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Gov. Rod Blagojevich is proposing a massive infusion
of cash for public schools, but whether his proposal will mean relief for
property owners is unclear. Blagojevich briefly mentioned property taxes during
his annual budget address at the Statehouse last week but said not a word
about whether his spending plan would provide any direct property-tax
relief. However, in an exclusive interview just after the
speech, the governor said he’d back the idea — if the Rev.
James Meeks, an influential member of the state Senate, demanded it. Aides to the governor have said that the large amount
of money Blagojevich wants to give to K-12 schools ($1.5 billion in the
first year and about $3 billion in each of the next three years) would help
slow the rise of property taxes all over the state. Senate President Emil Jones agrees with that logic.
After the governor’s address, Jones told reporters that the huge
“infusion of money,” generated from a hike in the
gross-receipts tax, will mean “there will be no need to run to the
property taxes.”
However, Jones says, addressing the inequities of the
property-tax system may have to wait. “I don’t know how we can adequately
address the property-tax issue so it would be fair,” Jones said,
adding, “I’d rather see all of the money go to school
reform.”
Jones then said he wouldn’t call Meeks’
tax-swap proposal for a vote. Meeks wants an income-tax increase in
exchange for property-tax rollbacks. Meeks wandered into the press conference shortly
thereafter, and I asked him whether the fact that Jones refused to call his
bill meant that he would have to work against the governor’s gross
receipts tax. Before that would happen, Meeks said, he would try to
persuade the governor to incorporate some sort of property-tax relief into
his legislative package. Meeks, you may recall, dropped out of the
governor’s race after Blagojevich promised him lots more money for
schools [see Mick Dumke, “The church of clout,” Feb. 1]. When told of Meeks’ statement, Blagojevich was
quick to agree to the demand. “Absolutely. That is the type of
constructive input that we are looking for,” he told me during an
interview in his Statehouse office. “We discussed whether we should maybe be a
little less ambitious with the school funding and provide property-tax
relief,” Blagojevich explained. “We netted out on more for
schools that would naturally relieve the pressure on local governments. But
if Rev. Meeks and others are interested in putting a
property-tax-relief component in there, count me in.”
Meeks said later that he had spoken with Blagojevich
after my interview and that the governor had also told him that he would
support property-tax relief during the spring session. Meeks
indicated, however, that he would be holding out for a significant relief
package. The turnabout is important because for years
property-tax rollbacks have been an integral part of proposals
for education-funding reform. Quite a few business groups, particu-larly in
south suburban Cook County, where property taxes have skyrocketed as the
industrial base has evaporated, have pushed hard for
the concept. Because many businesses don’t pay much or any corporate
income tax, they don’t care so much about increasing that tax as long
as their property taxes are reduced. The switch is also important because one of the
biggest public complaints about the governor’s proposals —
besides the big tax hit faced by big business — was the lack of
property-tax relief.
If Meeks does indeed abandon his long-sought
income-tax hike, the “alternative track” that has been quietly
developing in the Illinois House to counter the governor’s
gross-receipts tax on business would be seriously undermined. Meeks has
worked closely with the House people all year, saying as recently as
the day before the governor’s speech that he would be siding with
House Speaker Michael Madigan against the governor. Such a change would
upset the apple cart in a big way and might force opponents of the
gross-receipts tax to go back to the drawing board. Blagojevich’s quick change of heart is also
important because the vote margin in the Senate for the governor’s
proposed gross-receipts tax will likely be razor-thin, so any extra votes
he can pick up will be extremely important.
Rich Miller publishes Capitol
Fax, a daily political newsletter. He can be
reached at capitolfax.blogspot.com.
This article appears in Mar 8-14, 2007.
