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* From my pal Dave Eldridge…
Earlier this morning, Rep. Jack Franks filed HB 4300, which is a 2 year (FYs 16 & 17) revenue BIMP. Among the things the bill does, it addresses (in fact in most cases closes) many corporate tax loopholes.
I have done a quick and dirty synopsis of many components of the bill. See below.
Article 5: Creates a not-for-profit Illinois Business & Economic Development Corporation (pp. 1-14)
Article 10: Creates the Health Insurance Claims Assessment Act (pp. 14-24)
Article 15: Illinois Income Tax Act–New Markets Development, Water’s Edge, LGDF changes (pp. 178-188), elimination of county officer stipends (pp. 218-36), & business filing fees reductions (pp. 237-240)
Article 20: Changes definition of United States for continental shelf tax provision purposes (pp. 262-63)
Article 25: Board and commission salaries and reimbursements eliminated (pp. 268-345)
Article 30: Tangible personal property (TPP) exemption regarding rail carriers eliminated (pp. 345-398)
Article 35: Rolling stock exemption stricken (pp. 398-440)
Article 40: Strikes gasohol exemption (pp. 440-462)
Article 45: No enterprise zones going forward and current zones eventually expire (pp. 462-68)
Article 50: IRMA’s vendor’s discount exemption cut from 1.75% to 0.75% and some related discount exemptions cut to 0% (pp. 468-617)
Article 55: Newspaper ink exemption eliminated (pp. 617-658)
Article 60: Hotel on-line travel exemption eliminated (p. 657-59)
Article 65: State mileage reimbursement set at 39 cents (p. 661)
Article 70: Film tax credit capped at aggregate of $20 million per fiscal year (p. 662)
Article 75: Lottery report regarding increasing revenue (pp. 662-663)
Article 80: R&D credit continued but cut in half (pp. 663-697)
Article 85: Manufacturing credit–products related TPP gets exemption (pp. 697-750)
Article 90: Angel Investment Credit extended to 2021 & aggregate credit increased from $10 million to $20 million per fiscal year (pp. 750-57)
Article 95: Data centers exemption (pp. 757-831)
Article 100: Public Aid–contracting (pp. 831-888), pharmacy & dispensing fees set at $2.35 for brand name & $5.38 for generic (p. 888), reimbursement rate reduction capped at reductions of no more than 2.25% of FY15 & 1.6% of FY 16 (pp. 888-891), nursing home blended rate reduction capped at reductions of no more than 2.25% of FY15 (p. 891), managed care for DCFS wards (p. 892), hospital assessments (pp. 892-897), capitation payments (pp. 897-912), & IG (pp. 912-921)
Article 105: DOC must maintain adequate staffing levels such that no correctional officer can work more than 2 hours of overtime per week (pp. 922-935)
Immediate effective date
Lots of stuff in there. Thoughts?
*** UPDATE *** From the IMA…
From: Mark Denzler
Date: September 24, 2015 at 4:55:59 PM CDT
Subject: Jack Franks $3 billion tax hike filedToday, Rep. Jack Franks filed HB 4300 that raises taxes on employers by nearly $3 billion. It also contains more than a billion dollars in spending cuts and lottery growth that are not in the realm of possibility.
We strongly oppose HB 4300 that will eliminate the Single Sales Factor, repeal the Enterprise Zone program, tax domestic and foreign dividends, repeal the rolling stock exemption, tax domestic oil companies, and decouple from the federal qualified production activities deduction.
Attached is our brief analysis. More details to come.
Thank you.
