* Subscribers knew about this development yesterday…
A big Downstate manufacturer is now seeking the same Illinois income tax incentives sought by Sears Holdings, according to several sources close to the legislative negotiations. The development came as Speaker Mike Madigan summoned the Illinois House to a special session next Monday.
Sources identified the Downstate company as Edwards County-based Champion Laboratories, one of the world’s largest makers of filters for industry and vehicles. Two key legislators said they believed Champion would hire additional workers in Illinois, if the tax incentives were approved. Voice mail messages left for a Champion Lab’s spokeswoman were not returned Tuesday evening.
Madigan’s summons to House members said the Revenue Committee would convene at the State Capitol Monday at 10 a.m. Sources said no final deal had yet been reached. But they hoped one would be ready for an up or down vote by the time legislators returned to Springfield.
Intense negotiations continued behind the scenes Tuesday on a series of proposed tax law changes. After discussing a possible move to Indianapolis with that city’s mayor last Friday, executives of CME Group were still hopeful that Illinois would grant them the same tax treatment it accords virtually every other corporation. Other companies are taxed only on what they sell in Illinois, not on their sales in other states or countries. If applied to CME Group, those rules would cut about $85 million annually from its Illinois income tax. CME Group is the corporate parent of the Chicago Mercantile Exchange and the Chicago Board of Trade.
Champion just bought another company and will likely be moving jobs to southern Illinois if this tax deal is approved.
…Adding… New York Times…
As states have struggled to balance their budgets by cutting services, laying off workers and raising taxes, a study to be released on Wednesday suggests that many profitable Fortune 500 companies have not been paying as much in state corporate income taxes as the average levied on American companies, with some big firms paying none at all in recent years.
A few companies, including DuPont, reported paying no state corporate income taxes from 2008 to 2010 even as they reported profits, according to the study, which was conducted by Citizens for Tax Justice and the Institute on Taxation and Economic Policy, nonprofit research organizations in Washington that advocate a more progressive tax code. (A spokeswoman for DuPont said that she had not seen the study, but that “DuPont complies with all tax laws and regulations” wherever it operates.) […]
To gauge how much Fortune 500 companies are paying in corporate income taxes, the study looked at the 265 of them that are both profitable and disclose their state tax payments. It found that 68 reported paying no state corporate taxes in at least one year between 2008 and 2010. All together, the study found that the companies reported $1.33 trillion in domestic profits from 2008 to 2010, but paid states only about half of what they would have if they had paid at the average corporate income tax rate of all states — reducing their state taxes by some $42.7 billion.
Matthew Gardner, the executive director of the Institute on Taxation and Economy Policy, said that state corporate-tax collections have dwindled for several reasons. Many states calculate their taxes based on federal corporate taxes, so some recent federal corporate tax breaks have lowered their collections. Other states have granted their own tax breaks to try to promote economic development, or to lure companies from other states. Companies, meanwhile, have grown adept at reducing taxes and finding tax shelters.
* Meanwhile, if true, this is totally disheartening…
A Milwaukee-based temporary staffing company has laid off nearly 500 employees in Illinois, blaming the high cost of the state’s workers’ compensation system.
An executive of Parallel Employment Group said Tuesday that the company cut jobs in Illinois because it wanted to lower its workers’ compensation costs.
Kirk La Du, executive vice president of operations, said the company, which also operates in Wisconsin and New York, incurred 87 percent of its total workers’ compensation costs in Illinois. The state accounts for about 35 percent of its revenues, he said.
“The only reason we are downsizing is competitive issues related to workers’ compensation,” La Du said. “It seems foolish to us to continue operating in a state where workers’ comp made it difficult to make money.”
Oy.
* However, there’s a happy ending for employees…
The “vast majority” of Parallel’s temporary roster will be reassigned to Andrews & Staff Force Inc., a staffing firm with multiple Chicago-area locations, Mr. La Due said.
* Other Illinois layoff announcements…
• The Chicago Transit Authority reported to the state it might eliminate 93 jobs as a result of a leaner 2012 budget
• Ameren Energy Generating Co., a St. Louis-based electric power distributor, will shed 53 jobs at its power plant in Meredosia, the Central Illinois town near the Illinois River. The plant was selected as the site of FutureGen 2.0, a project in conjunction with the U.S. Department of Energy’s clean-coal power program that the company claimed would bring 900 jobs to the area. But Ameren said it’s pulling out of the project.
