Gov. Pat Quinn says Illinois is a better place to do business today, despite frequent complaints about taxes, regulation and other costs.
The speech focused on jobs, economic growth, education and tax relief for Illinois families and veterans.
Gov. Pat Quinn used Wednesday's State of the State address to call for ending an Illinois tax on natural gas.
The Democratic governor also proposed the creation of a new tax credit for parents with children, which he said will save $100 a year for the average family of four. And he called for expanding anexisting tax credit for companies that hire unemployed veterans.
In his speech, Quinn also set a goal of higher education for 60 percent of adults by 2025.
He said Illinois is a better place to do business today, despite frequent complaints about taxes, regulations and other costs. By overhauling workers' compensation, lowering unemployment insurancecosts and improving roads and bridges, the state has improved the business climate, Quinn said.
Quinn unveiled the tax cut proposals as part of what he called "the Illinois Jobs Agenda for 2012." He said that ending the natural gas utility tax would make Illinois the only one state without one in the Midwest, and would help businesses and families alike.
"This tax is an unfair, regressive tax that is not based on the ability to pay," Quinn said. "By abolishing it entirely, we can provide targeted tax relief to both consumers and businesses. Illinois will be the only state in the Midwest without a natural gas utility tax on manufacturers, retailers and everyday families."
The Democratic governor indicated he'd focus on ways to create more jobs in Illinois, even if it means some new spending at a time of financial crisis.
The governor declined to get into specific financial details about his plans, saying the painful details on the state's bleak finances will wait until he proposes a new budget on Feb. 22.
Quinn did not address the income tax increase approved a year ago, which critics say has been a burden on Illinois businesses.
Quinn also took a swipe at other states by saying Illinois still believes in the right of workers to organize. Indiana is on the verge of passing a "right to work" law that bars unions from requiring non-members to pay fees for representation.
Quinn also introduced the idea of tax incentives to create jobs for veterans. He proposed letting businesses reduce their income tax bills by up to $5,000 if they hire an unemployed veteran. The plan also 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.
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 state officials expressed skepticism. 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 scattered new credits.
Quinn called 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'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.
Sophia Tareen contributed to this report.
Christopher Wills can be reached at http://twitter.com/chrisbwills