Governor Blagojevich's Investing in Families bus tour stops in Rock River Valley; visits local manufacturer to explain benefits of budget for small businesses

ROCKFORD - On the third stop of his weeklong "Investing in Families" bus tour, Governor Rod R. Blagojevich visited DLM Manufacturing in Rockford to talk about the benefits of his ambitious proposal to help small businesses.  The Governor's plan would give every Illinoisan access to affordable health coverage, would dramatically increase the state's investment in education and provide tax relief for working families by asking big businesses to pay their fair share. Duntai Mathews, owner of DLM Manufacturing, told the Governor about his struggles with healthcare.  Mathews believes that the Governor's proposed Illinois Covered healthcare plan will provide relief for small business owners like himself, who are struggling to pay their bills as well as maintain a healthy, productive workforce. 

 

"Duntai is like so many other small business owners across the state - they work hard; they create jobs and contribute to their local economies, and they're paying their share of state taxes to cover important services. But too many small business owners can't afford to get health coverage for their workers, and sometimes even themselves, and so every time someone gets sick or hurt, they worry that it could jeopardize the very business they've worked so hard to build.  That's wrong," said Gov. Blagojevich.  "We have an opportunity to help small businesses - the backbone of our great economy - have an easier time.  By making sure wealthy corporations are paying their fair share of the tax burden, we can make sure Duntai and his employees are able to get health insurance."

 

"I believe that everybody has to pay their fair share, which is what Governor Blagojevich's plan is all about. By investing more money in healthcare and education, we are going to help level the playing field for companies like ours, make our employees more productive and help our families build better lives.  Illinois Covered Choice is going to give me choices that I just don't have now, and its going to help my business become more competitive," DLM Manufacturing President Duntai Mathews said.

 

In 2003, Duntai Mathews started DLM Manufacturing after spending ten years working his way to the top at another Rockford wood manufacturing business.  His company manufactures wood products, such as information stands and napkin dispensers, for companies like McDonald's and Burger King.  DLM currently does not offer health insurance to its ten full-time employees due to the high cost.  Duntai is worried about losing existing employees and attracting new ones since he is unable to offer insurance.  For the last year, he, his wife and five children have also all been without insurance.  Under the Illinois Covered Choice plan, DLM would pay only $2,800 per month to insure everybody on the payroll.  This is $3,200 less than the private coverage that Duntai has looked at in the past and has better benefits, guaranteed coverage and stable prices.  Additionally, many of DLM's employees would have their premiums capped at $28 per month because of their income.

 

Mathews is one of thousands of small business owners who face the overwhelming challenges of owning a business.  As the cost of healthcare for business has been growing five times faster than the rate of inflation, the number of firms offering health benefits to their employees has fallen by at least 8 percent since 2000.  This causes a significant problem for business owners because health insurance is considered by employees as the most important employee benefit.  A recent survey found that two-thirds of workers say health care benefits are a very important reason to stay with their company.  While the Blagojevich Administration has expanded access to healthcare to more than 560,000 children, seniors and working adults with programs like  FamilyCare and All Kids, access to quality healthcare continues to be a concern for more than 1.4 million adults statewide who remain uninsured today. 

 

For small businesses like Mathews', the Illinois Covered plan will make it affordable to provide health insurance for their workforce. The primary components of Gov. Blagojevich's Illinois Covered plan include:

Also included in the Governor's budget proposal is the Helping Kids Learn plan, which continues the Governor's commitment to schools by boosting funding by an unprecedented $1.5 billion in Fiscal Year 2008.  Under the plan, general state aid to schools will increase by more than $800 million, raising the Foundation Level by $724 to $6,058.  With more funds per pupil, schools can improve textbook quality, modernize their technology, or invest in teachers.  The plan also will increase funds to hire special education teachers and fully fund "mandated categorical" programs like special education and transportation.  The plan will accelerate implementation of Preschool for All and dedicate additional resources for school districts that provide full-day kindergarten.  Underperforming school districts will get extra funds if they invest in proven strategies that raise student achievement.  And the plan will invest in a capital construction plan to replace or rebuild deteriorating schools.

 

The Governor proposed a major reform of Illinois' corporate tax system in order to provide sustainable funding for education and healthcare.  In Illinois, the share of state revenues coming from individual income taxes instead of corporate income taxes has consistently increased during each of the last three decades.  To reverse that trend, Gov. Blagojevich unveiled a Tax Fairness plan in his Budget Address earlier this month.

 

Many large corporations pay little or nothing in corporate income taxes, and they are not paying their fair share to meet the state's ongoing infrastructure, education, healthcare and public safety needs.  Gov. Blagojevich's plan takes historic steps to change the Illinois tax structure - one of the most regressive and unfair to working families in the nation.  According to the Illinois Department of Revenue, 37 of the 99 ‘Fortune 100' companies that filed taxes in Illinois paid no state income taxes, despite the fact that they averaged $1.2 billion in sales during 2004.  On average, 48 percent of corporations that generated $50 million or more in annual sales in Illinois paid no income taxes from 1997 through 2004.

 

The Governor's Tax Fairness plan implements a Gross Receipts Tax (GRT) that has been embraced by many economists because of its broad base and low rates.  States including Washington, Delaware and Hawaii have had a GRT for years, and, recently, Ohio and Texas have adopted a form of the tax.  The GRT will only apply to businesses that make more than $2 million each year, which means 85 percent of all businesses in Illinois will be exempt.  The GRT will tax service industries at a low 1.95 percent rate, while manufacturers, construction, retail and wholesale companies will be taxed at an even lower .85 percent.  Exports will not be taxed.  The plan also mitigates costs being passed on to consumers by excluding certain goods, such as retail food and pharmaceuticals.

 

Under the Governor's plan, large corporations that pay little or no state taxes now - many of which can afford luxuries like multi-million dollar bonuses for top executives, private jet service, and huge entertainment budgets - will finally pay their fair share so children can get a better education, homeowners can enjoy property tax relief and small business owners like Duntai Mathews can afford health coverage.