• Syms Corp., the Secaucus, N.J.-based parent company of Filene’s Basement LLC, will shed 107 jobs when it closes Filene’s Basement stores on State Street and Michigan Avenue. The company declared bankruptcy in early November, after putting itself up for sale in May but finding no buyers.
• Tinley Park Mental Health Center in the south suburbs reported that it will close and eliminate 180 jobs, according to the state. But a budget deal last week would allow the facility to remain open through next June, according to the Department of Human Services.
• Roscor Corp., an audio and multimedia wholesaler in northwest suburban Mount Prospect, will lay off 102 employees, according to the report. Mitch Roston, the company’s co-owner, said the number of eliminated jobs was closer to 85 and that the company maintains between 35 and 40 employees. He said Roscor is suffering in the poor economy and will undergo a restructuring.
• General Automation Inc., a north suburban Skokie-based manufacturer, will shed 65 jobs in a company consolidation. A company human resources employee declined to comment.
• USA 3000 Airlines, a small Newtown Square, Pa.-based carrier that operates at O’Hare International Airport and flies mainly to Mexico, warned of a possible layoff of 86 employees in the event of a company sale. A representative did not return a call for comment.
• Computer Sciences Corp., a computer programming company in west suburban Oakbrook Terrace, will eliminate 79 jobs due to poor business conditions.
- west side don - Wednesday, Dec 7, 11 @ 10:07 am:
This race to the bottom between the states is pathetic and embarrassing. There is no chance the CME group moves to Indianapolis. You really think people with a mansion on the north shore are going to relocate to Indiana? No, not happening. Call their bluff governor, show some ca-hones.
- Grandson of Man - Wednesday, Dec 7, 11 @ 10:11 am:
The story of so many Fortune 500 companies paying less in state corporate income taxes is sad, and it’s compounded by profitable corporations that want to leave Illinois due to taxes. I have to ask if I would do the same thing, if I was a corporation. What choice would I have, if top management and shareholders were involved?
What bothers me the most is the national economic problem. These corporations relocating to other states due to taxes does not seem to address the overall unemployment problem. It’s like shuffling things around but not fixing the national problem. If some states really lower their taxes and regulations, in the future will we have economic boom areas in these states with strong middle classes, while other states who don’t do the same will be economically down?
- wordslinger - Wednesday, Dec 7, 11 @ 10:11 am:
–Kirk La Du, executive vice president of operations, said the company, which also operates in Wisconsin and New York, incurred 87 percent of its total workers’ compensation costs in Illinois. The state accounts for about 35 percent of its revenues, he said.–
Read it and weep. For all the howling that some do about corporate income taxes that most businesses don’t pay, workers comp is the biggie that needs further reforms than were passed in January.
Doctors, are you on board?
- Grandson of Man - Wednesday, Dec 7, 11 @ 10:14 am:
==Read it and weep. For all the howling that some do about corporate income taxes that most businesses don’t pay, workers comp is the biggie that needs further reforms than were passed in January.
Doctors, are you on board?==
I think that these issues like workers compensation and regulations need to be addressed. People talk about regulations in a wholesale manner. I would think that regulations need to be addressed individually, to see which ones are worth keeping and which ones need to go.
- Plutocrat03 - Wednesday, Dec 7, 11 @ 10:22 am:
One would expect that someone in the leadership could create a list, ranked in importance to the future of the State and then fix things in an orderly manner.
But where is the profit in that?
- bdogg - Wednesday, Dec 7, 11 @ 10:40 am:
wait, wait, wait members of the ga! i want a piece of this action too! what about me???
- John Bambenek - Wednesday, Dec 7, 11 @ 10:41 am:
Wordslinger-
I think the doctors are on board… or more accurately got run over by the train of the reform passed earlier this year. If I recall, the only reforms that were passed was a 30% across-the-board reduction in their fees and that you can’t get hammered at work, fall down the stairs and get workers comp anymore.
Am I missing something?
- Bigtwich - Wednesday, Dec 7, 11 @ 10:48 am:
==Read it and weep.
I am unclear on the economic impact. It seems another firm is taking over their operations here.
- Marcus Agrippa - Wednesday, Dec 7, 11 @ 10:54 am:
Re: the temp staffing agency. The reality is that NONE of the employees are losing their jobs. The are all going to work for another staffing agency. That new staffing agency also has work comp insurance and can obviously afford to pay the premium. Maybe they run a better operation than Parallel. The remedy is to do away with the staffing companies and make the leasing employer responsible for it’s job site. Now there is no incentive for the employer to prevent injuries because the staffing service takes all responsibility for the claims.
