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Budget deal at hand while tax cut package advances

Tuesday, Nov 29, 2011

* If you were watching yesterday’s ScribbleLive blog, you know there’s a new budget deal

Tinley Park Mental Health Center and six other state facilities would stay open in the short term and nearly 1,900 layoffs would be avoided under a deal struck Monday night, according to leading Democrats and Republicans.

The outline of an agreement was worked out in the Capitol office of Democratic Gov. Pat Quinn, who huddled with lawmakers from both parties for more than two hours.

Emerging from Quinn’s office, Senate Republican leader Christine Radogno said details are still being crafted, but a measure “will be very clear that the facilities are to stay open pending any kind of orderly transition of those that may need to close in the future.”

“We’ll avoid that chaos that we were afraid would happen with what the governor had proposed,” said Radogno, of Lemont.

* Some details

The agreement would keep the facilities open only for the remainder of this fiscal year, which ends June 30. Their long-term fates are still being reviewed, Vaught said.

Vaught said the agreement also calls for reducing state payments to a variety of special-purpose funds. The state’s $55 million contribution to the workers’ compensation fund, for instance, would be cut by $10 million. About $95 million that ordinarily would go to pension systems would instead be diverted to preventing the closures.

There would be enough reductions that some services in the Department of Human Services could get some additional money, Vaught said. The biggest beneficiaries would be community mental health services, which would get $30 million, and substance abuse programs, which would get $28 million.

* In other news, if you watched the House Revenue Committee hearing yesterday, you know that the tax cut package was approved, but it wasn’t exactly an enthusiastic approval

A $250 million corporate tax-break package aimed at keeping Chicago’s financial exchanges and Sears from bolting Illinois wobbled out of a House committee Monday amid signs the measure faces legislative trouble.

CME Group Inc., which owns the Chicago Board of Trade and the Chicago Mercantile Exchange, and Sears Holdings Corp. would stand to gain $100 million in tax savings under the legislation, which is poised for a full House vote after advancing out of that chamber’s Revenue and Finance Committee by a 6-0 vote. Democrats accounted for all of the “yes” votes, while two GOP members voted “present.”

* It didn’t help matters much that CME’s lobbyist didn’t show up

One Republican, Rep. Sandy Cole (R-Grayslake), went so far as to scold CME for not showing up at the hearing to answer questions from legislators despite the firm’s threats to move if state lawmakers don’t cut its $150 million state tax bill. Cole voted “present” on the package. The tax break also would benefit the Chicago Board Options Exchange, which also has threatened to move operations out of state.

“I’m really surprised they’re not here,” Cole said incredulously. “We’re talking about voting on this huge deal that they initiated … and there’s nobody here.”

A CME spokesman declined comment on the company’s absence, though the firm did put its support of Bradley’s amendment on the record.

* Leader Cross dumped all over the bill

Though the slimmed-down package was crafted in a bipartisan manner, by Rep. John Bradley, D-Marion, and Rep. David Harris, R-Arlington Heights, there appears to be continuing resistance from Republicans.

House Republican leader Tom Cross questioned how many more companies will come forward asking for tax breaks.

“If we do this tomorrow, who’s going to be knocking on our door next week? Who’s going to be knocking on our door in January? And everybody is going to say they’ve got a compelling case,” Cross said.

Illinois cannot keep going down a road that addresses one company at time, he said, arguing for a comprehensive rather than piecemeal approach.

Cross is mainly upset about Gov. Pat Quinn’s proposed add-ons

Quinn’s budget director, David Vaught, didn’t flatly oppose the tax package but told the committee “there’s a little more work that needs to be done to achieve more balance in the bill.”

* And Majority Leader Barbara Flynn Currie is about the most unenthusiastic co-sponsor imaginable

Currie, a co-sponsor of the bill, said she also has “serious questions about the top-heavy nature of this and whether we should jump whenever another state says it is going to take a business.”

“We’re here essentially because there are two companies holding a gun to our heads,” Currie said.

Harris, though, said the state is still on shaky financial ground.

“The state would be on (even) less firm financial ground if some of these large corporations decided to locate elsewhere,” he said.

* Meanwhile, District 300 types scored a victory over Sears and Hoffman Estates, but they still aren’t happy

Lawmakers’ preliminary approval Monday came at a sometimes contentious hearing where Community Unit District 300 officials continued to strike a nerve with state officials.

“I know that we have been a thorn in your side,” Superintendent Michael Bregy said near the beginning of his remarks. “We respect the difficult work that you do.”

Late the night before, Bregy sent out a scathing criticism of the most recent proposal. But most of his concerns were eased before the beginning of the hearing, and afterward, Bregy released a statement saying he was “reluctantly satisfied.”

