SPRINGFIELD — An outspoken critic of Illinois’ corporate tax increase may not attend a hearing on the state’s business tax system today, but his comment will dominate the debate.

By Benjamin Yount

SPRINGFIELD — An outspoken critic of Illinois’ corporate tax increase may not attend a hearing on the state’s business tax system today, but his comment will dominate the debate.

Craig Donohue, CEO of the CME Group, parent company of the Chicago Board of Trade and the Chicago Mercantile Exchange, told Reuters news service last week that Illinois’ high tax burden is motivating him to relocate his business to possibly Texas, Florida and Tennessee.

“Our tax situation is untenable,” said Donohue. “I don’t think CME Group is different from other companies” that relocate.

Tuesday’s hearing in Rockford is one in a series of gatherings where business groups statewide discuss tax rates, tax fairness, tax incentives and the tax code with lawmakers.

CME did not testify at the first hearing on July 19. CME spokeswoman Laurie Bischel would not say if the company planned to speak Tuesday or at the other hearings later this month.

State Sen. Toi Hutchinson, D-Olympia Fields, said that’s a shame.

“I think an organization that has a very high tax burden has standing to discuss why that tax burden should (be) different or (be) spread out differently, as opposed to a multi-national corporation that is not paying state taxes,” Hutchinson said.

Hutchinson is running the tax hearings for the Democrats in the state Senate. She said Illinois jumped when Caterpillar Inc., Peoria’s heavy equipment maker, talked about moving out of state. Hutchinson said she is wondering what the state can do to keep CME within its boundaries.

“We shoot buckshot,” said Hutchinson. “Whoever has enough money and can yell the loudest, and say, ‘We want this or we’re leaving,’ usually get the big tax breaks.”

Hutchinson said that’s not fair to small- and medium-sized businesses statewide, but she doesn’t want to see CME leave Illinois.

The House Republican point person for the tax hearings, state Rep. David Harris, R-Arlington Heights, agreed with Hutchinson that the current system needs to be fixed.

“The government needs to create an environment, large and small, to create jobs,” said Harris. “We can do that through a fair and equitable tax system.”

If Illinois’ tax system is not fair, Harris said, then CME leaving the state makes sense.

“It’s fair for them, as a business decision, to say, ‘Maybe we ought to set up our computers in Indiana or Wisconsin where we don’t have the same level of taxation,'” Harris said.

But he is quick to add that it’s fair for lawmakers to try and keep CME in the state.

That could be a job for Warren Ribley and his staff at the state’s Department of Economic Opportunity. Since 2009, they have handed out $621.4 million in business investment packages to almost 150 companies.

Ribley said that if CME can demonstrate that Illinois’ taxes are having an adverse effect on it, the state may be able to help.

“We’re certainly willing to sit down with CME,” said Ribley. “We’re willing to talk to them, to see if there are ways of closing the gap.”

But Ribley said the state would have the same conversation with any business.

Ribley would not say if the state has reached out to CME, and Bischel would not comment on any possible conversations.

Hutchinson said the best way to keep CME, and companies like it, may be to rewrite Illinois’ entire tax code.

“The tax code is not adequate for the 21st century economy that we actually have,” said Hutchinson.

Tuesday’s hearing is the second of four informational hearings. Lawmakers also will meet in Springfield and southern Illinois later this month.

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1 Comment

  1. Keeping businesses in Illinois

    How to keep businesses in Illinois? Simple. Raise taxes to fund a commission to study why businesses are leaving Illinois.

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