Daley: Illinois Tax Increase Will Drive Businesses To Indiana And Elsewhere

Illinois Gov. Pat Quinn (D) and his Democratic-controlled legislature succeeded in hiking Illinois' individual and corporate income taxes 66% yesterday to shore up the state's looming budget deficit. Illinois Democrats' decision to hike taxes rather than make cuts in state spending has received criticism from an unlikely source--Chicago Mayor Richard Daley. Here's what he's saying about the tax increase:

Mayor Richard Daley today predicted the increase in the corporate income tax rate passed by state lawmakers overnight will prompt a quiet exodus of jobs to neighboring states.


"Businesses don't have press conferences like this and announce they're moving 50 people out, 60 people out, 70 people," Daley said.

The comments of the Democratic mayor, who is not seeking re-election in February, echoed those made by Republican lawmakers as the Legislature sent the tax increase to Gov. Pat Quinn overnight with just the votes of Democrats who control the House and Senate. Quinn, a fellow Democrat, is expected to sign it.

"We have a new governor-elect in Wisconsin, a lot of competition comes from Wisconsin. (Gov.) Mitch Daniels from Indiana, a lot of competition," Daley said at a City Hall news conference to announce that downtown building owners have been asked to illuminate their properties with blue lights next week to signify peace in honor of Martin Luther King Jr.'s birthday.

Democrats argued that many Illinois businesses are not taxed under the provisions of the business income tax and won't feel the burden as strongly as Republicans suggest.

The General Assembly is wrong to ask taxpayers to bear the burden of fixing the state's financial crisis without first cutting more costs, the mayor said. "In some way they think the taxpayers of Illinois have a lot of money," Daley said. "You have to have a combination. People don't mind a tax increase if you cut out the waste and inefficiency."

Daley's words should be music to Gov. Mitch Daniels' ears.

UPDATE: Indeed, Gov. Daniels is comparing Illinois to The Simpsons:

The burgeoning fiscal crises in state and local governments took a turn toward fiction Tuesday, with Indiana Gov. Mitch Daniels comparing Illinois' problems to an episode of "The Simpsons."


"You guys are nothing if not entertaining over there," he said with a laugh on the Don and Roma show on WLS-AM. "It's like living next door to the Simpsons -- the dysfunctional family down the block."

Daniels, a former director of the Office of Management and Budget (OMB) under President George W. Bush, who earned the nickname "The Blade" for his cost-cutting tendencies, was referring to plans by Illinois' Democratic-dominated legislature to raise the state income tax up to 75 percent to bridge a deficit of $13 billion, according to local reports.

"If you want to bring new jobs to your state the last thing you do is make it more expensive to hire people, and so we've been working for six years, we're now at the top of everybody's list of a good place to do business, and going in the other direction really is something that we're not prepared to do, and I hope you guys find a way not to also," Daniels said.