By DEBORAH BEHRENDS
Illinois Correspondent

SYCAMORE, Ill. — Although on its face, Gov. Rod Blagojevich’s proposed gross receipts tax (GRT) appears deceptively simple, it is a tax on all income received by a business allowing for limited deductions for the costs of doing business.

The GRT is not based on the ability of the business to pay, but is owed regardless of whether or not a business is profitable. And the tax has a higher impact on the total price paid for goods and services as it is built in at each level in the process.

The governor’s proposal is touted to raise more than $7 billion in new tax revenue.

DeKalb County legislators - state Sen. J. Bradley Burzynski, R-Clare, and state Rep. Robert Pritchard, R-Hinckley - are hosting several meetings to collect feedback from their constituents. The first in the series was conducted at the DeKalb County Farm Bureau and hosted an audience of only about a dozen area producers.

“The governor says the budget is balanced. (State Comptroller Daniel) Hynes says there’s a $2.3 billion deficit,” Burzynski said.
“The governor has increased spending every year since 2003.”

He pointed out that in a Forbes magazine ranking of the best states in which to do business, Illinois already ranks 44th.

Pritchard said, according to a study by Northern Illinois University, the cost of doing business in Illinois is 1 percent higher than neighboring states but only 89 percent as efficient.

The legislators pointed out that feed, seed, chemicals and fertilizers are not exempt from the tax.

According to figures they shared, the impact for a beef producer is the loss of $9.59 per head and a reduction of 41 percent in the profit margin for a pork producer.

Burzynski said he’s seen figures that estimate an additional input cost of $3.31 per acre for corn and $1.69 per acre for soybeans.
Pritchard said producers have testified in the house with even higher numbers.

“The most important thing to consider is that the GRT will add additional cost at every level,” Burzynski said.

“We want to spread the word as to what we think the impact is,” Burzynski added.

“I don’t see any good to come of it and it’s a difficult pill to swallow.”

“Right now there’s not much sentiment to vote for this proposal, even among Cook County legislators,” Pritchard said.

Both legislators urged voters to contact not only their offices, but the office of the governor, Lt. Gov. Pat Quinn, Senate President
Emil Jones and Speaker of the House Michael Madigan. Burzynski said Quinn, Hynes and state Treasurer Judy Baar Topinka already have voiced their opposition to the GRT.