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* Last week, Crain’s reported that Indiana was offering $150 million in incentives to CME Group to lure the firm across the state line. Today, however, Indiana Gov. Mitch Daniels claimed the story was not true…
But, in a hallway intereview yesterday after a Union League Club luncheon here, Mr. Daniels replied “no” when asked if the firm would save $150 million a year in taxes in Indiana.
He also said the original story was “misleading” because, in his view, it left the impression that any savings would come from special incentives rather than differences in tax rates between Indiana and Illinois. […]
But as he had in the hallway chat, Mr. Daniels referred to the difference in corporate tax rates between Illinois and Indiana—now about 3 percentage points, with the Illinois’ headed up and Indiana’s down.
CME last yet reported net earnings of $951 million, so a cut in its corporate income tax of three cents on the dollar would seem to save it nearly $30 million a year.
Well, that’s somewhat good news. At least they haven’t gone all in on a monster package.
…Adding… Reading this, you might be forgiven for believing that the gaming bill will cut current school funding…
Stalled legislation authorizing a Chicago casino could wind up costing Illinois schools more than $100 million over a two-year period, according to an analysis by state revenue officials.
That’s because of a tax break written into the legislation at Mayor Rahm Emanuel’s request that assigns the highest-grossing casinos a tax rate as little as 20 percent on revenues above $350 million. Existing law taxes such windfalls at a 50-percent rate.
New number crunching by the Illinois Department of Revenue follows the governor’s argument earlier this month that the casino-tax provision is “regressive” and that it “shortchanges” Illinois schoolchildren. […]
The Department of Revenue analysis of the legislation calculated that $123 million less would funnel into state coffers as a result of the lower tax rate on a Chicago casino.
This won’t cut current school funding. But because the Chicago casino’s tax rate would be lower than it would be under current law, schools would get slightly less from a much bigger pie for a couple of years.
The Quinn administration is really being dishonest here.
* Other stuff…
* Dick Durbin: Bank of America customers should ‘vote with their feet’: When Bank of America announced the new $5 fee, it was quickly seen as a result of the swipe fee reform — and dubbed the “Durbin fee” by some… The senator stood proudly by the “Durbin fee” moniker Monday. “I am honored to be connected with this effort,” he said. “What we are doing is fair.”
* Tribune bonus plan OKd by bankruptcy judge: The judge in Tribune Co.’s bankruptcy approved a management incentive plan that will pay bonuses of as much as $42.5 million to 640 employees.
* $11M in savings seen by pooling city-county services
* CTA chief knocks ‘archaic’ work rules, projects $277 million deficit
* Gas prices falling in Chicago
* Ford, UAW leaders have tentative contract deal
* Apple to launch iPhone 5 today
posted by Rich Miller
Tuesday, Oct 4, 11 @ 12:03 pm
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Good for Durbin for standing up to Bank of America, and doubling down against the so-called Durbin fee. Finally someone has the spine to stick it to the banks.
Comment by 47th Ward Tuesday, Oct 4, 11 @ 12:11 pm
I don’t doubt that CME and CBOE will get some kind of deal, but I still don’t believe that they would seriously consider moving to a smaller metro area.
It just doesn’t compute. Electronic trading has greatly reduced the amount of traders on the floor and communications efficiencies have reduced a lot of back office staff.
Yet the largest exchanges in the world still are in New York, London, Chicago, Shanghai and Hong Kong. Not exactly Merrillville or French Lick.
Put it this way: the NASDAQ is completely electronic and has never even had a trading floor — they could, theoritically, be headquartered anywhere. Where is their corporate headquarters and where to they pay taxes? New York City, not exactly a low tax haven.
