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Blagojevich to outline budget plan today

By Sean Crawford, IL Public Radio

Springfield, Ill. – Illinois Governor Rod Blagojevich will unveil his budget plan today (Wednesday). It includes what some believe could be the largest tax increase in state history, but not everyone would pay the same.

Blagojevich wants a gross receipts tax. He plans to use the revenue to fund an expansion of healthcare and to give schools a financial boost.

A source who has seen the proposal says the tax would only kick in once a business earns more than $1 million, meaning many small businesses would be exempt.

Insurance firms and casinos would also be able to skip paying the tax. And there would be lower rates applied to manufacturers compared to what the service industry will be charged. That's expected to lessen the blow slightly for the manufacturing sector, which by the nature of a gross receipts tax, could be hit harder than others.

A gross receipts tax is levied on any transaction in the business process. The Governor is expected to say it will make sure business pays its fair share; companies are likely to argue consumers will wind up paying more.

The Governor also plans to use the windfall to give about $1.5 billion more to schools, and to fund construction of new preschools.

And he wants to sell the State's Lottery and use the proceeds to leverage billions of dollars for public employee pensions.

And Blagojevich will ask lawmakers to approve a statewide construction program, although there are few details on it.