State business climate ‘not universally bad’

His approach is different from a freshman colleague, Rep. Mike Smiddy, D-Hillsdale, who represents Whiteside County.

At a forum earlier this week, Smiddy said the state’s business climate wasn’t bad, but that Illinois needed to do a better job to promote itself.

In an interview Friday, Demmer agreed with Smiddy on promoting Illinois, saying the state had an opportunity to grow exports.

But Demmer parted ways with Smiddy on the state’s business climate.

“It’s not universally bad,” the Dixon lawmaker said. “We have some strengths. We have a strong transportation infrastructure.”

At the same time, he said, those doing business with the state see their payments delayed.

“I’ve talked with a heck of a lot of business owners,” Demmer said. “We have better opportunities to make Illinois a business-friendly place. We have some confusing regulations.”

Illinois has $8 billion in unpaid bills. When the state increased its income tax to 5 percent (from 3 percent) in 2011, legislators planned for the new money to go toward paying old bills. Instead, much of it went toward the state’s contributions to public employees’ pensions.

“They said they needed the money desperately,” Demmer said. “We still have the $8 billion in unpaid bills. There is a level of distrust.”

Smiddy said this week that he favored letting the tax increase expire as scheduled in 2015. But he supported letting voters decide on a constitutional amendment that would allow a graduated, or progressive, income tax, meaning that rates increase for higher income levels.

While Smiddy said the state should consider a graduated income tax, he declined to give his position.

Demmer opposes it.

“The state constitution says that we have a flat tax. This is a flat tax state,” he said. “The progressive income tax is a way to raise taxes.”

Like most in his party, Demmer favors letting the tax hike expire.

How will the state make ends meet if it loses that income?

Demmer said tax revenue wouldn’t have to drop when rates fall. The state, he said, can enact “meaningful” workers compensation reform and reduce the burden on small businesses, which would improve the economy and bring in more tax revenue.