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Editorial: Call these gas plant bills what they are: taxation

Crain's Chicago Business

December 06, 2010

Think Illinois lawmakers haven't passed a tax hike lately? Think again.

A pair of bills jammed through the Illinois House in the veto session last week amount to an enormous tax increase for utility customers across the state. The legislation would require millions of Illinois residents and businesses to purchase gas and electricity at above-market prices from two “green energy” plants to be constructed with state backing.

Naturally, legislators tout the measures as “jobs bills.” The plants—one on the South Side of Chicago, the other in Downstate Taylorville—would create a couple thousand construction jobs and a few hundred permanent positions. State legislators who represent the districts where the plants would be built see a chance to grin for cameras at ribbon-cutting ceremonies and brag about bringing jobs to the area.

The rest of us would get to pay higher utility bills for decades. As Steve Daniels reported last week on Crain's website, ChicagoBusi-ness.com, customers of Peoples Gas and North Shore Gas alone could pay an additional $572 million over 20 years for gas produced by the proposed Leucadia plant on the South Side. Illinois businesses figure the Taylorville plant would cost them hundreds of millions a year in higher electricity costs.

This is taxation. It is government taking money from one group and transferring it to a smaller group with the political clout to extract special treatment from the state. It's government propping up businesses that can't compete in the open market by requiring the people of Illinois to underwrite their extra costs.

And it's an example of Illinois politics at its worst. House Speaker Michael Madigan bought the neutrality of two big gas utilities by skewing the Leucadia purchase requirements to limit the impact on their customers while forcing Peoples and North Shore to absorb a disproportionate share of the price hike. Mr. Daniels reports on the whole sorry affair in a story on Page 1.

Backroom deals and backdoor tax hikes—they go together.


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