* House Republican Leader Tom Cross unveiled his economic plan in Chicago yesterday. As I’ve already told you, Cross has held some Downstate press conferences to tout the plan…
Cross cited lowering the fee for incorporating a new business to $100 from $750, extending existing enterprise zones, making permanent the research and development tax credit, raising the ceiling on estate tax liability, and allowing firms to carry losses into later tax years.
But Cross did not mention his proposed repeal of January’s corporate income tax increase, which was largely pushed through by Democrats.
“We’d go further if we were in charge,” Cross, of Oswego, later told reporters. Asked if Democrats had shown any willingness to discuss repealing or cutting the corporate tax, Cross said: “None at all. None at all.”
None at all? Hmm…
But Democratic Senate President John Cullerton has expressed an interest in looking into reducing the corporate rate, which jumped to 7 percent from 4.8 percent, in light of threats from several high-profile businesses to leave the state. […]
Cullerton has spoken on several occasions of lowering the corporate income tax rate in exchange for eliminating tax loopholes in a revenue-neutral fashion, said John Patterson, a Cullerton spokesman.
* Meanwhile, Laurence Msall, the President of The Civic Federation, is one of the media’s favorite go-to guys about our state’s budget and its pension problems. This is from his official bio…
As DCCA’s chief legislative liaison, Msall presented and successfully secured the passage of over 50 legislative initiatives including the tax and financial incentives used to retain the Sears merchandising group in Illinois, the creation of the State of Illinois tourism promotion program, the Illinois Enterprise Zone program, and reform of the State’s tax increment financing program.
So, Illinois TIFs were “reformed,” eh? Huh. OK. Did anyone tell the Chicago Reader?
* Msall helped pass a whole lot of business tax breaks that are now biting us in the rear. For instance, Sears…
In 1989 the state of Illinois needed to come up with a plan to keep Sears from moving out of state.
They came up with tax incentives. One of them was a property tax break program called an Economic Development Area (EDA) which took the money away from the D300 schools.
The EDA is set to expire in 2013. Sears is asking for a 15 year extension, which was then added as an amendment to SB 540
This Bill is set to be voted on October 25th, 2011.
* Most of the powers that be support this Sears EDA legislation. But as I’ve told you before, the local school district is hotly opposed…
“This is unusual in a way, for our part, to take a political side, but we are at a point right now where we are desperate,” Superintendent Michael Bregy said. “And because of what happened in the past with the Sears EDA being placed onto a bill and, at the 11th hour, almost being passed without any knowledge of our school district, we have taken a very vocal position in the issue because we have not been asked to be at the table.”
Bregy made those comments at a school board meeting earlier [last] month during which the board approved a contract with attorney Scott Nemanich of Hinshaw & Culbertson LLP to act as governmental relations counsel to the district. […]
“It’s not that anybody is against Sears. Our own parents in our district work at Sears. We’re not drawing a line in the sand against Sears,” Bregy said.
But a volunteer-based group, Advance 300 that’s affiliated with the district’s lobbying push sure looks like it’s “drawing a line in the sand against Sears.” From its website…
If the Sears EDA is extended, D300 will lose at least $14 million per year for the next 15 years that it should be getting in property taxes from the Sears property in Hoffman Estates. If we do not get that money the district, and our kids’ futures, will be devastated.
And its Facebook page is often a seething cauldron…
Tomorrow starts our call a ireesponsible lawmaker and invite them to our OCtober 13th Rally Day. Monday’s lucky invitee is Sen. Dan Kotkowski. Sen. Kotkowski’s bill - Seante Bill 540 is the bill that was amended to include the extension of the Sears EDA. While Sen. Kotkowski told D300 administrators that he would pull the amendment, he instead filed a motion for concurrence that could actually expedite the passage of the bill once the veto session starts on October 25th. Call the “Honorable” Senator today and ask him to join us at the October 13th Rally at Westfield so that he can explain to us why it’s better to pay greedy corporations than educate 21,000 kids!
Apparently, they need a lot more education money in that district because the group has a real problem with spelling errors.
* By the way, Ohio thinks it has an in with Sears. This is from the Columbus Dispatch…
In May, one week after initial reports about a possible Sears move, it was disclosed that the Sears chairman, billionaire hedge-fund manager Eddie Lampert, had bought a large stake in the Columbus-based discount retailer Big Lots. According to a filing with the U.S. Securities and Exchange Commission, the 1.3 million shares of Big Lots that Lampert acquired early this year were valued at $56.5 million.
The prospect of Sears becoming a central Ohio company could make “a lot of sense,” Columbus retail consultant Chris Boring said.
“Central Ohio is a hotbed for retail executives and retail consultants, especially with Ohio State graduating thousands of business graduates every year,” Boring said. “I think this would be a very fertile territory for Sears in terms of labor. The success of central Ohio’s other retailers speaks to that.”
