Mt. Vernon Register-News

State News

February 4, 2014

GOP Ill. gov. candidates debate taxes, spending

NAPERVILLE — — The four Republicans running for Illinois governor agreed Tuesday the state needs to cut spending and change its tax structure, but differed on how best to do so, with all but one saying they'd consider a new tax on such services as haircuts and landscaping if it meant lowering tax rates overall.

State Sens. Bill Brady and Kirk Dillard, businessman Bruce Rauner and Treasurer Dan Rutherford faced off in a debate that focused heavily on Illinois' struggling economy and how to improve its business climate.

All four candidates said they support allowing a temporary income tax increase approved in 2011 to roll back as scheduled on Jan. 1 — a move they say will make the state friendlier to business and provide much-needed relief to residents. The rollback, which is likely to be the subject of heated debate in the Legislature this year, is expected to reduce state revenue by about $1.6 billion next fiscal year, state officials said Tuesday.

Rutherford, however, repeated his position that scaling back the tax hike may not be immediately possible because he can't anticipate what kind of budget situation he'll inherit if he becomes governor. But the former legislator from Chenoa said he would work with the Democrat-controlled General Assembly to reach consensus on how to reduce spending.

"A governor is not king of the forest," Rutherford said during the Naperville forum, which was sponsored by the Illinois Manufacturers' Association and the Valley Industrial Association. "You cannot go in and command it to be done."

The other candidates offered more specifics about where they'd like to make budget cuts. Brady, who won the 2010 GOP nomination but lost to Gov. Pat Quinn in the general election, noted he supported legislation last year to cut public-employee pensions and eliminate the state's $100 billion unfunded liability. He says that measure — which is being challenged in court by labor unions and retired state employees — could save Illinois $1.3 billion in the first year if it's allowed to take effect.

Rauner, a businessman from Winnetka making his first bid for public office, said he supports replacing public-worker pensions with a 401(k)-style, defined contribution plan he says would create "dramatic savings" within three years. He also said the state should take a tougher stance on rooting out Medicaid fraud, calling the insurance program for the poor and disabled "broken and corrupt and out of control."

Dillard also said Illinois should target Medicaid abuses.

"If you clean up your Medicaid rolls, people who truly need our help will get better help and taxpayers will save billions of dollars," the lawmaker from Hinsdale told reporters afterward.

Dillard and Rauner both said that if elected they would convene a task force of business and other leaders to analyze Illinois' tax structure and recommend changes. They said their reviews would include whether to impose a tax on services, provided it would allow other tax rates to be reduced.

Brady, of Bloomington, said there's "no question" that the state should broaden its tax base to reduce rates. But he said Illinois first must find a way to require out-of-state companies that sell products in Illinois online to pay state taxes. The Illinois Supreme Court last year threw out a law that imposed the so-called "Amazon tax" on some digital sales.

"It's an unfair advantage to out-of-state retailers," Brady said.

But Rutherford called a tax on services "a bad idea."

"When government starts to be able to tax something new, they're going to look for the next thing new after that," he said.

The Republican who wins the nomination in the March 18 primary likely will face Quinn in November. The Chicago Democrat faces a lesser-known challenger, anti-violence activist Tio Hardiman of Hillside, in the primary.

 

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