Comment by wordslinger Tuesday, Oct 4, 11 @ 12:33 pm
While this could qualify as “other stuff” it may well deserve its own post:
http://chicagoinspectorgeneral.org
/wp-content/uploads/2011/10/Revi
ew-of-Public-Benefits-Clauses-and-Ch
aritable-Donations-Press-Release.pdf
Comment by Quinn T. Sential Tuesday, Oct 4, 11 @ 12:35 pm
In addition to the PR; here is the FULL REPORT:
http://chicagoinspectorgeneral.org/wp-content/uploads/2011/10/TIF-Public-Benefits-Clauses-Full-Report2.pdf
Comment by Quinn T. Sential Tuesday, Oct 4, 11 @ 12:38 pm
Using Quinn’s and the department of revenue’s logic me getting a raise is bad since I will pay more in taxes…
OneMan family could lose thousands in taxes…
Comment by OneMan Tuesday, Oct 4, 11 @ 12:48 pm
I hope Durbin will do something about excess overdraft fees next. Also, capping interest on credit cards at 7%…there is no reason interest on credit cards should be a ghastly 17%…that is highway robbery, especially for poorer Americans.
Go get them Durbin!
Comment by anon Tuesday, Oct 4, 11 @ 12:50 pm
Sen. Durbin’s “heroic” swipe fee regulation was always about capping the interexchange rate retailers pay to have certain transactions processed. It never had a thing to with the financial crisis, or protecting consumers. Now, as a result, consumers are going to pay more–not just at B of A but to other banks, too, thanks to Sen. Durbin. As recently as six months ago some Democratic Senators sought to delay the implementation of Durbin’s bill for a year so as to further study its impacts and implications, and to try to address some of the many concerns raised in comments to the Fed. (google it)
Unintended consequences baybee. Except this was not unexpected. A lot of experts predicted this exact thing would happen and that consumers would get screwed. That’s the problem with people in government acting to pick winners and losers in a quest to be “fair”–there are just going to be new winners and different losers.
Richard Durbin has nothing to be proud of in regard to this “effort”.
Comment by Responsa Tuesday, Oct 4, 11 @ 12:57 pm
===Richard Durbin has nothing to be proud of in regard to this “effort”. ===
Let it play itself out first. People are quite upset, and that could push legislation forward which would bite the banks in the rear.
Comment by Rich Miller Tuesday, Oct 4, 11 @ 1:01 pm
How does Durbin feel about people “voting with their feet” over issues liek taxation, crime, corruption, etc? It is far easier to change banks and a few direct deposit forms than it is for people to sell a home and move. Luckily, Wumpus does not believe in banks too much. He always carries a briefcase full of cash to handle his business (i.e. make it rain).
Comment by Wumpus Tuesday, Oct 4, 11 @ 1:11 pm
Responsa, how much should banks get to charge merchants for swipe fees? Wouldn’t those costs be passed along to the consumer? Didn’t the House Republicans pass legislation in 2004 that was essentially written by the banking interests to enable them to charge very high interest on credit cards and toughen bankruptcy laws? Late on a bill? Boom, your interest rate is now 29%.
Don’t tell me banks haven’t been trying to suck up more profits by gouging their customers on both ends. Remember when ATMs were going to lower bank fees because they would replace human tellers? Now they want to charge us for using our own money, and the charges are exorbitant.
Separate and apart from the fee issue, when the banks bet too much on subprime mortgages, they came running to the government for a bailout. Cry me a river. And the geniuses that lost those bets are getting millions in bonuses. The gutless wonders at Bank of America have only themselves to blame for the mess they’re in, but instead are trying to make Durbin the target.
I belong to a credit union and can’t understand why more people don’t join one.
Comment by 47th Ward Tuesday, Oct 4, 11 @ 1:31 pm
It wasn’t Durbin’s bill that raised the fees on checking accounts. It was BoA’s desire to keep their profit levels constant that led them to raise fees on the very people that make their business profitable. And to be clear, these fees aren’t the difference between BoA being successful and going under, these are to keep the profits as high as possible to pay out to shareholders and allow for the salaries at the top that dwarf anything made by even the most corrupt state pension doubledipper. To say this is Durbin’s fault is a deliberate ploy to let those making the decisions in BoA off the hook for their own greed.