* In other news, one can only wonder if this Supreme Court ruling will prompt the mayor to ask the General Assembly to change state law this fall or next spring…
The Illinois Supreme Court ruled that Chicago can’t collect amusement taxes from websites where tickets are resold.
In a victory for StubHub Inc., an online market for ticket resellers, the state’s high court said the city overstepped its home-rule powers when it required “agents” of ticket resellers to collect taxes owed on any markup over the face value of a ticket.
The city was seeking taxes, penalties and interest dating back to 2000 from StubHub and its parent company, San Jose-based eBay Inc., which acquired the San Francisco-based Internet firm for $307 million in 2007. […]
The circuit court bumped the case back to the Illinois Supreme Court, which ruled in an opinion issued Thursday that the state Legislature wanted “to allow Internet auction-listing services to opt out of any obligation regarding local tax collection. That is a policy decision this court is ill-advised to ignore.”
* Related…
* Quinn says he’s working on incentives for Ford: It’s not the first time Ford has received incentives to increase its workforce in Illinois. Since 2007, it has received at least $6.2 million in training funds and grants from the Large Business Development Assistance Program, according to the Illinois Corporate Accountability website.
* Quinn cites talks with Asian automakers; says Illinois can be US ‘electric vehicle capital’: He says he had a good meeting with the CEO of Mitsubishi at that company’s Tokyo headquarters, where he rode in an electric vehicle. He says he’s trying to persuade the company to build its electric vehicle business in Illinois.
* Quinn announces $78M state venture capital program
* Navistar cutting about 130 jobs in Fort Wayne: Navistar International Corp. is planning to lay off about 130 workers from its Fort Wayne operations by the end of the year as it continues consolidation to a new headquarters in suburban Chicago.
* Quinn says he’ll detail gambling objections this month
- Fed up - Thursday, Oct 6, 11 @ 12:50 pm:
Tell sears bye bye. It’s a dying company that has been mismanaged. Sears will join Woolworth Montgomery ward and Venture as poorly run retail companies that no longer exists. The only value left in sears is the property.
- just sayin' - Thursday, Oct 6, 11 @ 12:59 pm:
Tom Cross couldn’t “plan” his way out of a wet paper sack.
- 47th Ward - Thursday, Oct 6, 11 @ 1:00 pm:
Let Sears move to Ohio and they can die there. Bricks and mortar stores are so 20th Century. Sears has good brands in Kenmore appliances and Craftsman tools, but they insist on selling them only in their own stores, which is an outdated business model. Unless they dramatically reinvent their business, they won’t be around long enough to justify any tax incentive to keep them here.
As for Stub Hub, the price of a resold ticket already includes the amusement tax, doesn’t it? I’m not completely sure of how the tax is supposed to work, but somebody has already paid the amusement tax on the ticket before Stub Hub won the right to resell it. I think the court ruled the right way because we shouldn’t have to pay the amusement tax twice for the same ticket.
- wordslinger - Thursday, Oct 6, 11 @ 1:10 pm:
–Navistar International Corp. is planning to lay off about 130 workers from its Fort Wayne operations by the end of the year as it continues consolidation to a new headquarters in suburban Chicago.–
That’s not possible. Mitch would never allow that to happen. Someone call Don and Roma.
- wordslinger - Thursday, Oct 6, 11 @ 1:12 pm:
–Sears has good brands in Kenmore appliances and Craftsman tools, but they insist on selling them only in their own stores, which is an outdated business model.–
Actually, 47, they’ve started selling their brands in other stores — Kenmore, Craftsman, Diehard, Lands End.
There’s a lot of talk in the industry that they’re going to whack the company up, spin off the brands, that the sum of its parts is greater than the whole.
Seriously, does anyone see Sears as a player in 10 years?
- Rich Miller - Thursday, Oct 6, 11 @ 1:15 pm:
====Let Sears move to Ohio and they can die there. ===
How many white flags do you own, anyway?
- Fed up - Thursday, Oct 6, 11 @ 1:17 pm:
Some off sears brand names will live on but the stores will not survive. It’s criminal what has happened to the quality of the craftsman brand over the last 10 years.
- Rich Miller - Thursday, Oct 6, 11 @ 1:19 pm:
Sears has weathered quite a lot over the years. Try not to prematurely bury the undead, people. Thanks.
- wordslinger - Thursday, Oct 6, 11 @ 1:25 pm:
The locals revolt against the Sears tax break is very interesting. The state gives a break, but the locals have to pick up the slack.
Who’s to say they’re wrong? The property in question would have been prime for development in the years before September 2008, generating revenue for the locals and, who knows, perhaps more jobs than Sears has out there, with no breaks.