“While we have achieved huge progress over the past few months, make no mistake that the end result was a huge compromise,” Bregy said. “We are reluctantly satisfied with the compromise plan. It is a very bittersweet victory for our community.”

Nevertheless, the school district’s unconventional lobbying techniques drew a rebuke from lawmakers of both parties. The committee chairman, Democratic state Rep. John Bradley of downstate Marion, raised his voice occasionally like an angry teacher in an unruly classroom, saying once he was “not happy” with District 300’s recent tone.

D300 spends over $10,000 a year per student. The school attended by Rep. Bradley’s kids spends a bit over $6,000. There wasn’t much sympathy for Bregy, but Bradley wisely held his tongue so he could get the deal done.

* Related and a roundup…

* Press Release: EDA issues clarified; D300 “reluctantly satisfied”

* Fun fact: District 300’s lobbyist

* D-300 ‘reluctantly satisfied’ with final EDA legislation

* Video: Bradley on CME tax breaks

* Editorial: ‘Crony capitalism’ finding a foothold in Illinois, unfortunately

* ADDED: Editorial: Illinois shouldn’t fix its pension problems by breaking promises

* Vote expected today to cancel pensions for one-day teachers

* Pension double dipping could end soon

* Video: Tom Cross, Bob Molaro and double dipping

* Editorial: What’s it going to take?

* Editorial: Make time for pension reform, action on waivers

* MEBCO Lawsuit Targets New Mississippi River Bridge, IDOT

- Posted by Rich Miller        

  1. - wordslinger - Tuesday, Nov 29, 11 @ 10:13 am:

    –“If we do this tomorrow, who’s going to be knocking on our door next week? Who’s going to be knocking on our door in January? And everybody is going to say they’ve got a compelling case,” Cross said.–

    Can’t argue with that.

  2. - JT11505 - Tuesday, Nov 29, 11 @ 10:30 am:

    “About $95 million that ordinarily would go to pension systems would instead be diverted to preventing the closures.”

    Um, isn’t it maneuvers like this that got us into the whole pension mess in the first place?

  3. - walkinfool - Tuesday, Nov 29, 11 @ 10:37 am:

    Bregy’s got the negotiationg style of Joe Walsh. Cooler heads prevailed, and D300 got a reasonable deal despite him.

    Rep D Harris, GOP lead in the Revenue Committee, not agreeing with Cross on this one? Curious. We’ll see how the House GOP caucus comes out.

  4. - Way Way Down Here - Tuesday, Nov 29, 11 @ 10:40 am:

    They didn’t show up! Tells you a little something there doesn’t it. I guess if it’s not important enough for CME to even send the hired gun; why should we care.

  5. - Wickedred - Tuesday, Nov 29, 11 @ 10:53 am:

    Robbing Peter to pay Paul in order to keep the facilities open. While I’m happy to hear they are trying to do something, this isn’t what was hoped for. Of course, most legislators didn’t want to take up a vote on a supplemental appropriations bill.
    And all it does is save things for six months. Come spring, the slashing will start again, and likely the people we serve won’t be as lucky. The fight is far from over.

  6. - Dirty Red - Tuesday, Nov 29, 11 @ 10:56 am:

    It amazes me that no one has publicly called on CME or Sears to make tax returns available to the public in order to receive these rewards. That said, not having handled corporate tax returns before, can anyone shed light on what it would take to make that happen?

    Further, no one on the Committee yesterday that became frustrated with D300 talked to Bergy about the disadvantage the district would be at if Sears were to move out of Hoffman Estates. Rich, I think you have made that point before.

  7. - wordslinger - Tuesday, Nov 29, 11 @ 11:07 am:

    Dirty Red, they’re all public companies. Twenty seconds on the google and you’ll be up to your eyeballs in annual reports.

  8. - Fed up - Tuesday, Nov 29, 11 @ 11:10 am:

    So they are taking 95million out of the pension fund that they have already shortchanged over the years. The state is like a reverse robin hood stealing from the poor and middle class to give more and more to the rich at the CME. Next year after the primaries madigan is going to blame the teachers cops and fireman and cut their pensions you know the ones he just stole from again.

  9. - Rich Miller - Tuesday, Nov 29, 11 @ 11:12 am:

    It’s not part of the required pension contribution.

  10. - mouthy - Tuesday, Nov 29, 11 @ 11:13 am:

    Sure take 95 million from the pension funds. Gutless.

  11. - Rod - Tuesday, Nov 29, 11 @ 11:29 am:

    Required or not $95 million that could go towards the pension system is not a little amount of money. It is sort of shocking that Henry Bayer jumped on board this deal. Here is his quote: “While we have not seen the details of the agreement announced tonight, we believe it is a positive step toward saving jobs and averting harmful cuts to health care, prisons and more.”

