Illinois budget aide out to sell Blagojevich tax increase

CHICAGO (AP) - The Blagojevich administration's sell on the biggest tax increase in Illinois history to pay for health care and education continued Monday with one of the governor's top finance aides working a group of civic leaders at a downtown luncheon. With lawmakers in session in Springfield, Blagojevich and his staff have been working hard to win support for a proposed new tax on business transactions they say will bring in $6 billion to help fund the governor's spending plans. Businesses like Chicago's Midway Moving and Storage were anxious to get the details Monday from John Filan, one of Blagojevich's top managers. "That's why I'm here, to learn more about it ... but we're very concerned about it," Midway president Jerry Siegel said after Filan's presentation at the City Club of Chicago. S&C Electric Co.'s financial services director Mike Moses said he already knows what Blagojevich's proposed gross receipts tax would do to his company. "It looks like it's gonna substantially increase our tax liability," Moses said. Moses estimates the new tax would cost the Chicago-based provider of high-voltage electrical switch gear at least double the $500,000 to $750,000 it now pays in corporate income taxes. The state's corporate income tax would be phased out if the gross receipts tax is approved. Blagojevich spokeswoman Becky Carroll said the administration would work with the business community and lawmakers to determine how businesses exempt from the gross receipts tax - those with Illinois sales under $1 million - would be taxed once the corporate income tax was phased out. Critics of Blagojevich's plan have said the new business transaction tax could drive up prices and run businesses out of the state. Blagojevich has framed the tax as an issue of fairness, saying it's a way for big businesses - many of which he says pay little or nothing in corporate income taxes - to contribute to state services. Democratic state Sen. Don Harmon of Oak Park said it's too soon to say how Blagojevich's plan will fare in the Legislature, but he says it's an appropriate time to look at the state's tax system. "The corporate income tax in Illinois was fashioned in the shadow of a mid-20th century manufacturing economy and it may or may not be the best model for the 21st century," Harmon said. The Blagojevich administration said the governor's proposal got backing Monday from more than two dozen Peoria-area individuals and groups who support his plan to offer health insurance to everyone in the state. Filan said the governor is open to other ideas as long as they meet his goals of funding education, offering health care to everyone and relieving the state's pension debt without income or sales tax increases. "We're ready to sit down and hear everyone's ideas and listen to them and see if their ideas work," Filan said.