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State legislator's pass interim budget

Since the Illinois state budget expired June 30, state officials are in a bind with no new fiscal budget approval in sight. As a result, legislators passed a "core services budget" proposed by House Speaker Mike Madigan, D-Chicago.

The interim budget was passed in order to keep state offices open while representatives continue to battle over the fiscal budget. This newly passed budget will be in effect until the end of July in order for the new budget to be completed.

On Tuesday, Gov. Rod Blagojevich held a special meeting with four state legislators. Few topics from this meeting were released, however the legislators with the governor showed general support for an increase in education to $350 million instead of $400 million that Blagojevich had proposed generally.

After the meeting, the governor felt confident that a budget would be in place within a few days. However, Madigan does not feel that assumption is correct.

"He feels they made progress, but there is no way to predict. We all hope that it is finished soon," said Madigan's press secretary Steve Brown.

Blagojevich and Senate President Emil Jones, D-Chicago, are aiming to amplify spending of $1 billion for health care and education. According to Mike Klemens, Illinois Public Information Officer, the funds that would be used to cover this cost would be from raising certain business taxes, cutting government programs that consist of all agencies across the state and using money set aside for special purposes.

"These cuts are equal and non-discriminatory across the board to eliminate the deficit and those cuts help us increase education and Medicaid," said Becky Carroll, a governor's spokeswoman.

The business taxes that would be used to cover the proposed health care and education funds would be from large out-of-state or multi-state corporations that run apart of their business in Illinois.

"The argument was most of the tax burden was of out of state corporation," Klemens said.

The series of business taxation proposals includes the following:

1. 80-20 Companies (Intellectual Property Shifting Loophole) - $40 million 2. Example: If a company has a subsidiary, all separate businesses are to be taxed instead of just the main company.

3. Business/Non-Business - $29 million 4. Example: If a business is in operation in the state of Illinois, it does not have to pay as much tax on depreciation. If the business is sold, it has to be sold as a business and not non-business (based on companies based out of state).

5. Combined Reporting and Lockbox - $21 million 6. Example: If a business has a mortgage with another state and it is paid through an instate bank, that is to be taxed within Illinois.

7. Destination Sale - $24 million 8. Example: If a person was to make a phone call from Cairo to Chicago and it is connected through St. Louis, it could be taxed through Illinois.

9. Federal Government Obligations/Federal Bonds - $19 million 10. Example: It is unlawful for a state to tax federal bonds, but this could tax income that is generated from these bonds.

"There are loopholes that are ruining small business, which is also ruining the schools," Carroll said.

Blagojevich said the special sessions are needed to keep lawmakers near the leaders. This is because they are working a $2.3 billion deficit into a $54 billion budget.

Many of the state representatives are concerned with the amount of money that is being "wasted" in continuing with the sessions. After Wednesday's special session meeting, taxpayers will have spent over $150,000.