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Proposed sales tax holiday for school supplies shelved

Proposed sales tax holiday for school supplies shelved

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SPRINGFIELD - The state's thirst for money has put the brakes on a proposed sales tax holiday for back-to-school purchases.

In his proposed budget, Gov. Pat Quinn called for dropping state sales tax collections on clothes and other school-related supplies for a 10-day span in August.

But, the idea has gone nowhere in the General Assembly, which is busy this week trying to wrap up its action for the spring by a May 31 deadline.

On Tuesday, a spokeswoman for the governor acknowledged he's abandoned the idea.

"While the governor still believes that a sales tax holiday would help working families, at this point he is focusing on other priorities such as balancing the budget and passing robust ethics reform," spokeswoman Marcelyn Love noted in an email.

Lawmakers also said the state can't afford to give up the estimated $50 million that would be lost if parents were given the sales tax break.

"I don't think its going anywhere because we're scrambling to find additional revenue," said state Sen. John Sullivan, D-Rushville. "Any legislation that would actually take additional revenue away is probably not something that's being given a lot of consideration at this point."

The apparent death of the sales tax holiday comes as legislative leaders met with Quinn Tuesday as part of the on-going negotiations over the state's spending plan.

Lawmakers are trying to figure out a way to close a budget gap of up to $12 billion.

Quinn has called for a 50 percent income tax increase, but some lawmakers are balking at that idea.

Senate President John Cullerton, D-Chicago, was unsure whether he could muster the necessary votes to pass an income tax without Republican support.

State Sen. Larry Bomke, R-Springfield, said he was "up in the air" about a tax hike.

"I recognize the devastation we're faced with. But it's very difficult to vote for an income tax increase given the economic times we're faced with," Bomke said.

Lawmakers are considering filling the budget gap by using money earmarked for employee pension funds. Cullerton said Democrats also are considering creating a two-tier pension system that would treat new employees different from current workers and retirees.

There also is speculation lawmakers could approve a budget that carries the state through the first six months of the fiscal year. That would give lawmakers more time to think about raising income taxes.

Some advocates are arguing that a flat 10 percent cut in state spending and increased transparency would be a better way to balance the budget. Grover Norquist, president of Americans for Tax Reform, told reporters that the state's budget crunch comes as spending has continued to rise in recent years.

"Illinois taxpayers have a problem created by politicians," said Norquist. "Step one is don't make the problem worse."

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