SPRINGFIELD — Despite a pile of unpaid bills that could top $34 billion in five years, Gov. Pat Quinn outlined a plan Wednesday to boost spending on new programs in the coming year.
Along with unveiling a new tax break for parents, the Democrat from Chicago offered plans for school technology improvements, assistance for struggling homeowners and a veterans hiring program during his annual State of the State speech.
“Like all of you, I recognize the severity of our fiscal situation,” Quinn said.
But, he added, “Cuts alone will not get us to a better budget.”
His proposals, which would require action by the House and Senate, brought catcalls from Republicans and some Democrats, who say the new programs could cost an estimated $500 million.
“How do you call for more programs when you’re broke?” asked state Rep. Bill Mitchell, R-Forsyth.
“I don’t think it dealt a lot with reality,” added state Sen. Mike Jacobs, D-East Moline. “I’m just a wee bit concerned that we’re broke.”
Quinn said the state shouldn’t go into retreat.
“Now is not the time to pull back, to abandon our children, our parents and the unemployed among us,” Quinn said.
In the 34-minute address, Quinn told lawmakers he wants to boost spending on early childhood education and increase spending on scholarships for low-income college students. He also wants to upgrade public school classrooms to 21st-century standards and let businesses reduce their income tax bills by up to $5,000 if they hire an unemployed veteran.
He also wants 60 percent of adults to attend college by 2025, up from about 43 percent. And he called for the abolition of a tax on natural gas in Illinois, potentially saving consumers money.
Quinn also announced a $6 million statewide competition to build high-speed internet access in neighborhoods across the state and touted the formation of two task forces to investigate ways to bolster job growth. Local governments would get money to upgrade water and sewer lines.
“We’re going to continue to think big in Illinois,” Quinn said.
Business groups such as the Illinois Chamber of Commerce and the Illinois Manufacturers’ Association applauded the governor’s focus on job growth.
“Developing carefully crafted programs to address further improvements in workers compensation, tax incentives and educational reforms would provide the fastest route to economic recovery,” manufacturers’ association President Greg Baise said.
Quinn did not offer details about his plans. Aides said those likely will be made available when the governor delivers his annual budget speech Feb. 22.
Lawmakers said they wanted more information about the initiatives.
“I look forward to hearing how we can fund these important priorities within a balanced budget,” said Senate President John Cullerton, D-Chicago.
“Not once did we hear how we’re going to pay for any of the programs,” said state Sen. Bill Brady, R-Bloomington. “This doesn’t deal with paying bills. This reminds of Groundhog Day all over again.”
Quinn is expected to continue highlighting Illinois’ business climate in the coming weeks. He plans a stop Thursday in Belvidere to be on hand for a formal announcement about the addition of 1,600 jobs at a Chrysler plant that has been tapped to build the Dodge Dart.
Quinn: Illinois cutting costs, repairing roads, offering tax relief
The Associated Press at 2:30 p.m.
SPRINGFIELD, Ill. -- Gov. Pat Quinn insisted Wednesday that Illinois is ``moving forward'' by cutting business costs, repairing roads and bridges, and offering tax relief to the neediest. He proposed modest new programs to help create jobs and provided no details about how Illinois should tackle financial problems that threaten to overwhelm state government.
Taxes played a major role in the 34-minute State of the State speech, with the governor calling for an end to Illinois' tax on natural gas, the creation of a new tax credit for parents with children, which he said will save $100 a year for the average family of four, and the expansion of an existing tax credit for companies that hire unemployed veterans.
In his speech, Quinn also set a goal of higher education for 60 percent of adults by 2025.
He said Illinois is a better place to do business today, despite frequent complaints about taxes, regulations and other costs. By overhauling workers' compensation, lowering unemployment insurance costs and improving roads and bridges, the state has improved the business climate, Quinn said.
Republicans quickly criticized the speech, saying Quinn shouldn't be calling for tax breaks when the state is deep in the red.
Quinn unveiled the tax cut proposals as part of what he called ``the Illinois Jobs Agenda for 2012.'' He said that ending the natural gas utility tax would make Illinois the only one state without one in the Midwest, and would help businesses and families alike.
``This tax is an unfair, regressive tax that is not based on the ability to pay,'' Quinn said. ``By abolishing it entirely, we can provide targeted tax relief to both consumers and businesses. Illinois will be the only state in the Midwest without a natural gas utility tax on manufacturers, retailers and everyday families.''
