Quinn’s tax relief would hurt Illinois

When is tax relief not a good idea?

Maybe when the tax is one of the few dependable sources of revenue for a state facing a budget deficit spiraling out of control. And particularly when abolishing the tax would provide only a nominal return to the taxpayers.

During his State of the State address at the Illinois State Capitol in Springfield, Gov. Pat Quinn spoke only briefly about the state’s dire financial condition. Something he talked more about was his idea to end a natural gas utility tax that generates about $160 million in revenue each year, according to the Illinois Department of Revenue.

Quinn, a Democrat, said he believes the gas utility tax should be ended because it hurts low-income consumers and businesses.

But in fact, it’s the state that would be hurt if this revenue source is eliminated.

The Department of Revenue says the tax is figured as a percentage of usage. That means the typical Illinois household pays only about $32 a year for the utility tax, according to rough estimates provided by the Citizens Utility Board.

Not surprisingly, CUB favors the idea and said the savings could be “a significant amount of money for consumers.”

CUB Executive Director David Kolata said, “The more gas you use, the better off it would be.”

But let’s balance that against what is at stake here in the larger picture.

The state of Illinois already is billions of dollars behind on delayed payments to its vendors, including providers of health care and many businesses that have contracts with the state, not to mention the state’s public school districts.

So the question is: What would be a better use of the $160 million? Returning it to ratepayers who might get enough to buy dinner for the family at a nice restaurant, or using it to help pay overdue bills to vendors and businesses that already have provided services to the state in good faith?

Let’s face it. This idea is little more than political pandering to Illinoisans.

The same can be said about the governor’s ideas to institute tax credits for veterans and families with children. Taken together with the elimination of the natural gas utility tax, these initiatives could cost the state a total of $300 million at a time when its unpaid bills are stacking up, hurting hundreds if not thousands of employers throughout the state.