Capitol - Your Illinois News Radar » A little perspective while the new tax package is unveiled
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
To subscribe to Capitol Fax, click here.
A little perspective while the new tax package is unveiled

Monday, Nov 28, 2011

* The latest rant from the Tribune editorial board

More broadly, this state has to revamp a tax policy that gives all employers incentive to leave the state, but tries to lure select employers to stay. The state imposed a whopping increase in personal and corporate income taxes early this year. Yet, as the Tribune reported Friday, since Gov. Pat Quinn took office he has pledged at least $636.5 million in tax credits, grants and training funds to companies to hire or to keep jobs in the state.

“All employers”? Really? How is the Tribune gonna leave? And when?

Snark aside, the story about the total incentives follows the usual pattern of focusing on the largest possible number. That $636.5 million is spread out over at least ten years, so the fiscal impact each year is minimal. And the Trib buried this valuable nugget deep inside the piece

[Greg LeRoy, executive director of Good Jobs First, a nonprofit that researches economic development subsidies] said he was pleasantly surprised by the cost per job on the 2011 packages. Many states, he said, offer more than $100,000 per job. A company in upstate New York, he added, got a package worth $1 million per job.

So, we have reasonable incentives? Really? Huh. That doesn’t jibe with the common refrain of “We’re so screwed up we have to offer huge bribes to keep businesses here.”

No Illinois incentive comes even close to the $100,000 per job that “many states” offer. And keep in mind that even that $100,000 is spread out over many years. The highest per-job incentive Illinois offered was spread out over 13 years

The state pledged nearly $61,000 for each of the 70 jobs Evraz Inc. North America promised to create in Chicago. That figure includes $4.2 million in tax credits the company can claim over the next 13 years and $50,000 in training funds.

And it’s not actually $61,000 per job because instead of 70 jobs, the company already has 100 employees in Chicago. And many of these jobs are high-paying executive positions.

We should definitely keep a watchful eye on these incentive programs, but let’s also put the annual cost in perspective.

…Adding… From our always valuable commenter Wordslinger

–More broadly, this state has to revamp a tax policy that gives all employers incentive to leave the state, but tries to lure select employers to stay.–

More than 60% of Illinois corporations don’t pay any state income tax. That would seem to be a marketing tool to attract business, not a reason to leave.

* Meanwhile, speaking of taxes, I told subscribers about this deal on Friday morning

House Democrats on Sunday offered a scaled-back, $250 million-a-year, tax-break package designed to keep Chicago’s two financial exchanges and Sears Holdings Corp. from moving out of Illinois.

The package would provide approximately $100 million in combined tax relief annually for CME Group Inc., which owns the Board of Trade and the Chicago Mercantile Exchange; and Sears Holdings Corp. It also proposes new tax credits for Chicago’s theater scene.

The 220-page amendment filed Sunday by Rep. John Bradley (D-Marion) has been tweaked so there will be a continuing source of revenue unlike earlier versions where taxpayers eventually would have been on the hook.

“The biggest change is we can now actually pay for this,” Bradley told the Chicago Sun-Times.

* The funding mechanism

The cost would be completely offset by a resurgence in state corporate income tax receipts that is expected with the expiration of a [federal] tax break that allows businesses to accelerate their deductions for capital investments through 2012, Bradley said.

* Details

The new package, like the earlier one, would reinstate companies’ abilities to use past net operating losses to offset corporate income tax liabilities, but only up to $100,000 a year. That tax break has been temporarily suspended to help ease the state’s budget crisis.

The estate tax deduction would rise from $2 million to $3.5 million over two years, rather than to $5 million, as had been proposed earlier.

The earned income tax credit for low- and middle-income families would rise from 5 percent to about 7.5 percent, rather than the 15 percent put forward earlier.

Personal income tax exemptions would be adjusted upward for inflation in fiscal 2013 only, but an earlier proposal to index the exemptions to inflation longer-term was dropped, Bradley said.

* But, there are problems

Leaders of Community Unit District 300 in Carpentersville have come out strong against the new plan to give Sears Holdings Corp. tax breaks, saying it goes against a tentative agreement reached two weeks ago.

“The rug has once again been pulled out from under 21,000 students at the last minute,” Superintendent Michael Bregy said in a statement late Sunday night. “We were so close to feeling that democracy still had a home in Illinois, and now we’re back to square one.”

How that will play out in Springfield will become clear this afternoon, when a House committee is scheduled to have the first public hearing on the new proposal.

