Blagojevich says voters weren't misled

Illinois Gov. Rod Blagojevich acknowledges applause before delivering the State of the State address, where he addressed health care issues, to a joint session of the General Assembly at the Illinois state Capitol in Springfield, Ill., Wednesday, March 7, 2007. Blagojevich returns to center stage with a public campaign to build support for his health care and education initiatives. (AP Photo/Seth Perlman)

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SPRINGFIELD (AP) - Gov. Rod Blagojevich said Tuesday that Illinois voters shouldn't be disturbed that he's now pushing for the biggest tax increase in state history but never mentioned the possibility during his re-election campaign. In an interview with The Associated Press, Blagojevich said he didn't raise the idea during the campaign because he only began considering a major new business tax the week after the election. Still, he said, the plan shouldn't surprise voters who gave him a second term after four years of making businesses pay more to support state government. "This gross receipts - this tax fairness proposal is very much along the lines of what I did for four years. It's just a bigger, bolder version of it," Blagojevich said. In a 45-minute interview, Blagojevich said he's not sure how much his plan would shrink the gap between the state's richest and poorest schools, but he warned education advocates that his plan is the only way schools will get more money. The Democratic governor also said people are right to be outraged that top officials at the Department of Human Services were being driven to events by high-paid employees. Blagojevich last week called for $7 billion in new business taxes to support a major increase in school spending and a plan to make health insurance available to everyone in the state. About $1 billion of the money would come from a payroll tax on businesses that spend little or nothing on employee insurance. The rest would be generated by a new tax on business transactions. Basically, any business with more than $1 million a year in gross receipts would pay a tax on every transaction, from selling a car to cutting someone's hair. A centerpiece of Blagojevich's re-election campaign was his pledge not to raise taxes. He usually specified income or sales taxes but occasionally he left the promise more open-ended. Blagojevich said he first started considering a gross receipts tax the Monday after the election, when it was suggested by his budget director. Blagojevich said he spent the holidays studying the idea and concluded it was the fairest way to follow through on his campaign promises to improve schools and expand health care. Many big businesses pay little or nothing in income taxes, so this would be a way to make them chip in for state services, he said. It's also a way for the state to get revenue from the growing service sector of the economy. And despite business warnings that it would force companies to cut jobs and raise prices, Blagojevich concluded working families would feel little pain from the tax. "To me, it makes perfect sense," he said. Schools would see a 23 percent increase in state support, or $1.5 billion, which Blagojevich says would cut the gap between schools with lots of money from local property taxes and those in poor areas with almost nothing. Blagojevich said he can't estimate how much the gap - which can be $10,000 or more - might shrink under his plan, partly because it depends on decisions by local schools. Still, he said the new money would move the state much closer to delivering the $6,405 in spending on each pupil that an expert panel suggested in 2005. Blagojevich said he does not plan to reconvene that panel, the Education Funding Advisory Board, to update its spending recommendation, even though he is supposed to do so every two years. The governor said education advocates should back his plan as the only way schools will get more money. "I'll never raise the income tax or sales tax. So if we're going to put money in our schools, this is it. This is the only game in town," he said. Blagojevich repeated his position that expanding health care to all is "a moral imperative." But he insisted that phrase and references to God's intentions are not meant to paint opponents of his plan as evil. Blagojevich also discussed recent revelations by the Chicago Sun-Times that Secretary of Human Services Carol Adams and her chief of staff used state employees as drivers. Adams has defended the practice, saying the aides were more than chauffeurs and helped with policy matters while on the road. "People are right to express outrage at that," he said. "This was clearly a wrong use at the Department of - where? - Human Services. I think that's been addressed." © Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.