The candidates for governor are trying to define where their allegiances lie, with Republican George Ryan proposing tax breaks for businesses and Democrat Glenn Poshard opposing such plans as an affront to union workers.
Ryan, the incumbent secretary of state, told a gathering of the state’s top business organizations in Springfield earlier this week that he would favor a new formula for figuring corporate taxes and would back changes to reduce the unemployment tax on business.
Specifically, Ryan said he would support a new corporate tax formula based solely on sales, rather than the existing formula that computes taxes based on sales, payroll and property. Such a plan would cost state and local governments an estimated $95 million in its first year.
Lawmakers last year approved the “single-sales” formula measure, but it was vetoed by Republican Gov. Jim Edgar because of its cost.
Ryan also contended that the unemployment insurance trust fund’s near-$2 billion balance is more than double what is needed and said taxes on business should be cut. Labor unions have vehemently opposed such a move.
In making the proposals before the Illinois Manufacturers’ Association, the Illinois Retail Merchants Association and the Illinois Chamber of Commerce, Ryan referred to the three organizations as “the 800-pound gorilla of the Capitol dome.”
Ryan aides said there was no inconsistency in their candidate’s pledging to hold the line on taxes while proposing tax breaks for business. They said the corporate tax change, alone, would create a 3 percent growth in jobs and add $200 million in new state revenue over three years.
“We consider this a program that will help businesses create jobs. Jobs will be created if business is allowed to reinvest its money,” said Ryan spokesman David Urbanek.
But Poshard, a five-term congressman, said the proposals were “another example of Secretary Ryan favoring big business over working families.”
Poshard, who was backed by the state AFL-CIO in the March primary, said it was wrong to cut business taxes into the jobless benefit trust fund because “an economic downturn could wipe the fund out and create a very dangerous situation.”
In other political news, Democratic secretary of state candidate Jesse White said he opposed GOP rival Al Salvi’s plan to eliminate front license plates. White said law-enforcement supports front and rear plates. But Salvi has said eliminating the front plate would save the state money.
