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Reactions to Governor's proposed budget
Posted: 03.19.2009 at 5:21 PM
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Sales tax holiday may hurt shoppers

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(Quincy, Ill.)  We're starting to hear comments today, both positive and negative, about the budget that Governor pat Quinn laid out for Illinois yesterday.

One opinion: it's heavy on taxes, but light on support for the business community.

One estimate is Illinois businesses would take a $630 million hit through increases in income and corporate taxes.

The budget also includes a sales tax holiday, but as KHQA's Jarod Wells found out today, there's concern that may do more harm then good.

Governor Quinn's idea for a sales tax holiday would actually be ten days in the month of August.  Shoppers in Illinois could buy clothing, shoes and school supplies without paying state sales tax. That sounds like a great opportunity for the businesses, until they see how it's funded.

"To offset the money that would be lost by the state in that time period," said Amy Looten of the Quincy Chamber of Commerce, "they would reduce the amount of money that a business gets to keep for collecting the sales tax."

That's the retailer's discount rate, which would drop one percentage point. That would save the state about $57 million.

"To have a reduction in your discount over the whole year for a little ten day period," said Looten, "the business is going to lose out on that. In its current form, it's not a good thing for our business community."

But as I found out from one business owner, businesses won't be the only ones affected..

"Our local retailers are not going to absorb that, they're going to pass it on to the consumer," said Mike Nobis, owner of JK Creative Printing.  "It just shows you how cheap our state has gotten, they really want us to go out and do their work for them, collecting our sales tax and now they don't even want to to reimburse us for it."

Mike Nobis says businesses will make up for the loss in sales tax by adding it to the base price of their products, which will cost shoppers more money.  Amy Looten with the Quincy Chamber stressed that the budget is not a done deal, it's just what the governor has proposed.  And Mike Nobis reminds the people of Illinois to talk to their lawmakers so they know what ideas citizens support and what they don't.

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