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Miller: Tax hike isn’t going away soon, despite what Rauner says

Published: Monday, July 21, 2014 9:37 p.m. CST

"This morning," 1,063 respondents were told the evening of July 17 during a Capitol Fax/We Ask America poll, "Republican candidate for governor Bruce Rauner released an economic plan for Illinois.

“That plan calls for a freeze on property taxes and rolling back the 2010 tax increase. It also implements a new tax on services, such as advertising, legal services and mini-storage centers. We'd like to know whether this type of plan would make you more likely, or less likely to vote for him."

Rauner had most certainly tested his service tax proposal backwards and forwards before presenting it to the public last week, so I figured it had to poll fairly well. It did.

The poll found that 53 percent said they'd be more likely to vote for Rauner, while just 32 percent said they'd be less likely to vote for him and 15 percent said it made no difference.

As we've discussed before, Rauner has struggled a bit with women, but they actually liked the idea more than men. Fifty-six percent said the idea made them more likely to vote for Rauner, while just 28 percent said they were less likely. The male split was 47 percent more, 39 percent less.

The highest regional support for the plan came from the suburban collar counties, where Rauner did the best in the primary. Sixty-six percent of collar county voters said the proposal made them more likely to vote for Rauner, while 25 percent said less. The split among Downstaters was, 53-27. It was, 49-3, among suburban Cook County voters, and he was upside down in Chicago, where he always polls poorly, 32-50.

Just 17 percent of Republicans said they'd be less likely to vote for Rauner while 66 percent said they'd be more likely. Among independents, 56 percent were more likely and 29 percent were less likely to vote for him. And among Democrats, 33 percent were more likely while 53 percent less likely.

Why does this look so popular? Well, people hate that income tax hike and they hate their property taxes. On its face, this could look like a "magic bullet" to folks.

There are no magic bullets, of course. If there were, they would've already been used.

Rauner specified a mere $577 million in new annual revenues via his service tax, which is nowhere near the $8 billion he wants to give up from the income tax hike.

Rauner says he'd phase out that tax hike over four years, and he's said he could accomplish this with economic growth. According to the state’s Commission on Government Forecasting and Accountability, income tax revenue growth averaged just 6.8 percent between Fiscal Year 1998 and Fiscal Year 2013. Rauner wants to grow those revenues by almost 67 percent over just four years.

"Rauner's plan would add more than a half-billion dollars to state coffers, but wouldn't come close to replacing the $8 billion from the taxes he would roll back," polling respondents were told. "Do you think the state can afford the Rauner plan?"

Illinoisans were split, with 41 percent of the respondents saying the state can afford it and 43 percent saying it can't.

"They want the benefits of overall lower taxes, but doubt the viability,” said pollster Gregg Durham.  The poll had a margin of error of +/-3 percent. 28 percent were mobile phone users.

And that second set of numbers might've been far worse had more specifics been used.

"Too bad [Rauner's plan] is entirely phony and false and paid for by massive cuts to education," texted Gov. Pat Quinn's campaign spokesperson Brooke Anderson last week. "Wonder how that polls."

Anderson rightly pointed out that the state budget includes around $16 billion in "non-mandated" expenditures – the rest is pretty much required and/or locked-in spending.

Without massive, unprecedented growth, Rauner would have to cut that $16 billion in spending roughly in half – and education also makes up half of that $16 billion. "Talk about decimating public education – you're pretty much eliminating it," Anderson said, giving us a likely preview of the upcoming TV attack ads.

Not to mention the massive fiscal cliff created by this year's state budget, which adds billions in deferred costs to next year's budget. The only way to avoid that is to raise the rate back up to 5 percent after Jan. 1, when it's scheduled to go down to 3.75 percent.

Rauner's campaign refused to talk about specific phase-out percentages and timelines last week. But the cold hard reality is, that tax hike isn’t going away very soon, no matter what he says.

• Rich Miller also publishes Capitol Fax, a daily political newsletter, and CapitolFax.com.

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