Mark Denzler
Vice President & Chief Operating Officer
Illinois Manufacturers’ Association
* Their analysis…
Reduction or Elimination of Tax Incentives
• Eliminate foreign & domestic dividend deduction $235 million
• Eliminate Single Sales Factor $150 million
• Decouple from the federal Qualified Production Deduction $65 million
• Repeal the non-combination rule $20 million
• Eliminate the continental shelf exemption $25 million
• Eliminate Enterprise Zones after bill becomes law
• Reform the Retailers Discount (IN model) $90 million
• Reform other Collection Discounts (cigarette, hotel, etc) $47.8 million
• Eliminate the E-10 incentive $120 million
• Eliminate the New Market Development Program $3.8 million
• Eliminate the rolling stock exemption $74 million
• Eliminate waters edge “offshore tax haven” $108 million
• Eliminate rail carrier sales tax exemption $3 million
• Eliminate sales tax exemption for print ink$32 million
• Treat online hotel booking same as telephone $9 million
• Health insurance claims assessment act (Michigan) $50 million
• Cap film tax credit at $20 million $25 million
New or Increased Tax Incentives
• Research & Development tax credit (permanent, 50 % base)
• Merge the MPC into the MME (permanent)
• New tax incentive for data centers
• Bonus depreciation for small businesses (< $10 million gross sales)
• Angel investment tax credit (5 year extension 2021, $10 to $20 million cap)
• Tax amnesty period (Oct 1, 2016 – Nov 8, 2016) $25 million
• Reduce LLC filing fees
Tax Items not included
• Estate tax
• Franchise tax
• Graphic Arts exemption
State Spending
• Creation of a PPP (3 year sunset)
• Increase lottery revenues by up to $1 billion $1 billion
• Cut the LGDF by 10 percent$127 million
• Eliminate DCEO $45 million GRF $771 million other
• Eliminate local government officials stipend $5.2 million
• Reform OT at the Department of Corrections $37 million
• Decouple university procurement from CMS $100 million
• Managed care for wards of the state $25 million
• Reduce care coordination fees (50 percent move from ACE/CCE) $30 million
• Durable medical equipment supplies $30 million
• SB 788 Medicaid savings $160 million
• SB 788 wards of the state to MCC $100 million
• Federal funds pursuant to ACA $200 million
• OIG savings pursuant to SB 788 $21 million
• Medicaid redetermination $53 million
• Nursing home audits pursuant to SB788 $40 million
• Medicaid federal revenue cost reduction $75 million
• Eliminate salaries, per diems, HC and pension–Boards/Commission $3 million
• Reduce mileage reimbursement state employees $10 million
TOTAL REVENUES $2,839,761,000.00
TOTAL POTENTIAL ADDITIONAL REVENUE $1,063,000,000.00
TOTAL $3,902,761,000.00
posted by Rich Miller
Friday, Sep 25, 15 @ 1:01 pm
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Yea?
Comment by Wondering Friday, Sep 25, 15 @ 1:03 pm
I’m fine with a lot of this. He’s delineated most of these points on the floor, so it’s not a surprise. At some point, both sides have to agree on some revenue. This is as good a start as any.
Comment by Team Sleep Friday, Sep 25, 15 @ 1:06 pm
How much is this estimated to save, per year? I think it is a very worthwhile endeavor.
Comment by Capitol Fax Follower Friday, Sep 25, 15 @ 1:07 pm
Whoa. That Corrections OT thing is going to require hiring a whole lot of people.
The state mileage reimbursement rate is probably going to drive the union’s nuts. That’s a 30% + reduction in reimbursement.
And no money at all for Boards and Commissions? Who’d want to serve if the state isn’t even going to reimburse their expenses?
Comment by Demoralized Friday, Sep 25, 15 @ 1:10 pm
Its over 930 pages…. He couldnt split it up??
Comment by Anon Friday, Sep 25, 15 @ 1:11 pm
Follower - during one of the summer session days, Rep. Franks said that these loopholes could close the current budget gap.
I think he may be overshooting the moon, but when combined with some other options then those measures in total would do the tricl
Comment by Team Sleep Friday, Sep 25, 15 @ 1:12 pm
The elimination of the newspaper ink exemption will help a lot. Wait, is it 1973?
Comment by nixit71 Friday, Sep 25, 15 @ 1:14 pm
Has anyone scored the financial impact?
Comment by Any Mouse Friday, Sep 25, 15 @ 1:16 pm
Do them all! I don’t agree with them all, but if we need to cut costs, lets cut costs! It all can’t be revenue and firing people.
Comment by Dudeman Friday, Sep 25, 15 @ 1:16 pm
What if an emergency happens at a prison or a significant snow storm? You can’t legislate OT, especially to two hours. This smells.
Comment by pool boy Friday, Sep 25, 15 @ 1:18 pm
Even if this bill passed both houses, would Rauner sign it? My guess is NO.
Comment by Mama Friday, Sep 25, 15 @ 1:20 pm
At least it’s something new to talk about.
Comment by Norseman Friday, Sep 25, 15 @ 1:22 pm
Mama - but I bet that this type of bill is easier for Rauner to negotiate than a straight up income or corporate tax increase.
Comment by Team Sleep Friday, Sep 25, 15 @ 1:23 pm
Good luck with the DOC hiring.
Comment by Rufus Friday, Sep 25, 15 @ 1:27 pm
Lol so if DoC loses people, and doesnt have trainees teady to go it does what? Closes the prison to keep ot under 2 hrs…. Maybe ask the inmates to behave…..
Comment by Ghost Friday, Sep 25, 15 @ 1:27 pm
I have always been amazed by “do-gooders” who think board members should serve the people without any compensation, even expenses. To attract quality board members you need to reimburse them for their time, I wouldn’t think the quality of volunteer board members would be very high, and/or they would only be interest in serving because they have conflicts of interest.
