My syndicated column this week is about Barb Currie’s surprisingly harsh speech to the Taxpayers’ Federation of Illinois.

llinois House Majority Leader Barbara Flynn Currie usually hangs back and lets others make news. Since getting the No. 2 job in the House Democratic caucus in 1997, she hasn’t been known for being way out front on major issues. And as far as I can remember, she’s never once publicly criticized Gov. Rod Blagojevich.

But that all changed last week when Currie gave an important speech to the Taxpayers’ Federation of Illinois blasting the governor, a fellow Democrat. She insisted that she was only speaking for herself, not House Speaker Michael Madigan, but all of Madigan’s top people were well aware of the contents of her address before she delivered it.

Currie’s speech is a must-read for those of us who are fascinated by the slow-motion train wreck that is the 2007 legislative session.

She had a couple of nice things to say, but let’s get to the negativity…

Currie made it crystal clear that the Legislature will not “be rushed into making a mistake from which it could take the state decades to recover.” And she warned the governor to not revert back to his old scapegoating habits from his often-controversial first term.

“If our efforts to spend the time it takes to get it right this time lead him to accuse us of indifference to the suffering of our fellow citizens or to portray us as mere pawns of special interest organizations, he will have done his cause no good,” Currie said, adding, “Proceeding at a deliberate, careful pace is not obstructionism. Taking our time to make sure we understand the details, grasp the implications and make decisions based on facts, not spin, is not obstructionism.” […]

“If he prefers to leverage public policy via press releases, vigils, protest marches, television advertisements and airplane fly-arounds, I don’t think lawmakers will buy,” Currie warned. “Demagoguery will not be well received by most members of the General Assembly.”

I’ve been thinking about this speech off and on for several days, and I’ve concluded that this was the most important part…

Currie seemed to indicate that the gross receipts tax proposed by the governor was too high. She pointed out that corporations would have to pay about $500 million more than they currently do to bring them back up to the same level they were paying in 1980, while directly contrasting that with the governor’s so-called “fairness” plan that raises $6.5 billion a year.

It’s not “fairness” if the big companies are forced to pay many times more than they would be if they were paying all of their corporate income taxes. This is more about a new revenue source than it is about “fairness.”

Meanwhile, Crain’s ran this piece about the governor’s often overlooked 3 percent payroll tax on businesses…

Gov. Rod Blagojevich’s plan to tax businesses’ payrolls to fund half his $2.1-billion health care reform would run afoul of federal law, legal experts say.

Under the plan, employers that spend less than 4% of their payrolls on worker medical benefits would be taxed, a spokeswoman for the governor says.

Lawyers say that approach could violate the 1974 Employee Retirement Income Security Act (ERISA). The federal law dictates how companies structure benefit plans so companies that do business in multiple states don’t have to grapple with a patchwork of local laws. ERISA trumps any state law. […]

Illinois officials say a payroll tax wouldn’t violate federal law because the state wouldn’t be dictating how employers should structure health benefits. The state simply wants companies to pay their share — even reimbursing a worker for out-of-pocket medical costs would count toward the 4% figure, says Bob Greenlee, deputy director of the Office of Management and Budget. […]

But the Maryland appellate court concluded that giving employers the choice between meeting a minimum spending level or paying the state “effectively requires employers . . . to restructure their employee health insurance plans” and is “precisely the regulatory Balkanization that Congress sought to avoid” with ERISA.

Ralph Martire has been pushing for a tax swap forever. Just about all of his columns, speeches, etc. are about the subject. The governor’s gross receipts tax is competing for prominence now, and Martire is dumping all over it…

This is regressive, making low- and middle-income folks pay significantly more in taxes than they do today.

The way to raise revenue while achieving real tax fairness is to focus on income and sales taxes. This works better for two reasons. First, income and sales taxes are imposed only at the final stage of economic activity. Hence, these taxes are far less distortive of economic behavior. It’s also easier to identify who will actually pay what after the tax changes are implemented, which is crucial for creating tax fairness. Once income and sales taxes are assessed, property and other tax relief can be designed to ensure middle- and low-income families really won’t pay more. With the gross receipts tax, that’s not possible.

Comptroller Dan Hynes has several questions about the GRT, which he published as a Sunday Tribune op-ed…

Does the governor’s proposed $6 billion gross receipts tax accomplish the stated goal of tax fairness, or will it result in higher prices for consumers, job losses and businesses leaving Illinois? […]

But if health-care costs escalate, or GRT revenues underperform, will education be left underfunded? […]

Shouldn’t we fix our current Medicaid program before expanding it by $4 billion? […]

Which of his proposals will he cut in order to fund this property tax relief while also balancing the budget?

As I told Capitol Fax readers, Mayor Daley has adjusted his rhetoric somewhat on the governor’s GRT.

“I’m hoping the General Assembly looks at it very carefully and there’s some excellent, excellent points in it,” he said.

Still, he stumbled through the statement, made just prior to Saturday’s St. Patrick’s Day Parade.

“I’m supporting the governor’s plan, not 100, his plan, his concept with regard to funding education,” Daley said.

Clear?

And, finally, downstaters and Chicago legislators aren’t gonna be happy about this one…

Schools in Chicago’s collar counties would be the biggest beneficiaries of Gov. Rod Blagojevich’s plan to boost total per-child spending by more than $800 million next school year, records show.

Districts in DuPage, Kane, Lake, McHenry and Will Counties would get a combined $183 million more in per-pupil state aid if lawmakers approve the governor’s plan–a 28 percent increase over this year.