As state lawmakers leave the November election behind and set their sights on the spring legislative session in Springfield, business leaders across Illinois are lining up against a plan to give health insurance to residents that could cost state employers more than $1.5 billion.
It’s one issue among many that state business leaders are preparing for against the backdrop of Democrat Gov. Rod Blagojevich starting his second term and a legislature that is firmly in the hands of the governor’s party.
“The scenario has changed dramatically,” said Kim Maisch, Illinois director of the National Federation for Independent Business. “Even though the Democrats had control before, they always had to play ball with the Republicans.”
Under the sweeping health care plan recently proposed by a state task force, employers would have to either pay for insurance for employees or pay a fee to the state to cover the uninsured. Despite the benefits of providing insurance to employees, the higher costs would come with a price, says David Vite, president of Illinois Retail Merchants Association.
“It’s a great way to ensure that a lot of people won’t have jobs,” he said.
Blagojevich drew the ire of business groups but won a political victory last fall by pushing through a $1 an hour boost in the minimum wage. It was the second time he has done that since taking office. But the governor has won some points for overseeing a change in worker compensation laws, as well as boosting spending on job training programs.
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Blagojevich spokeswoman Becky Carroll said that success is reflected in Illinois business reporting record profits in 2005. That year, taxable incomes for businesses were at their highest level ever, she said.
She said the governor’s office is reviewing the controversial health care plan, looking for some way to balance the need for health care against potential financial burden on business.
After winning re-election in November, Blagojevich is touting a record of helping cultivate small entrepreneurs, promoting job growth and raising the minimum wage.
In late December he tried to block rising electric rates despite outcries by Ameren and ComEd that such a move would lead to bankruptcy.
“Businesses are going to be shocked by the impact of increased electric costs,” said state Rep. Bob Flider, a Mount Zion Democrat. His district is home to many residents that lived without electricity for days after a major winter storm.
State Sen. Mike Jacobs, D-East Moline, says the absence of a hefty tax increase in the last four years has been good for business.
“The governor has said ‘no’ to an increase in the sales tax, and he’s said ‘no’ to an increase on the income tax,” he said. “That’s a pretty friendly environment.”
The governor made that same pledge in his winning campaign for re-election. But the business lobby wants to kill proposals that would generate state money by taxing sales of services. Now, Illinois residents have to pay sales tax on goods like shampoo, but not on services like haircuts.
Senate President Emil Jones pushed that plan last year as part of a long-running effort to reform school funding. It would raise income taxes and give property tax breaks across the state to close the wealth gap between schools in rich and poor areas.
But business concerns about that proposal echo those of many homeowners. Both fear that while income taxes would go up, property bills won’t go down enough to make up for it. Or they’ll only go down temporarily.
Whatever the issue, state Sen. Brad Burzynski, R-Clare, said business interests should be ready for the oncoming political season.
“We’re probably going to have some major issues in the coming year,” he said.