  12. - Yellow Dog Democrat - Tuesday, Nov 29, 11 @ 11:47 am:

    If Cross is going to publicly criticize corporate hand-outs, there is absolutely no reason for Democrats to agree to it.

    Plus, I kind of agree with Cross and the Illinois Chamber on this one: we’d be MUCH better off economically and fiscally if we closed the more than $1.5 Billion in corporate tax loopholes and used that money to provide broad-based small business and middle class tax relief.

    Government should not be in the business of picking winners and losers in the private markets, generally speaking, but rather creating a level playing field and a nurturing environment for all.

    The Governor of Delaware was on Morning Joe this am and when asked about his state’s economic success, blurted out the words “Great schools” almost before the question was finished.

  13. - 332bill - Tuesday, Nov 29, 11 @ 11:49 am:

    Rod, of course Henry Bayer jumped on the deal. 1900 layoffs means 1900 people not paying union dues.

  14. - bigdaddygeo - Tuesday, Nov 29, 11 @ 12:10 pm:

    It’s too bad Supt. Bregy didn’t get his demand to have the EDA audited. It would be an interesting precedent. What do you guys think would happen if every TIF in Illinois was audited separately from the jurisdiction it is associated with?

    What ever happened to the D300 spends $7.5 million to educate children of Sears employees claim on the web site?

  15. - Grandson of Man - Tuesday, Nov 29, 11 @ 12:15 pm:

    I don’t necessarily doubt that Henry Bayer doesn’t want to lose union dues, not at all. I was at this year’s AFSCME convention, and I saw rank and file workers tell of their fights to keep facilities open and keep their jobs and the services they provide, so this issue has some complexity.

  16. - wordslinger - Tuesday, Nov 29, 11 @ 12:24 pm:

    A couple of oddities in the CME bill.

    One, you have Currie, the co-sponsor, who sounds like she’s leading the charge against her own bill.

    Then you have this from the Sun-Times:

    –Bradley worked out the plan with the committee’s ranking Republican, Rep. David Harris (R-Arlington Heights), though Harris did not wind up voting on the package, citing a conflict of interest that he declined to specify. On his most recent state economic disclosure form, Harris reported having an associate membership with the Chicago Board of Trade, a valuable benefit that provides him with trading privileges.–

    So Harris has a conflict with voting on the package — but no conflict in putting it together?


  17. - Rich Miller - Tuesday, Nov 29, 11 @ 12:31 pm:

    ===So Harris has a conflict with voting on the package — but no conflict in putting it together?===

    It’s a good question, wordslinger, and I was hoping to follow up on this today.

  18. - Borealis - Tuesday, Nov 29, 11 @ 1:31 pm:

    I thought that for once, the legislators would protect their interest and the public purse.
    What a hopeful fool I have become in my middle age!

    A previous poster aked the question that isn’t this type of “solution” more of the same genius that got us into this mess?

    The answer of course is a resounding YES!

    I hope they all lose their primary race if they have one.

  19. - Kevin Highland - Tuesday, Nov 29, 11 @ 1:33 pm:

    Does this deal fund the Department of Revenue past February? I can’t imagine what game the legislature is playing when they fail to fully fund the agency that that is in charge of collecting the revenues that Ilinois needs to run!

  20. - Huh? - Tuesday, Nov 29, 11 @ 2:23 pm:

    About $95 million that ordinarily would go to pension systems would instead be diverted to preventing the closures.

    Does this mean the pension crisis is solved?

  21. - Sam I am - Tuesday, Nov 29, 11 @ 2:30 pm:

    As long as “double dipping” is being addressed, why not require offsets against state pensions (from any state system)for any subsequent state employment just like the federal employment system requires? Instead Illinois only addresses these kinds of rip-offs only after the media make them a scandal and then in the most minimal fashion available.

  22. - wordslinger - Tuesday, Nov 29, 11 @ 3:17 pm:

    Pretty healthy, bipartisan majority in the Senate for the CME/Sears deal — 36-18.

  23. - Allen Skillicorn - Tuesday, Nov 29, 11 @ 5:04 pm:

    “It’s not part of the required pension contribution. ”

    Please explain how that will help the pension mess?

    For the record, I support SB512 as long as the state keeps making all of it’s share of the future pension payments.

  24. - Anon - Thursday, Dec 1, 11 @ 9:16 am:

    If Sears leaves, wouldn’t they still own the property and pay taxes on it until (if) they can sell it? If Sears leaves, the EDA dies on time, after 25 years, and D300 would receive it’s full share of the taxes, no?

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