Let’s ask Rep. Franks why his bill doesn’t eliminate salaries for Members of the General Assembly, which is just a part-time job anyways.
This is an extreme position.
Comment by Just Me Friday, Sep 25, 15 @ 1:27 pm
Whats the penalty of doc misjudges staffin. Levels…. Or what if they are not appropriated funds to cover staffing, human tesource management is not a job for the GA…. Especially one that cant find money to pay fornthe staffing levels now
Comment by Ghost Friday, Sep 25, 15 @ 1:29 pm
=== … but I bet that this type of bill is easier for Rauner to negotiate than a straight up income or corporate tax increase. ===
And, I bet this bill doesn’t bring in anywhere near the revenue needed to get the job done.
Comment by Norseman Friday, Sep 25, 15 @ 1:31 pm
This bill has alot in it..it only gets bigger as groups did deeper. For example, capping DoC staffing levels and overtime cap - public safety issue? What about other public safety issue such as mental health care access?
This thing balloons
Comment by Waffle Friday, Sep 25, 15 @ 1:33 pm
These fair and square Tax provisions were purchased in a completely fair and transparent manner. What in the world does he think he is doin’? /S
The prison staffing issue is long overdue and we have been very fortunate there have been no staff killed despite the deliberate mismanagement.
Sadly, there is an neither an increase in the Casino Gaming tax nor alcohol beverage tax. Score another WINNING for the clout powerhouses of the Capitol Dome, the $5 billion taxpayer subsidized Alcohol and Casino industries get off for free…again. Why am I not surprised?
Comment by Beaner Friday, Sep 25, 15 @ 1:37 pm
Wait, Jack Franks? THAT Jack Franks?! Really? If so, that’s the same guy who voted for each and every DCEO Edge grant, special Edge grant, corporate give-away and the like since his arrival in Springfield. #SpareMeJacksBS
Comment by Georg Sande Friday, Sep 25, 15 @ 1:42 pm
First, I may have to pay off on my faux bet about the revenue generated by the bill. Two, I’m curious as to how IMA came up with the cost for some of the items like Medicaid savings, etc. It looks like they were fed the numbers.
Comment by Norseman Friday, Sep 25, 15 @ 1:46 pm
Maybe just because it’s the end of a long week, I love the IMA analysis’ inclusion of the two zeros after the decimal point, really emphasizing just how much money is at stake. But hell, why stop there?
TOTAL $3,902,761,000.00000000000 !!
Comment by Linus Friday, Sep 25, 15 @ 1:48 pm
Great start of any discussion of “closing tax loopholes.” A lot of pols in both parties love to use the phrase. Most are unwilling to specify or commit to them.
Ok. Which ones will you support? How much?
Put up or shut up!
Comment by walker Friday, Sep 25, 15 @ 2:01 pm
Mileage reimbursement should stay the same as the IRS
Comment by Anonymous Friday, Sep 25, 15 @ 2:04 pm
R&D should be reduced by at least half which I agree or it should be totally eliminated.
Comment by Anonymous Friday, Sep 25, 15 @ 2:05 pm
There is something in his proposal for everyone to hate!
Comment by Kerfuffle Friday, Sep 25, 15 @ 2:07 pm
Georg Sande: plain wrong.
Jack Franks has been a serious critic of both DCEO and its grants for years now. That’s why he had so many of the elements of these big bills in his pocket ready to go.
Why do you just make up things and throw them out there?
Comment by walker Friday, Sep 25, 15 @ 2:09 pm
===If so, that’s the same guy who voted for each and every DCEO Edge grant, special Edge grant, corporate give-away and the like since his arrival in Springfield.===
Please cite each bill, roll call, and the General Assembly these bills and roll calls occurred.
Thanks.
Comment by Oswego Willy Friday, Sep 25, 15 @ 2:17 pm
Manufacturers against the elimination of corporate welfare. Imagine that.
Comment by Tournaround Agenda Friday, Sep 25, 15 @ 2:17 pm
Closing corporate tx loopholes was something Rauner mentioned during the campaign but only during his campaign. Time to make good.
I don’t like the DOC overtime, could end up costing more and the elimination of any reimbursement for serving on a board may hurt your choices but I see most if it as a positive step forward.
Comment by JS Mill Friday, Sep 25, 15 @ 2:19 pm
This is a ‘real’ start. Let’s take it seriously and start ‘talking’ about some real reform. The legislature and the governor are capable of compromise, now let’s use this bill as a start to; start talking.
Comment by The Professor Friday, Sep 25, 15 @ 2:26 pm
I agree with some of the commenters above: instead of totally ruling out everythin on Frank’s list, use it as a good starting list to drive down the deficit, knowing that the savings yielded from these changes will probably have to be supplemented by some other revenue enhancements.
