State of State will Focus on Jobs: Quinn

Gov. Pat Quinn says he intends to focus on ways to create more jobs in Illinois when he lays out his vision for the state Wednesday, even if that means calling for some new spending at a time of financial crisis.

His State of the State address is likely to emphasize small programs addressing real problems. Painful details on the state's bleak finances will wait until he proposes a new budget later this month.

One example of what to expect: tax incentives to create jobs for veterans.

The Democratic governor will propose letting businesses reduce their income tax bills by up to $5,000 if they hire an unemployed veteran, according to a person familiar with his plans. The person was not authorized to discuss the proposal publicly before Quinn's speech and would speak only on condition of anonymity.

Quinn's plan calls for giving businesses a credit equal to 20 percent of the wages they pay to a veteran, up to a maximum credit of $5,000. Currently, Illinois offers a credit of 10 percent, up to a maximum of $1,200.

Quinn has also made clear that he'll propose tax relief targeted at families, although he hasn't offered any specifics.

It wasn't clear how much the tax measures might cost the state, but Quinn said some money must be spent to improve Illinois.

"You can't just cut your way to a better budget. We have to make cuts, there's no doubt about it," he said during an appearance Tuesday. "We also have to build and grow our economy."

Other officials seemed skeptical.

Illinois Democrats took the painful step of raising income taxes a year ago and last fall softened that blow with an array of breaks for businesses and families. More tinkering with taxes raises questions for some.

"We would be most interested in hearing how that could be paid for, given our current fiscal condition," said Rikeesha Phelon, spokeswoman for Senate President John Cullerton, D-Chicago.

Rep. John Bradley, a Marion Democrat who chairs the House Revenue Committee, expressed similar concerns. He said the focus should be on broad tax reform instead of new credits here and there.

Quinn also plans to call for the creation of a council of business leaders to come up with a plan to double Illinois exports by 2014, the administration said, confirming news first reported by Crain's Chicago Business.

Quinn's State of the State address follows a dire report earlier this week that said Illinois' backlog of unpaid bills could nearly quadruple — from $9.2 billion to $34.8 billion — over the next five years unless officials take action. The Civic Federation's report predicts pension and health costs will continue to climb while revenues will drop when the state's temporary income tax increase expires.

The governor has said Illinois needs to control costs in the Medicaid health care program. He also is talking of making downstate schools and universities share in the cost of pensions for their employees.

Quinn said he will touch on those issues but not discuss them in detail until his Feb. 22 budget address.

Quinn's tax proposals aren't likely to carry high price tags.

The Revenue Department said a smaller version of the veteran-hiring credit has rarely been used. Only 95 taxpayers claimed the credit, for a total cost to the state of $79,543, in the most recent year for which data is available. That was 2008-09, when the credit was 5 percent of wages, up to a maximum of $600, the department said.

To underline his interest in jobs, Quinn spent the day before his speech discussing two startup companies that are receiving money from a state venture capital fund that's part of a $78 million program called Advantage Illinois. And the day after the speech, he's expected to be in Belvidere for the announcement of hundreds of new jobs at a Chrysler plant where the new Dodge Dart will be built.