Gubernatorial candidates agree budget is big problem, differ on fixes

Doug Finke

Day One: This is the first of a two-day series of stories looking at how the candidates for governor would address the state's budget, and part of a bigger series of stories on the major issues facing state government. GateHouse News Service surveyed the campaigns and will provide their answers in stories that run through the end of the month.

There is one issue on which the candidates for Illinois governor agree – the state has monumental budget problems.

What to do about them is another matter.

Many experts believe the national economy is finally inching toward recovery and the election of a governor is still nearly a year away, but none of the candidates for governor believe the state's financial problems will be solved by then.

GateHouse News Service posed a series of questions about state finances to candidates. Here are their responses.

Q. Would you support an income or sales tax increase?

There is unanimity among candidates – depending on party affiliation.

Republican candidates are opposed to general tax increases, like the income or sales tax. The Democrats both support tax increases.

Gov. Pat Quinn continues to support a 50 percent increase in the state income tax, something he floated last spring, but was unable to get through the General Assembly. Quinn uses the word "modest" to describe his proposal. At the same time, Quinn wants to triple the personal exemption. The effect, he said, will be to actually lower tax bills for those making under $60,000 a year.

Hynes wants Illinois to adopt a graduated income tax that will levy higher taxes on incomes above $200,000. Taxes on incomes below $200,000 will not change. Such a plan will require changing the Illinois Constitution, which means it will take longer to impose.

Hynes also wants to begin applying the state sales tax to what he calls "luxury services that are discretionary in nature." He cites examples like tanning services or elective cosmetic surgery. He will also support increasing the cigarette tax by $1 a pack.

The GOP candidates all believe that a general tax increase will be counterproductive.

"A tax increase at this time would be a job killer," said Andy McKenna, former state chairman of the Illinois Republican Party.

Former Attorney General Jim Ryan said the state first needs to come to grips with spending.

"Raising taxes is a way to avoid making those necessary spending decisions or budget reforms," Ryan said.

Some have argued that Illinois has a low income tax rate compared to other states, which means the tax could be increased without putting the state at a competitive disadvantage. That doesn't wash with businessman Adam Andrzejewski, who said the state's "relatively low" income tax rate is offset by other economic factors that put the state at a competitive disadvantage.

DuPage County Board Chairman Robert Schillerstrom said hundreds of tax and fee increases passed since 2002 still have not resulted in a balanced budget. Sen. Kirk Dillard, R-Hinsdale, said an income tax hike should only be a last resort after extensive budget reforms are implemented. He specifically criticized the idea of bringing a graduated income tax to Illinois.

"The state's flat rate income tax is one of Illinois' competitive advantages and should remain in place," Dillard said.

Not raising taxes isn't enough for a couple of candidates. Sen. Bill Brady, R-Bloomington, said any business taxes increased during the term of former Gov. Rod Blagojevich should be repealed. He also wants to eliminate the sales tax on gasoline.

Commentator Dan Proft goes even further. He wants to cut the personal and corporate income tax rates in half.

Q. Are there other ways to raise revenue?

Not all of the Republican candidates closed the door on all revenue options. While Dillard said cuts must come first, he also said that some user fees might have to be raised "from time to time" to adjust for inflation.

Brady said he is open to the state leasing or selling certain assets "if doing so means they would be managed better for the taxpayers." Illinois officials have discussed privatizing the lottery. Brady, though, said he does not want any further gambling expansion and opposes any more casinos.

Proft, too, would sell the lottery, but would structure it so that the state gets the proceeds over many years rather than in a lump sum.

Andrzejewski is open to leasing or selling assets, but only if the proceeds are restricted to paying off state debt, like pensions.

More revenue can be raised by competitively auctioning off new casino licenses and continuing to take surplus funds from restricted state accounts, Hynes said.

Doug Finke can be reached at (217) 788-1527 ordoug.finke@sj-r.com.