By GARY ADKINS Constitutional amendments on corporate tax OF THE MORE than 70 separate proposals before the legislature to amend the 1970 state Constitution, only two passed, and both of them would extend the corporate personal property tax due to expire at the end of this year. Each of the proposals will now be on the ballot for voter approval or rejection in November. They are: H.J.R. 21, sponsored by Rep. Edward McBroom (R., Kankakee), and H.J.R. 47, by Rep. Daniel M. Pierce (D., Highland Park). The two measures are almost identical and would allow the legislature to scrap the corporate tax anytime, so long as they replace it with a tax on similar interests. The 1970 Constitution gave legislators until 1979 to replace the tax, but required that a replacement must be imposed "solely on those classes relieved of the burden of paying ad valorem personal property taxes" (Article IX, sec. 5 (c)). Only one replacement tax proposal was considered, and legislators found the issue too complex for an immediate solution. They saw an extension of the present tax as a good intermediate step to prevent the loss of up to $500 million in state revenues the tax brings in for education and county services. Doug Whitley, executive vice president of the Illinois Taxpayers Federation, and Bill Dart, chief lobbyist of the Illinois Manufacturers' Association, said their groups favor an extension of the tax. They testified in committee that the deadline mandating abolishment of the tax should simply be repealed. The only replacement tax proposed would have put a 1 1/2 to 2 1/2 per cent surcharge on taxes paid on corporate income, partnerships, associations, estates and trusts. This bill, H.B. 2418, was sponsored by the House Revenue Committee and backed by the Illinois Retail Merchants Association and U.S. Steel Corporation. Corporations now pay a 4 per cent tax on their income. According to Orville V. Bergren, president of the Illinois Manufacturers' Association, a replacement tax could have had an unfair effect since many assessors have recently transferred classification of industrial machinery from personal property to real property tax rolls. Bergren says this was done in anticipation of the repeal of the present corporate tax. "Thus, the repeal of the persona] property tax would provide much less relief to some manufacturers than formerly; the substitution of another tax could result, in effect, in paying double." Bergren said that there was little agreement among business interests as to the best replacement package for the tax. "The [committee] bill . . . promised to ease the average tax burden for retailers and increases it for manufacturers," Bergren said. H.J.R. 21 passed the House 134-21 May 2, and the Senate 53-0 May 5. H.J.R. 47 passed the House 117-26 May 2, and the Senate 51-0 May 4. Aside from the tax amendments which passed, there was an inordinate amount of time spent by the legislature in April and early May on consideration of constitutional amendments that eventually failed. Elected superintendent Of these losers, the one proposal that came closest to getting on the ballot was the plan to dump present superintendent of education, Joseph M. Cronin. He had been heavily criticized by the media for frequent out-of-state air travel, extravagance and his $53,000 a year salary (which is more than the governor makes). What upset lawmakers most about Cronin was that he is not responsible to anyone politically. This is especially galling now, when he is at the forefront of a plan to desegregate Chicago's giant school system. "The whole thing is simply related to the question of busing for racial balance," said Rep. Jesse D. Madison (D., Chicago). Samuel W. Witwer, president of the constitutional convention that drafted the 1970 state Constitution, says he was "very unhappy to see us try to go back to an elective superintendent [of schools]." Both the House and Senate approved their own versions of such amendments. A final vote on one of the Senate proposals fell just ten votes short of House approval May 4. S.J.R. 31 lost by a vote of 97-68. Appointed judges A third constitutional amendment would have done away with the nomination and election of judges as candidate of political parties. Instead, applicants would have been screened by nonpartisan nominating panels and appointed by the governor. The resolution (H.J.R.1), sponsored by Rep. Jacob J. Wolf (R., Chicago), was on third reading on the House floor May 2, but failed 84-75. All constitutional amendments had to be passed by May 7 by three-fifths margins of both houses of the legislature to get on the November ballot. This was due to a constitutional requirement (Article XIV, sec. 2 (a)). Another idea already beaten would have placed a 7 per cent ceiling on the amount that personal income could be taxed by the state. H.J.R. 22, sponsored by Rep. Donald L. Totten (R., Hoffman Estates) was beaten 22-33 April 27 in the Senate after it passed the House 115-45 last November. Gov. James R. Thompson reportedly lobbied against the resolution fearing it would handcuff state 2/June 1978/Illinois Issues government. Sen. Mark Q. Rhoads (R., Western Springs) accused Thompson of behind the scenes "subterfuge and guile in an effort to scuttle this[constitutional] amendment." "There is nothing worse than an elected official who runs on a platform of trying to control the size of government, and then does everything in his power to defeat meaningful legislative reform aimed in that direction," Rhoads said. The governor's top budget advisor Robert Mandeville testified in committee against the tax limit resolution, saying it would "straitjacket" state finances. Gov. Thompson's Democratic opponent Comptroller Michael J. Bakalis opposed the so-called "7 per cent solution," as did both major Chicago newspapers and most Chicago Democrats in the Senate. Supporters of the defeated bill said it was a straightforward solution to a simple problem. "This is the only time in the 20 years that I've been here, that we've had a chance to do something constructive for the taxpayers," said Sen. John A. Graham (R., Barrington). Witwer's opinion This is the first session of the legislature to consider amendments to the state Constitution of 1970. Witwer, who is sometimes called the "father of the new constitution," says he is not surprised by the spate of amendments offered. "This is what you expect of any new constitution," says Witwer. "Under the old constitution there were no meaningful amendments offered for over 50 years. I'm in favor of the amendment process .... When you get a constitution as broad and sweeping as this one was in the changes it made, you expect some dissatisfaction." Witwer thinks "the great failure" of the 1970 Constitution was when voters failed to ratify the provision on merit selection of judges. June 1978/Illinois Issues/7
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