* And the chief sponsor of the underlying legislation is, as always, pessimistic and unenthusiastic

The chief sponsor of the measure, House Majority Leader Barbara Flynn Currie, D-Chicago, told me on Sunday that she doesn’t yet know what’s in the deal and cautioned that it still may be too fat for the cash-strapped state.

“It sounds somewhat stripped down, but I don’t know how much stripped down,” she said. “I think that (the bill as first proposed) is a little top-heavy.”

“A lot of pressure” is coming from Mayor Rahm Emanuel and Gov. Pat Quinn to save the exchanges, Ms. Currie said. If the Legislature goes along, it “makes sense” to also help working people with a companion increase in the state’s earned-income tax credit, rather than just enacting “corporate welfare.”

The deal — if there is one — will be filed as an amendment shortly before the committee’s scheduled 1 p.m. meeting, Ms. Currie said. Asked if the votes are there for the House and the Senate to pass something when they convene for a one-day session Tuesday, she replied, “I don’t know.”

The full legislation is here.

- Posted by Rich Miller        

  1. - wordslinger - Monday, Nov 28, 11 @ 10:27 am:

    –More broadly, this state has to revamp a tax policy that gives all employers incentive to leave the state, but tries to lure select employers to stay.–

    More than 60% of Illinois corporations don’t pay any state income tax. That would seem to be a marketing tool to attract business, not a reason to leave.

  2. - DuPage Dave - Monday, Nov 28, 11 @ 10:33 am:

    This situation has reached the point of unintentional comedy. The state is struggles for funds, stiffs its creditors, including schools and social service agencies, passes dishonest budgets, denies contracted raises to its employees, and now presents hugely profitable businesses with free cash??

    Sorry to say but Quinn is way out of his depth here. But would Governor Brady have done any better? I think not.

    We can only wonder what type of deals Blagojevich would be making with CME and Sears were he still in office.

  3. - wordslinger - Monday, Nov 28, 11 @ 10:41 am:

    If the CME deal goes through, they’ll be able to tell their board they’ve found a funding mechanism for the $550 million the exchange has put up for the MF Global disaster.

  4. - Yellow Dog Democrat - Monday, Nov 28, 11 @ 10:49 am:

    What ever happened to “Budgeting for Results”?

    According to the National Conference of State Legislatures, every $1 invested in early childhood education returns $8 to the taxpayers.

    Every $1 invested in community-based care for seniors saves taxpayers about $10 in nursing home costs.

    What is the return-on-investment to the taxpayers for subsidizing CME and Sears?

  5. - Downstate - Monday, Nov 28, 11 @ 10:57 am:

    “60% of corporations don’t pay any income taxes”

    Again, is this ALL C-corps?
    S-Corps and LLC’s don’t pay taxes - their owners do.

  6. - spin cycle is def on! - Monday, Nov 28, 11 @ 11:00 am:

    expiration of the of the accelerated depreciation schedule doesn’t create a permanent revenue stream because the old federal d. schedule will go back into effect, but the state tax breaks being provided are permanent..and the new growth in corporate income tax revenues dry up in three years as a result of the temporary nature of the tax. Also, the amendment takes away all enforcement powers of the dept. of revenue–this thing is a corporate tax lawyer’s dream!

  7. - mokenavince - Monday, Nov 28, 11 @ 11:04 am:

    It looks like we we are no more screwed up than many other states. Everbody seems to have come to the conlcusion we need jobs.Even in Illinois we
    are finally agreeing we need jobs. Business also
    should realize how important American jobs are. Look at Dell they shipped jobs to Thailand only to find out their plant will be underwater for months.Lets keep work in America, the cheap goods we buy at Wal-Mart are costing us a ton.

  8. - dave - Monday, Nov 28, 11 @ 11:09 am:

    Hmm… so the “stripped down” version of the CME/Sears/everything else package basically leaves all of the CME/Sears stuff in, somewhat reduces the breaks for other corporations, and greatly reduces the breaks for working families.

    On top of that, this is “paid for” by pretending that the federal depreciation expiration is new revenue. It isn’t - it is and was expected revenue that could and should be used for other areas.

    So once again this bill is going to blow a major hole in the state budget that will devastate state services.

