Is Cash-Strapped State Taking A Pass On A $600M Payday?
CHICAGO (CBS) – Illinois is broke, but some say there's a way to ease the state's pocketbook pain by $600 million.
The Center for Tax and Budget Accountability says in these crisis times of cuts to education and human services Illinois could have that cash, but instead it's taking a pass.
"It is real money. It's what the Illinois Department of Revenue projects is the minimum amount we would lose," the center's executive director, Ralph Martire, told CBS 2's Kristyn Hartman.
The money would be lost in 2011 if the state does not decouple from a separate federal law.
Very generally, it gives businesses that bought equipment from 2010 through 2011 a special write-off all at once instead of what's typical over time.
That shrinks the taxes they pay for one year and increases their cash flow.
"The incentive we're trying to send here is for the private sector to step up, invest and employ people," says Doug Whitley, CEO of the Illinois Chamber of Commerce.
But the boost for business keeps money out of state coffers. Critics say other states have separated from federal law and Illinois should, too.
"I guess the question is, does the state need the money worse than the private sector trying to employ people?" Whitley says.
That depends on who you ask. The state-funded Women's Treatment Center that helps moms and their kids faces cuts in these tough times.
Some legislators say they'd like to revisit this issue in the veto session. They say the $600 million could go to pay bills or keep programs in place
But representatives for business say a change now would be a huge setback for employers who already took advantage of the tax break.
