills mayor accused of racial remark * Davlin far ahead in the Springfield money race
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