  9. - bored now - Monday, Nov 28, 11 @ 11:11 am:

    there’s no question in my mind that pat quinn is doing a better job for illinois that bill brady could have. given brady’s penchant for getting taxpayer monies for his private activities, what we could have expected from the republican was more hands in our pockets, with nothing to show for it. could brady have gotten along better with the speaker? or the majority leader? doubtful. it’s much more likely that bill brady would have been another governor hairdo, trying to put the legislative leaders “in their place.” all the while, he’d be making sure that he personally benefited from public funds, even if it screwed the rest of us. there’s no question in my mind that quinn is better than brady, none at all…

  10. - Ahoy - Monday, Nov 28, 11 @ 11:17 am:

    so is it paid for? or will it cost the State $250 million a year? Looks like they are saying two different things.

  11. - DuPage Dave - Monday, Nov 28, 11 @ 11:34 am:

    Thanks YDD for reminding me of “Budgeting for Results” — the latest and greatest Quinntacular plan to make doing nothing look like doing something.

    State agencies are now required to submit reams of data to justify spending a nickel on serving disabled children, or providing home care for the elderly or other services that Illinois and every other state provides.

    But somehow it is just OK to throw $250 million at profitable businesses.

    I’d love to see how that one fits into the B4R spreadsheet.

  12. - Rich Miller - Monday, Nov 28, 11 @ 11:42 am:

    ===State agencies are now required to submit reams of data to justify spending a nickel on serving disabled children, or providing home care for the elderly or other services that Illinois and every other state provides.===

    You’re way overstating it, but making sure state programs actually produce results would be a good thing.

    ===But somehow it is just OK to throw $250 million at profitable businesses.===

    That’s a legislative decision. You’re a bureaucrat, so deal with it. You want to be a legislator, pass petitions and run.

  13. - Shock & Awww(e) - Monday, Nov 28, 11 @ 12:59 pm:

    Running through HAM003 at the moment. Looks like a few ornaments may remain (such as the “live theater production tax credit”???).

    Be interesting to see what happens in committee today and what else is in the final draft.

  14. - bigdaddygeo - Monday, Nov 28, 11 @ 1:36 pm:

    As I recall, all corps (including S corps) and partnerships are required to pay some (2.5% or 1.5%) replacement tax. It seems to me that if 60% of corps don’t pay tax that is because the corps aren’t earning taxable income.

  15. - dave - Monday, Nov 28, 11 @ 1:54 pm:

    The new amendment basically means that the shareholders of CME get about $18000 per each and working families about $90 each from the tax package.

    And again, no, this isn’t “paid for.” It is only paid for if you somehow determine that the depreciation revenue is magically new revenue and not previously expected.

    So in other words… massive tax breaks, mostly for a couple of select corporations, which will mean even more budget cuts that working families will feel the brunt of.

  16. - JP - Monday, Nov 28, 11 @ 2:07 pm:

    “It seems to me that if 60% of corps don’t pay tax that is because the corps aren’t earning taxable income”

    And why, pray tell, do corporations neglect to declare income in the State of Illinois? Could it have something to do with our tax rate? Why not just sweep all the profits out of Illinois and invest in a friendlier tax regime?…which is, of course, what is already happening


  17. - Rich Miller - Monday, Nov 28, 11 @ 2:23 pm:

    ===And why, pray tell, do corporations neglect to declare income in the State of Illinois? ===

    Single sales factor, federal tax issues, etc. Lots of reasons. No need to go all tinfoil hattish on us.

  18. - Jaded - Monday, Nov 28, 11 @ 3:05 pm:

    SB 397 has never been to the floor, so this can’t be a “one day” session. It will have to be read on second tomorrow and then on third Wednesday unless they have perfuntory today which I don’t see scheduled.

  19. - Rod - Monday, Nov 28, 11 @ 3:36 pm:

    Assuming the $100 million tax break per year cited by Rich above for the CME is the actual number,that would be interesting because in the Tribune on Nov 9 the CME tax break number cited was approximately $85 million over two years, according to Rep Currie.

    So from Nov 9 to Nov 28 the tax break goes from about $42.5 million a year to $100 million a year or a 135% increase in the estimated yearly tax break to the CME. Now that boys and girls is real lobbying!

  20. - Dave - Monday, Nov 28, 11 @ 4:39 pm:

    That would be impressive lobbying, but the numbers they have been using are $100m for CME and Sears combined. $85m of that is CME.

  21. - DuPage Dave - Monday, Nov 28, 11 @ 10:43 pm:

    Rich- Thanks for the invite, but I can’t be a bureaucrat if I run in a partisan election. I’m planning on retiring one day so I’ll stay put.

