Rauner: Examine state's tax structure overall
CHAMPAIGN — Republican gubernatorial candidate Bruce Rauner said Friday he'd support rolling back state income tax rates to 2010 levels, and favors a comprehensive look at all state taxes, including sales and gas taxes.
But Rauner did not rule out tax increases, saying only that "the overall tax burden has got to come down, the overall spending has to come down."
He made his remarks in a campaign stop Friday afternoon at Merry Ann's Diner in downtown Champaign. About 50 people attended the one-hour event, part of Rauner's "Shake Up Springfield" bus tour through downstate Illinois.
A 67 percent individual income tax increase, approved by Democratic lawmakers in January 2011, is scheduled to drop back from 5 percent to 3.75 percent on Jan. 1, 2015. Democratic Gov. Pat Quinn's administration has projected that the rollback would mean $1.3 billion less in revenue in the state's next fiscal year, and more than $3.6 billion less in the year following.
Rauner said he wants the income tax increase rolled back, a new pension reform plan beyond the one approved by lawmakers late last year, more budget cuts and a review of all state taxes.
Asked what he'd do about the anticipated billion-dollar-plus hole in next year's budget, Rauner said, "Two things: dramatically reduce the spending by truly fixing the pensions because they have not been fixed. That was a Band-Aid on an open wound and I think there's a decent chance a lot of it becomes thrown out by the court. We need a true pension reform and we need to modify other elements of our spending. It's out of control. We have to plan for that."
Then he called for a review of the state's entire tax structure.
"And we need to look comprehensively at our entire tax code in Illinois. Don't only get caught up in the income tax. Let's look strategically at our entire tax code and our entire tax base: our income tax, our corporate tax, our fuel tax, our sales tax, our real estate tax, our use fees," Rauner said. "We are a tax-happy, fee-happy state and we're not competitive on many of those.
"We should look strategically at our entire tax system and compare ourselves to well-run states that we compete with and how do they handle their taxes, where are their rates and bases? How should we adjust our entire tax system so we're competitive and we're pro-growth. Because the only true answer to solve all of our challenges, the ultimate answer for us, is to become a growth state in Illinois. That's the only real answer."
Later, in response to a second question, Rauner declined to be specific about his tax plan.
"But I can't sit here today and tell you exactly which taxes should be at what rates. We need the overall tax burden down and the overall spending down," he said.
Rauner also admitted he "made a mistake" when he said that Illinois' minimum wage should be cut from $8.25 an hour to $7.25 an hour.
"I am all about increasing competitiveness for the state of Illinois. Illinois today is not competitive. That's why businesses are leaving. That's why we have brutally high unemployment," he said. "And in the context of competitiveness I've made quick, flippant, unilateral comments about lowering the minimum wage in the context of competitiveness. And that's a mistake. It's wrong on my part because there are better ways to increase Illinois' competitiveness."
He said he would support an increase in the national minimum wage (now $7.25 an hour) "so that Illinois' minimum wage rises and we have a level playing field so that all states are the same."
Or, he added, Illinois' minimum wage could be increased in exchange for pro-business measures.
"Another scenario is if we make pro-business changes in our state, change workers comp, change our tort system, change our tax system on our businesses. Then we can put in a higher Illinois minimum wage. We can afford it without killing our small business owners. And I'll support that," he said.
Rauner, who according to tax returns made $53 million in 2012, said he didn't believe he was disconnected from low-income Illinoisans.
"I'm running to increase the incomes for all voters, all citizens in our state, irrespective of income level. My wife and I care deeply. We have been very involved in the community in Illinois and around the city of Chicago," he said. "We are very involved helping to improve the quality of life for low-incme folks and families who are suffering from disadvantage and poverty and tough neighborhoods."
He said he and his wife support charter schools, help provide school vouchers, fund health clinics in Chicago and support a YMCA on the west side of Chicago.
"We are very engaged in improving the quality of life for low-income citizens all across the board. That's a major part of why I'm running," he said.
"People say to me, 'Well Bruce, you don't understand working people because you're rich.' Well you know what? I am rich. But I made it. Nobody gave it to me. I worked my tail off and I'm very successful. And I'm proud of that fact. I'm never going to apologize for it.
"Let me be clear: free market capitalism is the Number One engine of prosperity ever devised by mankind."