- 47th Ward - Thursday, Oct 6, 11 @ 1:27 pm:
===How many white flags do you own, anyway?===
Just the one with the blue W on it that I don’t get to hoist often enough.
Am I being defeatist? That’s not my intention. I’m tired of of the game with Company A threatening to move unless we prop them up. In some instances, it does make sense. I think keeping CME is important to our economy, but propping up a retailer with an outdated business model? I don’t think that’s a good investment.
These tax breaks simply take from one and give to another. The same voices that are outraged when individuals receive tax benefits are silent when we subsidize companies. On one had, we’re accused of redistributing wealth, on the other we’re accused of stifling business with confiscatory tax rates. I’m trying to stay in one lane even though being consistent on this subject is difficult.
A lot of took shots at Morthland’s bill the other day, but how is the Sears situation any different? Welfare is welfare. It’s either good or its bad.
How is this considered surrender? Surrender to what? Market forces? Tax fairness? Consistency?
- Chicago Bars - Thursday, Oct 6, 11 @ 1:33 pm:
47th Ward — The Stubhub case was about who has to collect the amusement tax on any amount over and above face value that a ticket sells for on Stubhub.
So in an extremely hypothetical case - If a season ticket holder has a $50 Cubs ticket, which includes 12% amusement taxes, lists it on Stubhub and sells it for $100, who is obligated to collect the 12% amusement tax on the $50 premium?
Brick and mortar ticket brokers in Chicago collect that cut on the premium and remit it,. Thanks to some stunning breakdown in legislative drafting and this decision it appears online brokers don’t have to in Illinois. Aka Amazon rules.
- OneMan - Thursday, Oct 6, 11 @ 1:42 pm:
More than anything Sears planning a HQ move with all the other issues they have going seems to indicate they may not be worth fighting for that hard.
- JBilla - Thursday, Oct 6, 11 @ 1:49 pm:
That $78 in State Backed VC money will attract exactly the businesses we need to get behind. Local, home grown small businesses that are happy to be living in the Great City of Chicago.
- Cassiopeia - Thursday, Oct 6, 11 @ 1:51 pm:
It is very hard to have any confidence in anything that starts out with “Governor Quinn today announced….”
Too many job creation numbers are hot air, wishfull thinking or just enough to qualify for grant or loan money. There is seldom any followup to what actually happens after the DCEO bureaucrats move on to the next announcement.
- soccermom - Thursday, Oct 6, 11 @ 3:08 pm:
Hey 47th — I disagree with your “welfare is either good or bad” position.
I think we would agree that welfare that supports, say, a young single mom who is going to school so she can get a good job is a good thing. It’s an investment in the future, and one that is likely to yield returns in a short time. We also would probably agree that unemployment compensation makes sense, to keep people afloat when jobs are tight.
Same idea with “corporate welfare” — let’s give it to the folks who are likely to use it to innovate and grow, and to those who have a track record that shows they have a decent shot at success once the current tough times are past us.
But handing out tax breaks to companies that are basically extorting cash from the state, and playing state against state in a zero-sum game that doesn’t create jobs (except for moving companies)? That’s a bad idea, in my opinion.
- reformer - Thursday, Oct 6, 11 @ 3:11 pm:
Kotowski’s new district extends west to the southeast side of Hoffman Estates. The new district, however, includes neither the Sears Center nor any Dist. 300 students. I suppose it would be cynical to say Kotowski is willing to make Village officials happy at the expense of D-300.
- Newsclown - Thursday, Oct 6, 11 @ 3:55 pm:
When Sears and K-Mart merged, everybody said it was like two drunks leaning against each other to totter down the street. I don’t have a marketing degree, but Sears as a store concept was all about their exclusive brands which gave excellent quality for a value price, with terrific service and support. If you sell all the unique brands in K-marts and other stores, what then is the reason to go to a Sears specifically any more? The merger boosted K-mart’s perceived quality a bit. Did nothing for Sears except dilute the branding and brand identity. I think regrettably that 47th Ward may in fact be prescient and that MBA-toting hipsters will dismantle Sears and strip it for parts (the brand lines), Gordon Gekko Style. Craftsman will Survive, Lands End will survive, they make sense as outlet and chain stores as well as web stores and Store-within-a-store centers at other retailers. But the internet and a downward price pressure from Walmart and the other big box discounters is killing the Sears we grew up with. This is also going to hurt malls, as I only ever go to the local mall to get to Sears. Withut a traditional Sears store as a major anchor, the malls will take even more of a hit.
Anyway, bribing Sears with tax breaks doesn’t solve the underlying problem. Sears just wants to use that extra money to cushion their transition to… well, whatever they think they are going to become. I think coddling them at this stage may be too late to get any ROI out of it for Illinois.
- Confused - Thursday, Oct 6, 11 @ 5:23 pm:
I’m still trying to get over the phrase “state venture capital program.”