    So in the meantime I’ll just make use of this fine blog to share my opinions on my off days and after work.

Sorry, comments for this post are now closed.

* Another lawsuit filed in Quincy veterans' home deaths: "For a year and a half, he loved that place. And it killed him"
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's stories

Visit our advertisers...






* State bond rating worst in nation — but at leas.....
* Gov. Rauner's DC allergy successfully treat.....
* Gov. Rauner receives Fletcher Award..
* Why Your Pension Is Doomed..
* Moody's gives Illinois finances a 'stab.....
* Illinois gets some breathing room from Moody's..
* Moody's has some good news on Illinois credit..
* Village recommends tax incentive for Elk Grove .....
* Gun rights advocate see Pritzker as a committed.....
* As rents soar, Democrats push new policies on a.....

* Cooling towers disinfected after bacteria at state building
* About 200 expected to lose Omaha jobs with office closing
* Owners may demolish pyramid home in Illinois after fire
* Chicago’s John Marshall Law School to merge into UIC
* Arkansas man sentenced for selling guns in Chicago area
* All aboard: Indiana town’s railroad-themed area adds caboose
* Fire, water damage made result in Pyramid House demolition
* Judge: Religious nonprofit exempt from unemployment taxes
* Judge in court as a defendant in misdemeanor gun case
* Report: Lake oil spill in Michigan would cost nearly $2B

* Marginal amounts of legionella detected in Stratton Building
* Moody's gives Illinois finances a 'stable' outlook
* Illinois Army National Guard soldiers return home
* Marginal amouts of legionella detected in Stratton Building
* Under the Dome Podcast: Gun bills, Quincy, Trump-Putin reaction
* Incumbents hold big fundraising leads in central Illinois legislative races
* Springfield man wins Illinois State Police logo contest
* Rauner 'deeply troubled' by Trump's Helsinki comments
* Rauner signs bill to ease physician assistant hiring
* Bill taking Illinois out of voter registration system vetoed

* What's up at United? Hope, if not profit.
* Northwestern cuts back amid budget shortfalls
* FTD shakes up leadership as it mulls sale
* China sinks money into U.S. hyperloop startups
* Moody's has some good news on Illinois credit

* ‘Thorn Birds’ author’s widower wins court battle over estate
* Mark Wahlberg wants to sell cars — buying Chevy dealership in Ohio
* Hoge & Jahns Podcast: Back in Bourbonnais for Bears training camp
* Taylor Swift, Jennifer Hudson, James Corden to star in ‘Cats’ film
* State building’s cooling towers disinfected after legionella bacteria found
* Trump ready to go all-in on taxing Chinese imports
* At least 13 die after duck boat capsizes in Missouri lake
* Man, 60, wounded in Lawndale shooting
* Person shot several times, critically wounded in Bronzeville
* Have fun in Chicago this weekend! July 20-22

* TreeHouse Foods moves 200 jobs from Omaha to Oak Brook, Green Bay
* Divers hunt for 4 after duck boat sinks in storm, killing at least 13 on Missouri lake
* In spite of all their woes, the Cardinals don't believe in sell-offs
* Turmoil slows rebuilding of Puerto Rico's power grid
* 25 years after Michael Jordan’s father was murdered, key questions still remain unanswered
* ESPN Bears reporter Jeff Dickerson takes leave to care for wife, son
* Roquan Smith's holdout, Allen Robinson's challenges and more
* Cubs closer Brandon Morrow on MRI results: 'Nothing that can't clear up with rest'
* Man killed in Gresham, 7 others wounded in shootings Thursday, early Friday
* LaVar Ball still not clear about JBA coach's discipline — or his plan for players' futures

» #660 PJ Morton & Opinions on Drake
» July 19, 2018 - Full Show
» Berwyn Homeowners Squeezed By School District Miscalculation
» How Conservatism Won In Wisconsin; Illinois Election Security; Special Olympics 50th Anniversary
» Illinois Prison Officials Accused of Abusing Transgender Inmate
» Money Machines: Billionaires Rain Cash — With Strings Attached?
» July 18, 2018 - Full Show
» Fast Food ‘No Poaching’ Clauses; Trade Wars & Farmers; Small Town ‘Brain Gain’
» 'Carnaval’ Festival To Highlight Latinx Stories In Theater
» The Cook County Sheriff Is Launching A Podcast On Opioid Addiction

