Republican gubernatorial candidate Bruce Rauner, a multimillionaire businessman, offered up a series of proposals on Wednesday that he says aim to reform “corporate welfare.” His plan would include changing incentives offered to businesses to stay in Illinois, taxing the sale of racehorses as well as private jet and yacht inheritances.
The ideas were quickly dismissed by Gov. Pat Quinn’s campaign, which accused the Winnetka venture capitalist of putting forth his “second chicken budget” and stealing Quinn’s proposals, dubbing Rauner’s the “Kleptomaniac Budget Pamphlet.”
Rauner said a central component of his reforms would be revamping an incentive program that gives special breaks to businesses that threaten to leave Illinois. His proposal would require an element of growth from those businesses if they want to receive state dollars — something Illinois Speaker Mike Madigan proposed in legislation that passed the Illinois House in May but was not called for a vote in the Senate.
Rauner said he would put forth his own economic incentive program to keep businesses in the state.
“We need something that’s clear, transparent, that’s fair and it applies to all and it’s all around job growth. An incentive plan, it should be fair and equitable,” Rauner told the Sun-Times in a phone interview Wednesday. “It shouldn’t allow for layoffs or a failure to grow. The most important thing we’re going to do is reduce the overall regulatory burden on businesses. That’s the No. 1 way to get economic growth.”
Rauner maintains that lowering the tax rate for individuals and businesses would drive growth, saying that high tax states have higher unemployment and fewer jobs. If elected governor, Rauner would have to contend with a $6 billion budget hole, and it remains unclear what Rauner would specifically do to fill the gap, outside of general reforms he has suggested.
“Instead of giving us a real plan to tackle the massive structural challenges facing Illinois, Billionaire Bruce has given us two chicken budgets, with today’s version including nothing but warmed-over window dressing, stolen Quinn proposals and hypocritical ideas,” said Quinn campaign spokeswoman Brooke Anderson.
Rauner said he would overhaul the EDGE program — Economic Development for a Growing Economy — as a starting point to broader changes to make Illinois more attractive to business. He said the state has negotiated deals in the past — including for Sears — that allowed tax breaks even if the company is laying off workers.
Rauner maintains that Illinois will be competitive by lowering its tax rates on individuals and corporations as well as “corporate tax reduction and individual tax reduction.”
His plan mentions cutting tax breaks for private jets and yacht inheritances as well as ending an exemption for newsprint and ink from sales taxes, which he said cost the state $32 million a year.
Rauner said he did not consult with his billionaire donor hedge fund manager Ken Griffin — Rauner’s biggest donor, besides himself — on his plan. Griffin has railed against offering tax dollars to companies to stay in Illinois.
From a political standpoint, Rauner’s move on Wednesday, which included an email to his supporters with the proposal, aims to neutralize any narrative that Rauner, who owns nine homes and made $54 million in 2012 alone, would care only about the rich should he be elected.
Rauner said he spoke with the Illinois Chamber of Commerce and the Illinois Manufacturers Association and got feedback from small-business owners.
When Rauner was asked if trusting him to enact reforms against the wealthy was like trusting the fox to guard the chicken coop, he laughed, saying he came from a working family.
“I’m running for governor to help every working family in this state. We have lost jobs, we’ve had decline under Pat Quinn. . . . Lousy schools in too many communities,” Rauner said. “I’m doing this out of the love for the state. I don’t want to run for higher office. I want to look back after eight years in office [(and see every] family strong and prosperous in Illinois where wages are rising.”
Rauner spoke in a phone interview while campaigning in Rockford. Earlier this month, Rauner stood before reporters with three caged chickens and unveiled what he said was $1 billion in budget savings. But he did not have specifics on where he found more than $750 million of that $1 billion.
Other parts of Rauner’s plan include many elements that have been attempted to no avail in the Illinois Legislature. That includes Rauner’s proposal to end the “big oil loophole,” an incentive that allows oil companies with an Illinois presence to drill off shore without paying state income taxes.
There has been a push to revamp the state’s EDGE program.
That happened after ADM unsuccessfully sought an advantage when the Decatur-based company was contemplating locating a new global headquarters in Chicago. When state lawmakers balked, ADM went ahead and chose Chicago as the home of its new global complex without the state tax break.
Rauner’s proposal also calls for a way to end a tax break that family members receive on jets or yachts when they bequeath the multimillion-dollar luxuries to family members and are able to avoid a 6.25 percent tax.
Rauner did not specifically say whether he would support a private jet depreciation tax break that has been discussed nationally as costing an estimated $3 billion nationwide. Instead, he said he would look at the whole tax code in Illinois.
