Friday, July 28, 2006

Putting gas into Topinka’s campaign: Cutting taxes

On a typical, sweltering, late July afternoon in Chicago, Republican candidate for Governor Judy Baar Topinka sought yesterday to “gas up,” her campaign. Topinka urged the Democratic incumbent, Governor Rod Blagojevich, to call the Democratic dominated State House and State Senate into a special session. The session would be to accommodate Topinka’s prior request for legislation to phase out the 6.25% Illinois gasoline sales tax, starting the phase out when gas prices reached $2.00/gallon and removing it completely for prices greater than $2.50/gallon. The same phase out would apply to local gas sales taxes, Topinka added. When gas prices fell below the $2.50 level, the sales tax would be re-imposed, although it is unclear whether Judy would phase it in, to be symmetric with her phase out.

Three Term State Treasurer Topinka, down eleven points, or so, in several polls, stood at a gas station on the corner of Ontario and LaSalle St. in the Loop, about two hundred yards from the Rock and Roll McDonald’s and under a BP sign [Beyond Politics?], that listed BP’s top grade gas at 3.62/gallon. Judy argued to a gaggle of print reporters, cameras from NBC-5, local Fox and WTTW, Public Affairs and Illinois Channel, and a self
described “volunteer,” cameraman [Jordan, he said] from the Blagojevich campaign
that people in Illinois were hurting from high gas prices. Topinka said her proposed tax relief would help these people out, save them some money and maybe allow them to take a summer vacation—which sounded good to the media in attendance, who were straining to hear amid traffic and sirens that punctuated the press conference.

Topinka argued that tax flows that resulted from high gas prices were not “in the till,” were not anticipated in the budget planning and therefore could be returned to the taxpayer without preventing the State from reaching its budget expectations. In short, Judy Baar Topinka says the higher tax revenue for the state from higher gas prices is a “Windfall.” Easy come, easy go, or something like that.

When Public Affairs’ Berkowitz questioned the estimated loss, nonetheless, to the state Treasury over the next year of this tax cut, Topinka said we can’t estimate that because we don’t know the future price of gas. Berkowitz persisted-- assume it is $3/gallon, he said, trying to help. Judy declined to play that game and to give Berkowitz an estimate.

When the AP argued isn’t it true the state is still hurt by the loss of tax revenue, Judy went sort of Keynesian on us and started talking about consumers spending their new found disposable income, which she suggested would stimulate the economy, state and local, which in turn would bring in new tax revenue for the government. A novel theory, not quite supply side Laffer curve, not quite Keynesian. And, if Judy is right on her suggestion, why shouldn’t the state remove all sales taxes, which would stimulate the economy, and bring in offsetting new income tax revenue? Yet another tax swap idea? Nobody pursued it. Grist for the next press conference.

When another reporter questioned the possible high cost of the special session, Berkowitz suggested why not hold the special session in conjunction with the upcoming Governor’s Day and Republican Day in Springfield in August. Judy liked that, suggested we might save some costs for the State- perhaps the legislators who would be there anyway for those days would not ask for per diem reimbursement. However, Topinka rejected Berkowitz’s suggestion to have the special session at the fairgrounds.

But, why not. If you can hold a presser at a gas station, why not a special session outdoors? Too late, no more questions, the handler said. Off the gaggle of reporters went. Without even a Big Mac from Team Topinka. The summer of the media’s discontent. For Rod's rapid response to Judy's suggestions, see here.
Jeff Berkowitz, Show Host/Producer of "Public Affairs," and Executive Legal Recruiter doing legal search can be reached at