* Counterpoint: His pick is bad news indeed for health care, women, consumers and unions
* Point: Kavanaugh is truly a 'judge's judge' and precisely what our nation needs
* Eugene Robinson: The 'deep state' stands between us and the abyss
* Marginal amounts of legionella detected in Stratton Building
* Moody's gives Illinois finances a 'stable' outlook
* Illinois Army National Guard soldiers return home
* Marginal amouts of legionella detected in Stratton Building
* Under the Dome Podcast: Gun bills, Quincy, Trump-Putin reaction
* Bernard Schoenburg: Bourne, Clark clash over missed votes
* Our View: Access to Narcan key to combating addiction

* Champaign shootings under investigation
* 3 men injured after semi crashes into box truck near Okawville, police say
* Decatur and Macon County neighbors: Obituaries published today
* VIDEO: Getzner officially opens Decatur facility with expansion in mind
* Showtime: Decatur competes for America in Bloom title after months of preparation
* Clinton AmVets Post 14 gets grant to build
* AWOL pig makes brief appearance near Delavan
* At least 17 injured as tornadoes sweep through Iowa
* Rick's Six: Tornadoes injure 17, quarry death, and new store opens in Northpark
* Belleville schools settle lawsuits alleging students with special needs were injured

* Croatian media: Forward Kalinic refused WCup medal
* Feder: FCC blasts Sinclair 'misrepresentation' in Tribune deal
* Cooling towers disinfected after bacteria at state building
* At least 11 die when duck boat capsizes in Missouri lake
* As camp begins, Bears QB Trubisky's sole focus is blocking out distractions

* Luis Gutierrez for Impeachment: Tru...
* House Approves Pro-ICE Resolution
* Liberal groups protest Trump but mostly st...
* Calendar Listings
* Ernst: President Trump 'not upholding ...
* House Democrats Reveal 2018's Slogan: ...
* House Dems, with Bustos' help, unveil ...
* Limbaugh laughs at Dems' midterm motto...
* Democrats Announce New Slogan for Midterms...
* 'For the People': House Democrats&...

* Gov. Rauner's DC allergy successfully ......
* No, The Failed Ninth Circuit Court Nominat......
* The Senate Feels Need to Oppose Turning Ov......
* Anti-money laundering reform needs more Re......
* The Senate delivered a rare, unified rebuk......

* Rep. Lieu: Trump's Statements in Helsi......
* Gov. Rauner's DC allergy successfully ......
* Sen. Duckworth weighs in on Trump's Su......
* Sen. Tammy Duckworth on breast-feed......
* Landscapers advocate for H-2B during Legis......

* The [Monday] Papers
* Immigrant Infants Too Young To Talk Called Into Court To Defend Themselves
* Does the Second Amendment apply to black people?
* Sinclair-Tribune Deal On Life Support
* The Cook County efiling system is not just slow and inconvenient, it is downright scary... a review, continued
* The Pitchfork Music Festival and more of the best things to do in Chicago this weekend
* Sarra Jahedi wants to welcome you into her family
* Free Walking Tours Of Uptown Entertainment District This Saturday
* Another piece of Chicago’s industry moves to far sout’east corner of city
* Beautify Clarendon Park With Your Neighbors

* Summit for Success: IDOT providing tools, opportunity for disadvantaged businesses
* Illinois Payrolls Jump +18,100
* Liquor Control Commission Underage Compliance Report for Cook County
* Gov. Rauner receives Fletcher Award from National Black Chamber of Commerce
* Nursing Home Violations for Second Quarter 2018

* The Motiv Ring is a fitness tracker for folks who hate fitness trackers
* The best electric skateboard
* Get up to speed on Python with this double-barreled course package
* Venmo refuses to say why transactions are public by default
* Samsung Galaxy Watch surfaces at FCC with support for all four major carriers
* The 2018 MacBook Pro has a problem with overheating
* Wearables vs. proctors: Test taking security in the era of constant connectivity

* The worst finishes in White Sox history
* White Sox Minor League Update: July 19, 2018
* Kopech fans nine for Charlotte
* Under the Radar: Tyler Danish
* MINOR LEAGUE BASEBALL: Mooresville's Watts signs with White ...
* Scouting report: White Sox vs. Seattle Mariners at Safeco Field
* Showing so far bodes well for Astros' road to repeat

Main Menu
Pundit rankings
Subscriber Content
Blagojevich Trial
Updated Posts

July 2018
June 2018
May 2018
April 2018
March 2018
February 2018
January 2018
December 2017
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005


RSS Feed 2.0
Comments RSS 2.0

Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller