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* This story, albeit slightly “comical” (ahem), illustrates again the growing divide between the public and the General Assembly. As before with Gov. Blagojevich’s declaration that senior citizens ride free on all mass transit systems, his new “economic stimulus” plan will likely be viewed with far more favor out there in Voter Land than it will be in Insider Land…
Governor Rod Blagojevich’s budget address has many small businesses hopeful. The governor is proposing a 20 percent tax break. We visited some businesses to see what the tax break could mean. […]
At Acme Comics, owner Jim Schifeling says a 20 percent cut in taxes is great news.
“That’s wonderful, every dollar in my pocket feels wonderful,” said Schifeling.
And he says it could add up to about $500 at the end of the year, meaning he may be able to pass some of those savings on to his customers.
* And then there’s the legislative reaction…
Lawmakers already are expressing skepticism in the idea. Some say the same struggling economy Blagojevich is trying to help could also cripple the state budget, making the $300 tough to come by.
“I think it’s a questionable deal,” said state Rep. Brandon Phelps, D-Harrisburg.
Phelps has been a pretty reliable Blagojevich vote for the past several months, so that statement is very bad news for the governor and strongly indicates just how unpopular the proposal is in the General Assembly.
* It appears that the Chicagoland Chamber may recognize the danger of flat-out opposing the stimulus plan. President and CEO Jerry Roper was quoted yesterday in the governor’s press release…
“We strongly agree with the Governor that stimulating our economy needs to be the top priority for our state because many small businesses are struggling. The business tax cut, household rebates and capital bill will provide an important boost to bolster business investment and job creation as our country lies on the brink of recession. We can replicate the stimulus package being used at a national level to help keep our economy moving forward,”
* But more Republican and Statehouse-oriented business groups were quick to pan the iidea. Doug Whitley, president and chief executive of the Illinois Chamber of Commerce, had this to say…
“The governor’s rhetoric was gentler toward business in this speech than in the past, but offering a tax cut that only a handful of businesses would qualify for in exchange for a payroll tax increase that every business would have to pay is not going to create jobs or build prosperity in Illinois,”
* And economists are not that thrilled, either…
A University of Illinois economist figures, even if every dollar of the governor’s proposed $900 million economic stimulus is spent in Illinois, it won’t do much to jump-start the state’s $528 billion economy. […]
Jeffrey Brown, a professor of finance at the U of I’s Champaign-Urbana campus, says $300 per kid for families earning between $3,000 and $75,000 a year ‘’will barely register as a blip,'’ if the plan is ultimately approved as part of the new state budget.
In other words, the plan was likely drafted as a political boost instead of an economic boost. Typical, but what do you expect?
* More budget stories, compiled by myself and Kevin…
* Is Blagojevich Leaving Transit Money on the Table?
* Governor’s budget endangers federal transit funds: pols
* Stateville inmates would go to other prisons in budget plan; more here; and here
* Blagojevich pushes budget plan, turns thumbs-down on income tax increase
* Ill. budget plan leaves universities flat
* State may lose billions for better roads
posted by Rich Miller
Friday, Feb 22, 08 @ 11:40 am
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Hey I would sooner attack the plan to give families $300 than I would attack tax breaks for businesses. This proposal may be political but it was better than his GRT last year. I’d say he’s actually doing the right thing for a change something he should have done a long time ago. Now if he can just not act like the legislature is supposed to do what he tells them to do and just use some of that charm we know he has. Well at least when he’s campaigning.
Comment by Levois Friday, Feb 22, 08 @ 11:50 am
What is sad is that the media (editors/news directors) are so dumb and/or lazy that they allow Blaggoaf to get awway with this stuff.
The Chamber of Commerce is right on track and should get lot more attention.
Comment by Sock Puppet Express Friday, Feb 22, 08 @ 12:03 pm
Maybe it will be like the free rides for seniors.
Our wealthy businesspeople and legislators–the ones who make big money off the state…will weep and wail but public sentiment will prevail and the legislators will vote for it as insurance for keeping their place at the ever-overflowing public trough. I would guess that many of the intended recipients have already spent the money in their heads, along with the federal increase. Do even our greediest pols really want to mess with that?
Especially after they gave themselves that huge
raise last year?
Nice to see citizens getting something, anything, back from their government once in a while. A sort of temporary win for the little folks.
And this from somebody who doesn’t even like Blago
and isn’t eligible for either of the rebates. No
populist I.
Comment by Cassandra Friday, Feb 22, 08 @ 12:06 pm
Sock Puppet - why do you hate Blago so much?
The media lets EVERY POLITICIAN in Illinois rob us blind (except the ones they don’t like).
It is not fair to single Blago out.
Comment by Leroy Friday, Feb 22, 08 @ 12:06 pm
The Bean/Kirk press conference regarding federal transit money was portrayed on Channel 7 in Chicago as kind of a bipartisian smackdown of the governor. Blago was asked to respond and was shown waving his arm from a podium and declaring something like “if that’s true and we need to put in more money we’ll put in more money.”
Comment by wordslinger Friday, Feb 22, 08 @ 12:19 pm
If the $300 actually makes it through, and I thought it would go to where I donated it, I would gladly give my $300 for my child back . Running out of pieces and parts to ‘borrow’ off parked equipment to keep what’s left running.
Comment by Princeville Friday, Feb 22, 08 @ 12:38 pm
The 20% will have little or no effect on the State’s economy, for most business I doubt that it will have much of an effect on their decisions on how many workers to employee, expect for a few case where the companies are on the margin. If they were to go through with a payroll tax that would probably have a negative effect on state employment that would probably out weigh any gains from the tax credit.
Comment by RMWStanford Friday, Feb 22, 08 @ 12:43 pm
Blagojevich is proposing a 20% tax cut and a $300 per kid refund.
Blagojevich.
Let’s compare this to his previous SOS outings…Hmmm, quite an improvement won’t you say? In the past he has proposed things that would screw us up royally. In the past he has done things that make you wonder if he was sane. So, considering the source, both these proposals are pretty good, if economically benign.
Is it realistic, no. But again, we’re talking about Blagojevich - so for him, this is pretty good.
Comment by VanillaMan Friday, Feb 22, 08 @ 2:33 pm
Yes - my expectations for this governor are that low.
Comment by VanillaMan Friday, Feb 22, 08 @ 2:35 pm
Well, this is just an outright lie: “but offering a tax cut that only a handful of businesses would qualify for in exchange for a payroll tax increase that every business would have to pay is not going to create jobs or build prosperity in Illinois”
It is more just the opposite -
How many businesses of 25 or more don’t provide healthcare?
How many businesses pay corporate income tax?
Unless Doug Whitley really is making the argument that businesses aren’t paying corporate income tax and aren’t providing healthcare for their employees?
Comment by GoBearsss Friday, Feb 22, 08 @ 2:39 pm
Rich, you hit it on the head. The $300 per child is all about feel-good and pandering, but will have little economic impact. Why not just give everyone who pays State income taxes a rebate (like the federal plan)? Why pay only families with children? Because then he can say he’s helping families.
Comment by Sir Reel Friday, Feb 22, 08 @ 2:47 pm
well it all depends on your opinion of what it will take to get our economy back on track.
If you think that nothing will ever force business to leave beacuse “we are CHICAGOLAND” than keep on forcing higher minimum wages, which leads to higher employer paid wage based taxes, keep workers comp laws that favor the employee and keep a regulatory system in place to stifle inovation.
Ever wonder why toyota built in Indiana and honda is building there as well.
Don’t put all the blame on blago. Its much more than just his game that is crippleing any hope of entrepreneurship from helping our economy get moving
Comment by The Horse Friday, Feb 22, 08 @ 3:09 pm
I wish I could spell/type better
Comment by The Horse Friday, Feb 22, 08 @ 3:10 pm