Business owners rally against proposed tax

COPLEY NEWS SERVICE SPRINGFIELD - Chris Graue said a new business tax proposed by Gov. Rod Blagojevich will put an end to his plans to relocate and expand his Lincoln car dealership. Tom Hoerr II said he expects people will be buying fewer landscaping supplies from his Greenview Nursery. They were among hundreds of business owners who descended on the Capitol Wednesday to protest Blagojevich's proposed gross-receipts tax on nearly every state business transaction. It would generate more than $7 billion that the governor wants to use to expand education funding and provide access to health insurance for every Illinois resident. The business men and women, though, said the tax will dry up their profits, forcing them to cut back operations and increase prices just to keep even. Graue, owner of Graue Chevrolet, Buick, Pontiac and Cadillac in Lincoln, said he will not relocate his business from Lincoln's north to west side and expand it at the same time. "If the GRT passes, we will not continue with the project," he said. "We generate a large number of dollar sales, but we don't have a lot of (profit) margin. It would take close to 70 percent of our profit at the end of the year. If this passes, there is no way that we'll be able to do this." Hoerr operates nurseries in Springfield, Peoria and other locations. He said the tax essentially will be a double hit to his business. He will have to pay the tax, and he expects his business will be hurt if the tax forces up the price of other consumer products. "Food, lights, clothing are much more important than our products," Hoerr said. "What are you going to cut? You're going to cut our products. It could mean laying off people, cutting benefits, shrinking our business." Matt Dearwester, who runs a grain elevator and feed mill in Golden, said a gross-receipts tax would more than eat up the net income from his two businesses. "I would like for the governor or anyone who supports this measure to tell me how I can survive," Dearwester said. "I don't see any way we can survive if this tax
goes through." The Illinois Chamber of Commerce and National Federation of Independent Business organized Wednesday's rally. Chamber president Doug Whitley said more than 600 people signed up, and he expected others simply showed up. "For business people, that's saying a lot. Most of the time, business folks stay home and tend to their stores and take care of their customers," Whitley said. Since he first proposed the tax, Blagojevich has made some changes to make it more politically palatable, including raising the threshold level where the tax begins from $1 million a year in revenue to $2 million. Whitley, though, said the business community's opposition to a GRT is not negotiable. "We need to kill the GRT, put a stake in the heart of it and bury it in the ground so we can move on to Plan B," he said. Asked what Plan B is, Whitley said, "We are not prepared to talk about" alternatives now. Some business owners who traveled to Springfield Wednesday said they endorse Blagojevich's plan for universal health insurance. They came at the urging of the Campaign for Better Health Care, which is lobbying for Blagojevich's proposal. "As a business owner, I think this health care initiative is wonderful," said Marge Corwin of Rushville, the owner of Always Something New, a gift shop that also sells flowers and coffee and offers tanning services. She said she does not offer health insurance to her lone employee, but could do so under Blagojevich's proposal. Corwin said she also is employed as an outreach worker for an agency she did not want to name because it hasn't taken a stance on the issue. Ed Rockhold, a partner in R3 Technologies, a Galesburg technology firm, said his company does provide health insurance for employees but saw a 35 percent increase in premiums last year. Health insurance costs amount to about $22,000, or 10 percent of the payroll, he said. The company has five full-time employees and one part-time worker who pay half of the cost of premiums. Rockhold and his partners, former employees at the Maytag facility in Galesburg before it closed, support the governor's proposal as a means to contain costs, he said. It would save R3 about $5,000 a year, he said. Neither business is large enough that it would have to pay the gross-receipts tax. Also Wednesday, the Illinois Senate held committee hearings on Blagojevich's tax plan and how it would allow for a $1.5 billion increase in state aid to education next year. School superintendents from Carlinville, Taylorville and Bunker Hill all testified that their districts are under financial pressure and need more state aid. The committee did not vote on the school funding/tax bill Wednesday. Asked when a vote on the bill may occur, Senate President Emil Jones, D-Chicago, said simply, "Soon." Doug Finke can be reached at 217-788-1527 or doug.finke(at)sj-r.com. Dana Heupel can be reached at 217-788-1518 or dana.heupel(at)sj-r.com. REEDM-CNS-SD-04-18-07 1812PST