Legislative Action By GARY ADKINS It's Thompson's move on tax relief GIVEN an election year and an incipient tax revolt, the General Assembly responded with characteristic caution. Lawmakers adopted relief plans on income, real property and manufacturing equipment taxes, held down general revenue fund spending to within shouting distance ($42 million) of Gov. James R. Thompson's moderate proposals. Generally, they "didn't make no waves." Such relatively extreme or controversial measures as off-track betting, ERA, ethics reform, officials' pay increases, constitutional tax limitation and major changes in the unemployment compensation law were rejected in the highly political six-month session that ended July l. Taking up the tax Tax relief was the center of interest after the passage of the California Proposition 13 (see "State of the State"). An array of well-considered short-term approaches were agreed to, none of which were nearly so drastic as Proposition 13. The two most important were H.B. 3279, sponsored by Rep. Daniel M. Pierce (D., Highland Park), which would give rebates to taxpayers who earn $25,000 or less but pay more than 3.5 per cent of income in property taxes, and S.B. 1785, by Senate President Thomas C. Hynes (D., Chicago), which gives a $1,000 exemption on increases in assessed valuation of property. H.B. 3279 passed the House 113-40 May 26, and the Senate 32-22 June 26. S.B. 1785 passed the House 130-29 June 23, and the Senate 53-3 June 29. Gov. Thompson has consistently opposed the rebate under H.B. 3279. But Thompson's Democratic gubernatorial opponent, Comptroller Michael J. Bakalis has embraced the plan ever since Jarvis-Gann passed in California. Thompson's Bureau of the Budget estimates the cost of H.B. 3279 will be over $100 million the first year and over $350 million annually when fully implemented. Bakalis and other supporters say it will cost $33 million the first year and $114 million by the fourth year. Thompson is more likely to sign Hynes' $1,000 exemption bill on home improvement or repair since it will not reduce state revenues. Thompson has the option of using an amendatory veto on the bill to create less costly relief, vetoing it outright or signing it. Or he might simply let it sit on his desk for 60 days without his signature, in which case it would become law automatically. It is a political conundrum, but if Thompson vetoes the bill he may have yet another option — he could call a special session to deal with tax reform, presumably to enact the advice of his tax study panel. Other tax reform Also before the governor is a plan to combat inflation with state income tax relief. H.B. 2695, which passed the Senate 48-7 June 28 allows the personal exemption to rise with the inflation rate. A $1,000 personal tax exemption has been in effect since Illinois adopted the 2.5 per cent income tax in 1969, but the real dollar value of the exemption has continued to dwindle. Rep. Donald L. Totten (R., Schaumburg) sponsored an amendment in the final week of the session that essentially rewrote H.B. 2695. The House concurred with the Senate amendment 156-14 June 29. But, Totten could not even get the House to consider a redraft of his defeated Constitutional resolution to tie state spending to personal income and limit property tax increases to the inflation rate. Political considerations were blamed by Totten, but Democrats said it was too late to get the proposal on the ballot anyway. Other forms of tax relief proposed include an expansion of the senior citizens' circuit breaker rebate program sent to the governor in separate House and Senate bills. H.B. 2707, sponsored by Rep. Edmund E. Kornowicz (D., Chicago), passed the House 132-14 June 28, and the Senate 51-0 June 24. S.B. 1617, the bill backed by Gov. Thompson and sponsored by Sen. John A. Davidson (R., Springfield), passed the Senate 55-0 May 26, and got through the House 162-1 June 27. Both bills increase the qualifying ceiling up to $15,000 a year per household (now at $10,000). Both also raise the maximum grant to $650 (now $650 less 5 per cent of household income). Although Gov. Thompson supports circuit breaker expansion, he may want to change the form with an amendatory veto, since he has budgeted $6 million for his version, which would have boosted the ceiling to qualify for relief up to $12,000. The bills before him would cost from $11 to $14 million more than he has budgeted. Again, Thompson has a tough political choice. Another kind of tax relief before the governor is aimed at helping industry. The governor, who favors such relief, will have his choice between S.B. 736 and H.B. 3168. Sponsored by Sen. Robert J. Egan (D., Chicago), S.B. 736 passed the Senate 52-2 May 26 and the House 142-19 June 27. Egan sponsored a similar bill last year that Gov. Thompson did not back. H.B. 3168, by Rep. Robert M. Terzich (D., Chicago), passed 57-0 in the Senate June 27 and 142-29 in the House May 25 (for details see April "Legislative Action"). August 1978/Illinois Issues/27
|
|||||||||||||||