Comment by Capitol Fax Follower Friday, Sep 25, 15 @ 2:35 pm
I think it is pretty obvious the words pro business and democrat have nothing in common any more. Jobs especially in manufacturing are the number one problem facing Illinois right now. This will hinder job creation and retention in Illinois. Raising taxes on business on top of the already mentioned property tax hikes and rise in the minimum wage in Chicago will cause job losses.
Comment by Lucky Pierre Friday, Sep 25, 15 @ 2:37 pm
Tax on business means cuts in Socialist Entitlements for Business!
Good work!
Comment by Jack Stephens Friday, Sep 25, 15 @ 2:42 pm
Looks like the same PPP as was proposed before. I just skimmed it but it looks the same. 3yr sunset. Focus on minority and womens business development. Anybody else see something I missed. Rauners folks aren’t going to like this one bit.
Comment by Honeybear Friday, Sep 25, 15 @ 2:44 pm
The Dems should label this the “Tax Turnaround Agenda.”
Then demand that Governor Rauner sign on to the Tax Turnaround Agenda before giving him the income tax increase that Rauner still would need to govern.
Fair?
Comment by walker Friday, Sep 25, 15 @ 2:50 pm
The tax stuff is straight out of Balgo: Year One. Think how different things could have been if Mr. Franks was on board with this stuff back in 2003.
Comment by SAP Friday, Sep 25, 15 @ 2:53 pm
Better to just put the income tax back at 5%. ASAP.
Comment by DuPage Friday, Sep 25, 15 @ 2:53 pm
Walker & Silly Willy:
2009- HB1526- Special Edge Credit to Chrysler/Ford/Mitsubishi -Franks voted yes
2010- SB3089- Special Edge Navistar- Franks voted yes; SB3655 IL R & D income tax extension- Franks voted yes
2011-SB4- Special Edge- Continental Tire/Motorala; SB397- Sears tax credit Franks voted yes on both
2012- SB3616 68 enterprise zones created Franks voted yes
2014- SB3010 Extend Manufacturers Purchase Credit; Franks voted yes
AND… HB390 BILL TO CLOSE SO-CALLED LOOP-HOLES … FRANKS, NO!!
That’s Franks’ record. Care to refute it Silly Willy or former State Rep. (one-term only) Walker?
Comment by Georg Sande Friday, Sep 25, 15 @ 3:03 pm
Nice move by Franks…Yesterday Tryon indicates that talks need to begin regarding the budget and revenue. Today Franks kicks it off and more or less let’s the GOP know that they need to participate in the process in rder to protect their constituency. Also, puts Rauner in a spot to defend big business in a similar fashion as the DEMS have had to fight for labor. Let’s see if big business gets on Rauner to finally find some compromise and to get a budget fix sooner than later. Looks like Madigan can wait forever with this list of items…more committee of the whole’s in the future?? Great message points for the DEMS. 1%’rs and big business…hmmm Game of chicken gets more interesting every day!
Comment by Just saying... Friday, Sep 25, 15 @ 3:14 pm
Looks like Republicrat Jack doesn’t have the gonads to stand out front on an income tax increase, does he? Mr. Copout….
Comment by Joe Schmoe Friday, Sep 25, 15 @ 3:17 pm
Jack Frank’s proposal reminds me of the movie Dave, where a body double becomes the President and then proposes ways to fund homeless shelters, etc. It would be a great message for IL, just as in the movie: “It’s Tuesday and everybody works on Tuesday!” Yeah, and the real President was in a coma too.
Comment by AJ_yooper Friday, Sep 25, 15 @ 3:19 pm
Georg Sande: Thanks for doing the research. You’re clearly right on the votes, and my comment was out of line. My apology.
My perspective comes not from some individual cases, but from knowledge of Franks’ efforts to change or abolish DCEO and the whole process of corporate tax cuts and benefits across the board, over the years.
Comment by walker Friday, Sep 25, 15 @ 3:19 pm
A great start for putting all the corporate welfare on the table.
Gov. Rauner, what say you? (Maybe not Rep. Ives making your case this time; friendly advice,).
Comment by Wordslinger Friday, Sep 25, 15 @ 3:23 pm
- Georg Sande -
Well done.
I guess that makes Franks like “Nixon and China”… I mean wthat record, Franks wanting to reform DCEO, no one can say he’s been trying to destroy it for years.
Comment by Oswego Willy Friday, Sep 25, 15 @ 3:31 pm
Creative article , I learned a lot from the points - Does anyone know if I can access a blank 2005 IN DoR ST-105 example to use ?
Comment by TIFFANIE BARROS Wednesday, Oct 7, 15 @ 10:35 am