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Key Democrats oppose governor's tax hike plan

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SPRINGFIELD - Democrat Rod Blagojevich's plan to raise taxes on businesses is getting a thumbs-down from top officials within his own party.

State Treasurer Alexi Giannoulias stood with Comptroller Dan Hynes on Wednesday as the comptroller said the state's Medicaid system must be changed before he can support the governor's plans for a $6 billion tax increase.

"Those are all questions and concerns," Hynes said. "An absolute precondition to my support of anything would be fixing the Medicaid program and balancing our budget."

Lt. Gov. Pat Quinn, who has been Blagojevich's running mate in the last two elections, said he is "not a fan" of the governor's plan, which would use the additional tax dollars to finance an expansion of the state's health insurance offerings.

The governor's office downplayed the intra-party fissure, saying there are numerous supporters of the governor's proposal.

Along with the Illinois Hospital Association and the Illinois Federation of Teachers, Blagojevich spokeswoman Abby Ottenhoff said a coalition of black ministers voiced their support for the plan on Tuesday.

Ottenhoff said Quinn's opposition to the governor's proposal isn't a surprise.

"He's been advocating for an income tax increase on people for the last four years. We don't think people should pay more. We just think big corporations should pay their fair share," said Ottenhoff.

"The option on the table - a gross receipts tax - is the most fair and has the least impact on working families and the very people who are struggling to get by," Ottenhoff said.

Hynes said he wants doctors to get their Medicaid payments faster. When doctors treat people on Medicaid, they file for reimbursement from the state. But sometimes that money can be slow in coming.

The administration says it has shortened the payment delays, but Hynes said many doctors aren't accepting Medicaid patients because they don't want to wait as long as six months to be paid by the state for their services.

It may only get worse if the governor's plan to expand health insurance to 1.4 million Illinoisans is approved, Hynes said.

"That is a problem," Hynes said.

The Democratic opposition comes against the backdrop of more than two weeks' worth of criticism from Republicans and business groups about the governor's proposal.

On Wednesday, the Illinois Chamber of Commerce released a study showing that businesses actually pay nearly 50 percent of the tax load in Illinois when local property taxes are taken into account.

The results are meant to raise questions about Blagojevich's assertion that businesses aren't paying their fair share of taxes. Under his plan, the state's business taxes would be restructured, resulting in billions more for health care, schools and employee pensions.

"This report, by the cold, hard facts it reveals, provides a glaring contradiction to the governor's harsh ant-business rhetoric," said chamber president Doug Whitley.

Becky Carroll, a spokeswoman for the governor's budget office said the chamber report is "misleading" because it includes local taxes.

"Those taxes don't contribute a dime towards the costs of state services," Carroll said.

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