Comment by Colossus Tuesday, Oct 4, 11 @ 1:53 pm
47th–if you think I am sticking up for banks in any way shape or form you are wrong. I just despise dishonest spin and the Durbin bill has been that from day one. The other issues you raised (exorbitant interest, bailouts, bonuses, etc.) make my blood boil, too. But they have zero do with the swipe fee caps in Durbin bill and none of those issues are addressed by the Durbin bill. Perhaps that is what he should have concentrated on? What eevil Republicans did in 2004 is not relevant to the specific focus of the Durbin bill, either.
The Durbin bill is a bad piece of legislation which was not well considered and even a lot of Democrats know it. I believe in calling a spade a spade. And I agree with you about credit unions.
Comment by Responsa Tuesday, Oct 4, 11 @ 2:15 pm
Thanks Responsa, but I think the only dishonest spin about the fee cap bill is coming from the banks. Durbin’s was one of very few successful attempts to go against the banker’s agenda, and they are trying to make him the bad guy.
You say Durbin’s bill is a bad piece of legislation. How so?
Comment by 47th Ward Tuesday, Oct 4, 11 @ 2:56 pm
I am guessing the management at the Tribune must be terribly conflicted, getting permission from the bankruptcy court to hand out massive raises to so many employees while they are drowning in red ink. They sure don’t like it when a governmental body hands out raises (or pensions) when they are running a deficit.
Comment by Roadiepig Tuesday, Oct 4, 11 @ 3:01 pm
Wow. My head’s really spinning today. Good one, 47th…either way, he’s fighting for truth, justice, and the American way. That should get alot of sympathy” votes, I guess?
Comment by Anonymous Tuesday, Oct 4, 11 @ 3:25 pm
Sorry. Forgot one important point: “either way, he’s fighting for truth, justice, and the American way AND the bad guys are out to get him for that.”
Comment by Anonymous Tuesday, Oct 4, 11 @ 3:28 pm
–He (Daniels) also said the original story was “misleading” because, in his view, it left the impression that any savings would come from special incentives rather than differences in tax rates between Indiana and Illinois. […]–
Upon further review, does that read that Indy is offering nothing to CME? It certainly doesn’t help Mr. Duffy’s negotiating position.
Comment by wordslinger Tuesday, Oct 4, 11 @ 3:37 pm
The casino numbers hold if you assume $0 in new revenue from bordering states and $167M in transferred revenue from other IL casinos. Or $167M in transfers plus an additional $3.33 in additional transfers for every dollar brought in from bordering states. With a 25% increase in revenue, every dime from existing casinos would have to transfer to Chicago to reach the administration’s figure. Oh yeah, sounds plausible…
Comment by thechampaignlife Tuesday, Oct 4, 11 @ 4:06 pm
Roadiepig @ 3:01 pm is exactly right!! This should be the real story. Complete hypocrisy.
Comment by Working hard in Southern IL Tuesday, Oct 4, 11 @ 4:13 pm
I believe the new rules will bring some transparency and competition to the credit card industry. Now we get to see what we’re really paying for the privilege of using credit and debit cards. If consumers don’t like the fees, they can shop for a better bargain.
Comment by Going nuclear Tuesday, Oct 4, 11 @ 4:32 pm
“The Quinn administration is really being dishonest here.”
And this is unusual how?
Comment by Anonymous Tuesday, Oct 4, 11 @ 4:37 pm
What is the deal with Noland’s Primary challenger?
http://www.benefitsage.com/blog/about/
What is his platform? What is he running for; or why is he running against Noland in the Primary?
Comment by Quinn T. Sential Tuesday, Oct 4, 11 @ 5:29 pm
He might want to edit the Facebook Page before he has his announcement; otherwise he could get painted with a very broad brush into a very tight corner.
Comment by Quinn T. Sential Tuesday, Oct 4, 11 @ 5:34 pm