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Saturday budget negotiations roundup

Saturday, May 26, 2007 - Posted by Rich Miller

* Buried in all of today’s stories about more casinos is a plan put in front of Senate Democrats yesterday to increase taxes. From the Daily Herald

Senate Democrats are also pushing to close nearly $600 million worth of annual corporate tax breaks and want to impose the state’s corporate income tax on certain businesses such as “S corporations” that currently aren’t subject to that tax. That, combined with expanded gambling, could raise $5 billion annually.

* AP

Health insurance tax: Up to $1 billion from a 3% payroll tax on employers who don’t spend enough on health care for their workers.

Business taxes: up to $1.2 billion from applying the state’s corporate income tax to businesses that currently do not pay it; $600 million from a new alternative minimum tax on businesses who owe no state taxes after exemptions.

Ending tax breaks: $650 million from ending various corporate tax breaks.

Sales tax: Up to $40 million from technical changes in the way sales tax is collected and calculated for certain products.

* I had this for subscribers yesterday afternoon, but since others are talking about it now here is the document that was given to Senate Democrats yesterday about revenue generating options. Click for a larger pic…


* OK, now to the casinos. AP

Senate Democrats introduced a massive gambling proposal Friday that could be coupled with new business taxes to generate $5 billion for the state.

The gambling plan, approved along partisan lines by a Senate committee, would allow four new casinos, including one in Chicago. Existing casinos would be allowed to nearly double in size. […]

“If it means health care for everybody, I’m willing to accept the proposal that would provide more gaming,” Blagojevich said after meeting with Jones and House Speaker Michael Madigan (D-Chicago).

* Tribune

Actually, Blagojevich’s plan for medical coverage for uninsured adults must be slashed by two-thirds because of lower revenue projections, said Senate Majority Leader Debbie Halvorson (D-Crete). […]

House Republican leader Tom Cross of Oswego offered his own “no tax increase budget,” which relies on growing state revenues, cutting pork projects and a scaled-down expansion of gambling to fund various construction projects.

Madigan suggested the Cross gambling plan, which would add positions only at existing casinos, would stand a better chance in the House than the broader Senate bill.

* Daily Herald

Blagojevich said he, Jones and Madigan swore to one another that “we were going to act as Democrats in good faith to finish on time before May 31, to finish the business of the people on the date that we’re supposed to, and to keep the Republicans from getting into the game.”

That sworn partisan allegiance was news to Madigan’s spokesman. “I don’t know what the hell that’s all about,” said Steve Brown. Madigan has been meeting with Cross on budget matters.

And Cross’ spokesman blasted Blagojevich’s message given Democrats’ inability to work together so far.

“They control the House and the Senate and the governor’s office, and they’ve done a bang-up job working together this session,” said David Dring, Cross’ spokesman. “If they’re more worried about partisan politics than what’s good for the people, that’s a shame, but that’s definitely their prerogative.”

* Once again, back to the casinos. Sun-Times

Republicans attacked the proposal, in part, because it would divert 2 percent of revenues from the four casinos to Chicago State University, potentially handing the school a $40 million windfall that would double its take from the state.

The university has been a Jones favorite. He has steered state funds to the university when other colleges faced deep cuts, and Chicago State has named a building after Jones and given him an honorary degree.
This week, the university was hammered by Auditor General William Holland for misspending public funds, including on a pair of “leadership seminars” its president attended on cruise ships in the Caribbean and Mediterranean.

In committee, Jones initially said Chicago State wasn’t in the legislation. But the GOP pointed out the specific language in the 218-page bill that would assure the university a multimillion-dollar windfall, prompting Jones to quietly tell a dissatisfied and surprised Senate Democratic colleague that the bill could be amended.

* Meanwhile, Dick Durbin and other members of the Illinois delegation urged the General Assembly and the governor to come up with cash for transportation projects. Sun-Times

After simmering for months over Gov. Blagojevich’s inaction, the two Illinois senators and nine of the 19 House members on Friday unloaded on the governor for risking $6.1 billion in federal money for Illinois transportation projects.

At issue is the need for the state to come up with more than $1 billion in order to trigger the release of the $6.1 billion. The money was part of a big transportation bill Congress passed during the last session, when Rep. Dennis Hastert (D-Ill.) was the speaker. […]

“If the State of Illinois does not enact a capital bill and provide the non-federal match this year, as much as $6.1 billion in federal funding could be at risk,” the letter said.

* Herald-Whig

“In the 109th Congress, we worked together in a bipartisan manner to provide Illinois with a 33.4 percent per year increase in federal funding” for highways and transit, Durbin said in a letter to Gov. Rod Blagojevich and the top four legislative leaders.

“We encourage you to enact state legislation to provide the needed state match for the federal transportation funds we secured in 2005. If the state of Illinois does not enact a capital bill and provide the non-federal match this year, as much as $6.1 billion in federal funding could be at risk.”

Durbin notes that the state needs to provide “as much as $1.2 billion to complete all the projects” that require state matching funds.

“We hope we can count on you to enact appropriate legislation that will provide the required state match” and not leave any federal dollars behind, Durbin said.

* And if you think things are crazy in Illinois, go check out the situation in Texas. Bizarre.


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