- GA Watcher - Wednesday, Dec 7, 11 @ 10:56 am:
A hearing of the House Personnel & Pensions Committee has been scheduled for Sunday at 4 p.m. Does anyone know why?
- staffingcompany owner - Wednesday, Dec 7, 11 @ 11:00 am:
Not true on leasing employers having no responsibility for job site safety. All injuries are recorded on Osha log at the site of injury.A higher osha log rate means higher workers comp rates.
- Carl Nyberg - Wednesday, Dec 7, 11 @ 11:06 am:
Let’s eliminate all corporate tax breaks until the pensions are fully funded.
In fact, let’s write a constitutional amendment that all tax breaks for corporations are invalid in Illinois while the flat tax is in place.
The idea behind having the flat tax in the Illinois Constitution was that the tax rate would be equal for all and no one would avoid taxes through special rules.
But now we’ve got the special rules proliferating in an uncontrolled manner and we still have the flat tax.
- Flip - Wednesday, Dec 7, 11 @ 11:08 am:
@ Carl Nyberg: If there are no companies around to begin with, then there’s less revenue and it would take all the while longer to fund state pensions.
- Yellow Dog Democrat - Wednesday, Dec 7, 11 @ 11:22 am:
===. Other companies are taxed only on what they sell in Illinois, not what they sell in other states or countries. ===
This statement is so full of holes, I’m not sure where to begin.
- Its an income tax, not a sales tax.
- CME avoids paying income taxes for these electronic trades in other states or countries because it doesnt have a physical nexus in them.
- CME not only has a physical nexus in Illinois, but the servers on which those transactions occur are located in Illinois.
For CME to claim its somehow being treated unfairly is more than just a Whopper.
- Holdingontomywallet - Wednesday, Dec 7, 11 @ 11:30 am:
Don’t blame the corporations, blame the legislators. Corporations and businesses exist for one reason - to make $$$. They are playing with the cards they are dealt and they will take advantage of any situation that increases their profit. If you don’t like the “rules” of the game, change them. That is one reason we elect legislators. I don’t recall voting for any corporations, but I do recall voting for some politicians in Illinois. Forget about your campaign donations and represent the people for a change. Work on the “rules of the game” and quit picking winners and losers.
- Flip - Wednesday, Dec 7, 11 @ 11:31 am:
@Yellow Dog: You actually believe that CME alone should pay 6% of all corporate tax revenue in IL? If they leave and take the servers elsewhere you do realize that IL would collect zero, zippo, null, don’t you?
- Carl Nyberg - Wednesday, Dec 7, 11 @ 11:51 am:
Look, if Illinois is going to operate under the idea that corporations shouldn’t be taxes, let’s make this the law.
But rich people are being unreasonable to argue that their money shouldn’t be taxed as corporate profits and demanding that the flax tax remain in place.
Want the low (or non-existent) taxes on corporations? Fine. Give on the graduated income tax.
It’s just not true that everyone is hurting in this economy. People who want to screw over regular folk on bread and butter issues and people who want to give away the store to rich people are loving the bad economy. They are making real progress in building a bridge to the 19th Century.
- Dirt Digger - Wednesday, Dec 7, 11 @ 11:52 am:
If one is causing a mass layoff event it costs one nothing and is basically beyond disproof to blame it on [local government situation]. If anything we should be surprised that literally all layoffs in any given state are not laid at the feet of Taxes, Worker’s Comp, et cetera.
- Plutocrat03 - Wednesday, Dec 7, 11 @ 11:53 am:
Looks like the natural conclusion to a stupid policy.
When government picks the winners and losers by providing breaks to some but not all the shared burden becomes less fairly distributed.
The tax code is too complex, no one with income should pay nothing.
Unfortunately, the special interests own the state.
- Wumpus - Wednesday, Dec 7, 11 @ 12:02 pm:
I thought they fixed the workers comp system earlier this year? Wumpus Enterprises wants a tax break or he will take his fortune and leave the state. Ar eyou listenign Pat Quinn?
- lincoln's beard - Wednesday, Dec 7, 11 @ 12:11 pm:
I’m a little baffled as to how a temporary staffing firm could be driven out of business in this state by WC rates. They’re in the business of providing Illinois companies with Illinois workers. Aren’t all of their competitors also subject to the same WC system? Is someone successfully supplying Illinois companies with workers *not* subject to Illinois WC law?