Education reform was emphasized in the speech. Quinn said he wants to boost the number of adults who get college degrees or career certificates, and suggested setting a goal of having 60 percent of adults getting that training by 2025. Today, he said, only 43 percent are finishing some sort of post-high school education. Quinn asked lawmakers to spend more money on college scholarships, but he did not propose a specific figure.
In the continuing fallout from the mortgage crisis, Quinn intends to help struggling homeowners find resources to avoid foreclosure, including setting up an ``Illinois Foreclosure Prevention Network.'' He said it will connect families with legal assistance, mortgage relief and other tools that could help them keep their homes, but didn't offer specifics on how it would work or how much it'd cost.
Quinn also said he'll soon announce a plan to make use of vacant property.
Wednesday's speech was light on Illinois' budget problems, though Quinn called for reforming government pensions and the Medicaid health care program. He didn't offer any hint of how he wants to do it, and painful details on the state's bleak finances will wait until his budget proposal is unveiled on Feb. 22.
Quinn also said any pension changes must be ``meaningful, constitutional and fair to employees.'' A major question in Springfield is whether it would be constitutional to reduce benefits for current government workers.
He also took a swipe at other states by saying Illinois still believes in the right of workers to organize. Indiana is on the verge of passing a ``right to work'' law that bars unions from requiring non-members to pay fees for representation.
Quinn did not address the income tax increase approved a year ago, which critics say has been a burden on Illinois businesses.
Exports are a growing part of Illinois' economic well-being, and in an effort to grow the state's exports, Quinn said he is forming an advisory council, to be headed by Navistar CEO Dan Ustian. Its goal will be to double exports by 2014. Quinn is also planning a trade mission to Brazil, which he says is the state's fifth-largest trading partner.
He introduced the idea of tax incentives to create jobs for veterans. He proposed letting businesses reduce their income tax bills by up to $5,000 if they hire an unemployed veteran. The plan also calls for giving businesses a credit equal to 20 percent of the wages they pay to a veteran, up to a maximum credit of $5,000. Currently, Illinois offers a credit of 10 percent, up to a maximum of $1,200.
It wasn't clear how much the tax measures might cost the state, and Quinn didn't say how he'd pay for the tax cuts.
During an appearance Tuesday, though, the governor said, ``You can't just cut your way to a better budget. We have to make cuts, there's no doubt about it.
``We also have to build and grow our economy.''
Other state officials expressed skepticism. Illinois Democrats took the painful step of raising income taxes a year ago and last fall softened that blow with an array of breaks for businesses and families. More tinkering with taxes raises questions for some.
``We would be most interested in hearing how that could be paid for, given our current fiscal condition,'' said Rikeesha Phelon, spokeswoman for Senate President John Cullerton, D-Chicago.
Rep. John Bradley, a Marion Democrat who chairs the House Revenue Committee, expressed similar concerns. He said the focus should be on broad tax reform instead of scattered new credits.
Quinn called for the creation of a council of business leaders to come up with a plan to double Illinois exports by 2014, the administration said, confirming news first reported by Crain's Chicago Business.
Quinn's State of the State address follows a dire report earlier this week that said Illinois' backlog of unpaid bills could nearly quadruple - from $9.2 billion to $34.8 billion - over the next five years unless officials take action. The Civic Federation's report predicts pension and health costs will continue to climb while revenues will drop when the state's temporary income tax increase expires.
Quinn's tax proposals aren't likely to carry high price tags.
The Revenue Department said a smaller version of the veteran-hiring credit has rarely been used. Only 95 taxpayers claimed the credit, for a total cost to the state of $79,543, in the most recent year for which data is available. That was 2008-09, when the credit was 5 percent of wages, up to a maximum of $600, the department said.
To underline his interest in jobs, Quinn spent the day before his speech discussing two startup companies that are receiving money from a state venture capital fund that's part of a $78 million program called Advantage Illinois. And the day after the speech, he's expected to be in Belvidere for the announcement of hundreds of new jobs at a Chrysler plant where the new Dodge Dart will be built.
Quinn: Reforms make Illinois better for business
The Associated Press at 12:26 p.m.
SPRINGFIELD, Ill. -- Gov. Pat Quinn says Illinois is a better place to do business today, despite frequent complaints about taxes, regulation and other costs.
The Democratic governor says Illinois has overhauled workers' compensation, lowered unemployment insurance costs and improved roads and bridges. All that and more has improved the business climate, Quinn said.
He did not address the income tax increase approved a year ago. Critics say it has been a burden on Illinois businesses.
Quinn also took a swipe at Indiana by saying Illinois still believes in the right of workers to organize. Indiana is on the verge of passing a ``right to work'' law that bars unions from requiring non-members to pay fees for representation.