Business leaders suggest Illinois budget cut, tax hike

CHICAGO (AP) - A combination of tax increases and budget cuts of $8 billion are being proposed by a group of Chicago businessmen to fix Illinois' finances.

The Civic Committee of the Commercial Club of Chicago on Tuesday called for increasing the state's individual income tax rate to 5.95 percent from 4.95 percent and the corporate tax rate to 8 percent from 7 percent.

The Civic Committee also proposes requiring state employees to pay a larger share of their health insurance costs, creating a less generous retiree health insurance plan for new workers and cutting an additional $1 billion from the $38 billion state budget. Taxing retirement income and some consumer services are also part of the Civic Committee's proposals.

Retired Price, Waterhouse Coopers LLP vice chairman Jay Henderson says eliminating the uncertainty of fiscal issues facing the state will improve Illinois competitiveness if it gets its finances in order.