Wednesday, March 30, 2011
Legislators Defend Tax Hike But Worry About CAT
Lawmakers who voted for the recent income tax increase are standing by their vote amid rumors that construction equipment giant Caterpillar Corp. may haul its headquarters to another state.
Blame has mostly focused on the personal and corporate tax increases after word got out that Caterpillar's chairman sent a letter to Gov. Pat Quinn, expressing concerns about the state's unfavorable business climate.
State Sen. David Koehler, D-Peoria, defended his vote on the tax hike to help the state dig itself out of debt. "I think that the burden is on all of us now, whether we voted for it or not, whether we are Democrat or Republican, to make this work, and to put our house in order financially," Koehler said. "Having Illinois with a junk bond status doesn't do anybody any good."”
State Rep. Linda Chapa LaVia, D-Aurora, said Caterpillar is a big employer in her district, but she defended her vote on the tax hike to help the state pay its unpaid bills. “You think we are bad right now,” she said. “We’d be extremely worse off, where we would probably be insolvent, we wouldn’t be able to come back out of the hole that we've dug for ourselves.”
Lawmakers in the previous General Assembly passed the 67 percent personal income tax hike in January on the final day of the lame-duck session. The state's corporate income tax rate rose 45.9 percent. Since then, neighboring states have been trying to woo Illinois businesses.
State Sen. Mike Jacobs, D-East Moline, called Caterpillar "a little disingenuous."
"We've spent hundreds of millions of dollars, federal dollars, to put brand new roads into Peoria," Jacobs said. "And the emphasis behind a lot of those roads was to make sure that Caterpillar could get their equipment in and out. And now that we've spent that money, Caterpillar is saying 'Yeah, we're making record profits, but we want more."
Quinn's spokeswoman Brie Callahan said in an email that the governor is willing to meet with businesses in Illinois and work "toward creating a stable fiscal environment" for the state.
You can read Diane's full report at: http://illinois.statehousenewsonline.com/5511/lawmakers-defend-tax-hike-express-concern-for-cat/
In the pic: CAT HQ in Peoria. For the time being.