SPRINGFIELD (AP) — Gov. Pat Quinn's latest plan to pay off the state's monstrous bill backlog is targeting income tax incentives that benefit Illinois corporations as a way to raise nearly half-a-billion dollars a year.
But a governor's loophole is often a business executive's job-creator. Business leaders call the plan a tax increase on corporations in a state they say is already woefully inattentive to the needs of employers.
As part of a $62.4 billion budget proposal laid out last week, Quinn proposed temporarily ending three tax breaks that would pump an estimated $454 million into the treasury. The money would go toward making a significant dent in $9 billion in overdue bills owed to providers of goods and services, the governor's aides say.
Quinn told a joint session of the General Assembly that he plans to reduce the $9 billion deficit by 20 percent before the June 2014 end of the upcoming budget year. Assistant budget director Abdon Pallasch said the tax loophole money would be a savings on top of the $2 billion Quinn called for in reducing the overdue bills. That money Quinn plans to wring out of spending throughout the budget and growth in tax revenue.
"It is no time for corporate tax loopholes when the state of Illinois has bills to pay," spokeswoman Brooke Anderson said. "Suspending these loopholes until the backlog is paid down will ensure vendors are paid faster, which is good for the economy and the budget."
But the economy and budget also get a boost when employers are hiring taxpayers and making money, said Todd Maisch, vice president for government affairs for the Illinois Chamber of Commerce.
The elimination of tax loopholes "is just one more way in which Illinois is the leader of the pack of doing things that employers will shake their heads and say, 'When are these guys going to figure it out, that you've got to help us and not continually have an agenda that whacks us on the head?'" Maisch said.