Gov. Rod Blagojevich proposed no direct property tax relief during his annual budget address at the Statehouse last week, but afterwards he told me in an exclusive interview that he would back the idea if a crucial Senate Democrat demanded it.
The governor did briefly mention property taxes during his address, and his aides have said the large amount of money he wants to give to K-12 schools ($1.5 billion in the first year, and about $3 billion in each of the next three years) would help slow the rise of property taxes all over Illinois.
Senate President Emil Jones agreed with that logic after the address, telling reporters that the huge "infusion of money" will mean "there will be no need to run to the property taxes."
"I don't know how we can adequately address the property tax issue so it would be fair," Jones said, adding, "I'd rather see all of the money go to school reform." Jones then said he wouldn't call state Sen. James Meeks' tax swap proposal for a vote. Meeks wants an income tax increase in exchange for property tax rollbacks.
Meeks wandered into the press conference shortly thereafter and I asked him if the fact that Jones refused to call his bill meant he would have to work against the governor's gross receipts tax. Before that would happen, Meeks said, he would try to convince the governor to incorporate some sort of property tax relief into his legislative package. Meeks, you may recall, dropped out of the governor's race after Blagojevich promised him lots more money for schools.
When told of Meeks' statement, Gov. Blagojevich was quick to agree to the demand. "Absolutely. That is the type of constructive input that we are looking for," he said during an interview in his Statehouse office.
"We discussed whether we should maybe be a little less ambitious with the school funding and provide property tax relief," Blagojevich explained. "We netted out on more for schools that would naturally relieve the pressure on local governments. But if Rev. Meeks and others are interested in putting a property tax relief component in there, count me in."
Meeks said later that he had spoken with Blagojevich after my interview and the governor also told him he would support property tax relief during the spring session. Meeks indicated, however, that he would be holding out for a significant relief package.
The turnabout is important because property tax rollbacks have been an integral part of education funding reform proposals for years. Quite a few business groups, particularly in south suburban Cook County where property taxes have skyrocketed as the industrial base has evaporated, have pushed hard for the concept. Since many businesses don't pay much or any corporate income tax, they don't care so much about increasing that tax as long as their property taxes are reduced.
The switch is also important because one of the biggest public complaints about the governor's proposals (besides the big tax hit heading towards big business) was the lack of property tax relief. House Republican Leader Tom Cross' sharpest criticism of the governor's address yesterday was all about his failure to include property tax relief in his tax and spend package.
If Meeks does indeed abandon his long-sought income tax hike, the "alternative track" that has been quietly developing in the Illinois House to counter the governor's gross receipts tax on business would be seriously undermined. Sen. Meeks has worked closely with the House people all year, saying as recently as the day before the governor's speech that he would be siding with House Speaker Michael Madigan against the governor. A change like this would upset the apple cart in a big way and might force the gross receipts tax opponents to go back to the drawing board.
Blagojevich's quick change of heart is also important because the vote margin in the Senate for the governor's proposed gross receipts tax will likely be razor-thin, so any extra votes he can pick up with something like property tax relief will be extremely important. Sen. Donne Trotter, the Senate Democrats' top budget expert admitted after the governor's speech that they were "real short" of the votes needed to pass the governor's package and indicated that it might have to be scaled back.
Rich Miller also publishes Capitol Fax, a daily political newsletter, and thecapitolfaxblog.com