SPRINGFIELD — Proponents of some version of a tax-relief package for businesses and low-income households watched Tuesday as their efforts one again hit a legislative brick wall.
By Andrew Thomason
SPRINGFIELD — Proponents of some version of a tax-relief package for businesses and low-income households watched Tuesday as their efforts one again hit a legislative brick wall.
Lawmakers have been working on a measure that began as a means to keep the company that owns the Chicago Mercantile Exchange and the Chicago Board of Trade, CME Group, and Sears Corp. from following through on threats to leave the state that if Illinois doesn’t do something by the end of the year to lessen their tax burdens.
The companies said they’ll to move to states that are offering better tax-incentive deals.
A $325-million measure that included $85 million in annual tax breaks for CME Group and $15 million in tax breaks for Sears over the next decade passed the Illinois Senate by a 36-18 vote Tuesday, but suffered a crushing defeat of 8-99 in the Illinois House.
“At this point in time we have reached a temporary impasse … We are prepared to come back as soon as there is an agreement,” state Rep. John Bradley, D-Marion, who sponsored the legislation in the House, said.
The House Revenue and Finance Committee, which Bradley chairs, approved a $250-million measure Monday similar to the Senate’s version, except with smaller tax breaks for low- and moderate-income families. That measure was not given a vote.
Bradley said he only had 35 legislators, all Democrats, who were willing to vote for the House version.
“We’re not going to back to the drawing board, just taking a little bit more time,” Bradley said.
The House and the Senate adjourned to the call of the chair, meaning the speaker of the House or the Senate president can call their chambers back to Springfield at any time to take up an updated package.
Bradley said the Legislature may take up the issue before Christmas.
State Rep. David Harris, R-Arlington Heights, who sits on the House Revenue and Finance Committee, helped Bradley negotiate the House’s version of the bill. Harris said he was unsure of what the next step will be.
Sears spokesman Chris Brathwaite said Sears plans to follow through with its threat to move if nothing happens by Dec. 31.
“We are disappointed that, today, the legislature was not able to reach agreement and pass a package that will help us remain an Illinois company,” Brathwaite said in a written statement. “It is our hope that lawmakers will achieve a compromise very soon as our timeline for making a decision about our future by the end of the year has not changed.”
Tuesday’s vote was on a measure that was scaled back from the earlier proposal, which would have cost the state upward of $800 million in tax revenue annually.
The majority of the cost of the original plan included:
- Giving $100 million in annual tax breaks to CME Group and Sears
- Tripling the earned income tax credit for some taxpayers;
- Allowing businesses to claim a tax credit for any difference between what they made and what they spent;
- Increasing the $2,000 standard income tax deduction for individuals annually based on inflation.
To ease the burden of the recent 47 percent increase in the corporate income tax, the version that passed the Senate but failed in the House would have:
- Kept the tax breaks for CME Group and Sears intact;
- Allowed businesses to claim up to $100,000 in tax credits if they failed to make more money than they spent in a taxing year;
- Extended a research and development tax break for businesses;
- Increased the estate tax exemption.
Additionally, the failed package would have doubled the maximum earned-income tax credit for low-income households from $283 to $566, instead of tripling it.
Legislators in both chambers have been tepid toward a piecemeal approach to tax reform sparked by what they deem as corporate blackmail by large corporations.
“We need to make clear that Illinois will not be held hostage by corporations threatening to exit because these actions come at the expense of small- and medium-sized business that are not getting similar bills. If we’re serious about keeping businesses in Illinois what we ought to do tomorrow is repeal the tax hike,”said state Rep. Jack Franks, D-Marengo.