Quinn pitches tax relief for families, businesses that hire vets; more college aid

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Quinn

Updated: February 1, 2012 9:42PM

SPRINGFIELD — Touting a jobs platform, Gov. Pat Quinn pushed modest tax relief for families and businesses that hire veterans, an end to the state’s natural gas tax, Medicaid and pension reforms and more spending on college grants in a spartan State of the State speech Wednesday overshadowed by the gloom and doom of Illinois’ crushing financial condition.

“We all know that the economic storm is far from over,” Quinn told a joint session of the General Assembly. “While we have downsized Illinois government more than ever before, we continue to face very difficult decisions to restore financial stability to our state.” Quinn’s second State of the State address came as he enters the mid-point of his first elected term as governor, bogged down by a worsening state fiscal picture that the 2011 income tax hike he pushed through has done little to improve.

“We must always remember that strong economic growth is essential to resolving our fiscal challenges,” the governor said. “Cuts alone will not get us to a better budget. We must build and grow our Illinois economy like never before to keep Illinois moving forward.”

In his speech, the governor facing low approval ratings laid out an array of feel-good ideas whose shelf life is dictated entirely by the harsh reality of Illinois’ nearly empty treasury and a state Legislature more focused upon the March primaries.

Quinn proposed raising a child tax credit so that a family of four could see $100 in tax savings, a proposal that drew silence from lawmakers in the audience.

“This targeted tax relief will stimulate consumer demand, which is 70 percent of our economy,” he said. “And it will create jobs for our local merchants.”

The governor also pushed a tax credit for businesses to cut their state income tax burden by up to $5,000 for each veteran they hire. That credit now stands at $1,200 per veteran.

He proposed ending the state’s natural gas utility tax, a revenue source that brings the state $207 million annually that he called an “unfair, regressive tax.

“By abolishing it entirely, we can provide targeted tax relief to both consumers and businesses,” Quinn said of the natural-gas tax.

On education, the governor called for raising the minimum attendance age for high-school students to 18, as President Barack Obama has proposed, and boosting spending on the perennially cash-strapped Monetary Assistance Program that provides grants of up to $4,968 to low-income college students.

“While nearly 150,000 Illinois students received state MAP scholarships last year to attend college, just as many qualified applicants were denied because of lack of funding,” Quinn said, urging lawmakers to approve “significant investment in more state MAP scholarships.”

On the budget side, the governor paid brief deference to the two largest fiscal elephants in the room: sharply escalating health-care costs for the poor and retirement benefits for government workers.

“Suffice it to say, we must have Medicaid reform and public pension reform in the coming year,” he said.

But with all of those ideas, Quinn steered clear of offering up many financial specifics, which likely will emerge when the governor delivers a follow-up budget address on Feb. 22.

The Republican narrative with Quinn’s State of the State speech was rooted in the dysfunctional way government has been run under Quinn and Democrats for nearly a decade and in concerns that the majority party will try to make the temporary, 67-percent income tax hike permanent when it expires in 2014.

State Treasurer Dan Rutherford, a Republican widely believed to be harboring 2014 gubernatorial aspirations, described the financial state of Illinois under Democrats as “at best dismal.” While not criticizing the tax-cut ideas the governor brought to the table Wednesday, Rutherford faulted the governor for a hodgepodge tax policy.

“The idea of tax credits for this group or others, I don’t want to diminish that. But we’ve seen one-off efforts take place … that continue to show this income-tax increase wasn’t done in a thoughtful process,” Rutherford said.

“One off for CME, one off for Sears, one off for veterans. It’s like playing whack-a-mole, where it pops up and you whack it. Then it pops up somewhere else, and you whack it again. We saw that with a couple of companies. But that’s not the way you have tax policy in this state,” Rutherford said.

Quinn’s speech was met with silence from House Speaker Michael Madigan (D-Chicago).

The governor faced outright hostility before his speech from one member of his own party, who condemned Quinn for his slow response in rooting out widespread corruption within the state child-welfare agency, the Department of Children and Family Services.

Twenty minutes before the governor was scheduled to appear in the House chambers, Rep. Jack Franks (D-Marengo) stood and ripped him for not firing former DCFS director Erwin McEwen last May when it was apparent he was not cooperating with an inspector general probe of contract fraud and apparent ghost-payrolling in his department. McEwen left his job last September

“I don’t know why the governor didn’t tell the General Assembly the truth,” Franks yelled to his colleagues in an unusual breach of speech-day protocol. “And I want to know why the governor tried to sweep under the rug corruption within his administration.”

Quinn spokeswoman Brooke Anderson declined to comment on the angry criticism from Franks, who led a hearing last week on the DCFS scandal that involved contractor Diversified Behavioral Comprehensive Care.

“We’re focused on the State of the State right now,” she said.