Amidst a budget shortfall and cries of mismanagement from both parties, Illinois Governor Rod Blagojevich backpedaled from some of his earlier proposals in his State of the State Address before the General Assembly Wednesday.

Taxes
Blagojevich distanced himself from the Gross Receipts Tax (GRT), a controversial plan to tax all corporations that do business in Illinois. The Governor introduced the GRT last year as a bold initiative to raise state revenues. It has been mired in controversy ever since.

This year Blagojevich promised to cut taxes on businesses that bear an “unreasonable” share of the corporate tax burden. He said that often it is the small corporation or local business that ends up with more to pay.

The Governor proposed a family tax credit and promised not to raise taxes on individual tax payers to pay for the shortfall in expected revenues for 2008.

Construction and Gambling
He pushed for a “Capital Bill” that would begin school, roads, and other public infrastructure construction before the “construction season begins in August.” A “Capital Bill” is supported by both parties, but they cannot agree on how to come up with the revenue to pay for future public construction.

The governor also proposed an expansion to the privatized gaming system in Illinois. He suggested that the state court more private investment in the gambling to increase revenues for the state.

Blago & Obama
Blagojevich’s narrative focused on working families and small businesses in his speech. He referred to the memory of his father clocking in and out of a factory job in an attempt to “call to work” the legislature.

The biggest applause line of the short, lackluster speech came when the governor invoked Barack Obama as a call to Democrats to deliver on their campaign promises of “health care for all in Illinois.” The chamber burst into cheers and whistles at the mention of the popular Illinois Senator’s name.