On Wednesday, Governor Rauner (R-Winnetka and Springfield) delivers his budget message to the General Assembly and the people of Illinois. Will he take advantage of the opportunity to lead by proposing detailed, significant spending cuts, pro-economic growth reforms and new revenue that forms the basis of IL Fiscal Year 2017 and Fiscal Year 2018 balanced budgets.
--Will Gov. Rauner Seize the Day this Wednesday?
If not the Governor, who? If not now, when? Arguably, there is a consensus among the State’s citizens for real pro-growth reforms, significant spending cuts, new revenue and a truly balanced budget for the remainder of FY 2017. Carpe Diem should become the motto of the day. Will it?
To learn about some examples of true reforms that might be significant enough to start attracting, right now, businesses and jobs to Illinois, let’s go to the Illinois Chamber of Commerce. Todd Maisch, the Chamber’s President and CEO, told me two weeks ago about some of the reform proposals that he has been touting for the last year.
Presumably, some of the IL Chamber of Commerce’s ideas have reached the Governor. Yet, I haven’t heard the Governor say, “By golly, I will take up the charge. I will lead. I will govern. I will propose the Chamber’s pro-growth, pro-job reforms.” Not yet, that is.
Perhaps this Wednesday, the Governor will Carpe Diem, with respect to these and other significant budget proposals and reforms. Take a listen to Todd Maisch. below.
Jeff Berkowitz: So, as we have discussed, if the workers comp. bill in the Cullerton-Radogno package is not much (no change in the Causation standard) and the pension bill is a big question mark (as to constitutionality), does the two year property tax freeze mean anything to you?
--Fixing the State House property tax freeze bill
Todd Maisch: Property tax freeze is very important…[Maisch clarified that the political will in both parties would form around this bill the most among the twelve bills currently in the package]…the biggest thing here is that there are a lots of exemptions and loopholes to the freeze… people are going to think [based on the political hype] that their property tax bill is frozen but it is still going to go up year after year [due to exemptions and exceptions in the State House bill] even though their tax is supposed to be frozen [Ed. Note: The Illinois Policy Institute has a tax freeze proposal that appears to omit most of the State House’s proposed exemptions and loopholes and makes any local tax increase that circumvents the freezes contingent on a 2/3 referendum vote approval].
Berkowitz: So, are you asking for any new reforms that aren’t in the Cullerton-Radogno package?
--Pro Growth Tax Incentives that could separate IL from the pack
Maisch: We’ve been talking about this for over a year…if you are going to have a conversation about raising tax rates… you should also have a conversation about pro-growth tax incentives specifically geared toward the businesses that create the vast majority of jobs in IL and the nation, and that’s small and medium sized businesses.
Maisch (Cont.): So we’re developing initiatives that would allow smaller businesses to immediately expense or get a bonus depreciation on the capital investment they put in their business. We think that incents investments in concrete assets that would help them build their business. It’s unique, it would be above and beyond what other states do. Illinois needs something that really is distinctive, that shows, “Hey, we are willing to go above and beyond for our small businesses to help them create jobs.”
Berkowitz: So, you are talking about rapid or accelerated depreciation?
Maisch: Accelerated depreciation has been out there. But, the most accelerated depreciation you can have is immediate expensing. That means that the year you buy that delivery truck, you write off the entire expense.
Berkowitz: So, instead of 10% per year depreciation spread over ten years, you get a gigantic boost in one year, 100% depreciation in the first year of your investment?
Maisch: You get all of your tax savings in your first year.
Berkowitz: Cool, so, you are looking for something like that in the Cullerton-Radogno package that would allow you to go to companies outside the state to attract business to Illinois by saying to them: “We have something to help you expand that no other state has. This is really different.” Am I getting that right?
Berkowitz: You looking for anything else in the Cullerton-Radogno package?
--Three main reforms for this year
Maisch: There are a lot of other reforms we would like to see, but that would be in a second bite of the apple, such as tort reform… But, if can get those three main reforms right now [meaningful worker’s comp reform (which is not currently in the Grand Bargain package), an improved property tax freeze bill and pro-growth tax incentives for small and medium-sized businesses], I think that is what we can do this year and we’ll come back later for more.
Todd Maisch, IL Chamber of Commerce President and CEO, interviewed by Jeff Berkowitz after the Fueling America's Economic Growth Summit, sponsored by the U. S. and Illinois Chambers of Commerce, in the Chicago Loop on January 27, 2017
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