- staffingcompany owner - Wednesday, Dec 7, 11 @ 12:37 pm:
I can not speak for the Parallel but I suspect they may have experience a significant employee injury that has cost them above their w/c premium. I also suspect that their unemployment rate was also raised on their Illinois payroll and is wiping out their profit at the company they are serving. Unfortunately this is not uncommon in the staffing industry as the cost of doing business in Illinois is on average 4% higher then neighboring states.
Staffing companies in Illinois follows all regulations as dictated by the state. No getting around that!
- Reyray - Wednesday, Dec 7, 11 @ 12:50 pm:
1/1/12 CME will begin accepting yuan as collateral. They are different and they will move. None of you understand traders vs. Corporate.
- Flip - Wednesday, Dec 7, 11 @ 1:05 pm:
Perhaps Reyrey could provide a translation as I believe his/her post must have been in Mandarin.
- Left Out - Wednesday, Dec 7, 11 @ 1:16 pm:
Income for the State of Illinois is estimated to increase by about $1B next year (maybe a bit more). The required funding for pensions will go up by about $1B next year. If we give CME, Sears, etc. a tax break and fund the pensions then all the money (the revenue increse) will have been spent. It looks to be that the taxpayers and everyone else will need to tighten their belt next year. Those who want more money for their pet project may be out of luck.
- Rufus - Wednesday, Dec 7, 11 @ 1:17 pm:
Computer Sciences Corp, CSC … Wasn’t that one of the three computer consulting companies that got big contracts from the Blago admin in 2003? the other two being Bearing Point and Accenture.(I think)
The end result of those contracts making CMS-BCCS take control of all computing activity, thus redirecting the agency funds to their coffers…
And all surpluses at the end of the year go back to the GRF for Blago to use as he pleases?
- Downstate - Wednesday, Dec 7, 11 @ 2:33 pm:
It’s “makers” vs. “takers”. Looks to me like the “makers” have decided that they are going to get in line now and join the “takers”.
Certainly can’t blame them - after all Quinn and others have been villifying the “makers” while giving everything they could to the “takers”. It seems that Quinn and his ilk only respect you if you are standing in line for something.
- Keyser Soze - Wednesday, Dec 7, 11 @ 2:42 pm:
With its resouces and geographic position if the world Illinois should be a very prosperous place, if only if…………..(fill in the blanks).
- mokenavince - Wednesday, Dec 7, 11 @ 2:57 pm:
It’ about time our politicans got off their duffs
and realise we are losing jobs left and right. We
need workers comp reform not something written by a labor lobbyist. Quinn plays around with a gambling bill while Illinois suffers,Madigan seems to just want to protect trial lawyers. John
Cullerton who knows what he is thinking.What a sad stae of affairs.
- Nick - Wednesday, Dec 7, 11 @ 3:03 pm:
CME/CBOE and Sears are not going anywhere over state taxes.
- Retired Non-Union Guy - Wednesday, Dec 7, 11 @ 3:10 pm:
Rufus,
There may have been studies on computer consolidation in 2003 (they were almost continuous), but the whole idea was nothing new. The original enabling legislation to centralize all computing under the Governor’s agencies was enacted back about 1968/1969. At that time the designated “reception” agency for consolidation was the Department of Finance. Finance was one of the several agencies eventually merged into what became CMS. It just took 35 - 40 years to complete the Legislature’s intent.
- Mary Fioretti - Wednesday, Dec 7, 11 @ 3:11 pm:
Rich, When you say “the same as Sears” for the new company, do you mean ONLY State givebacks? Because Sears not only gets what the State has inintiated here, but also Community Unit School District 300 property taxes. I don’t believe there’s enough being said about how much they and Hoffman Estates are getting out of this deal.
- Rich Miller - Wednesday, Dec 7, 11 @ 3:41 pm:
When did I say “the same as sears”?
- Rod - Wednesday, Dec 7, 11 @ 4:24 pm:
Is there a cost estimate for a Sears type tax break for Champion Laboratories? In the last bill I do not recall there being any sunset for the tax breaks, will there be one in this bill?
Clearly the race is on, can you imagine the phone calls being made by companies asking members of the General Assembly for comparable tax breaks to be added to this bill.
- chi - Wednesday, Dec 7, 11 @ 10:45 pm:
The stats Parallell provides about there workers’ comp are rates are worthless without context. If their workers in Illinois are involved in more physical jobs than their workers in Wisconsin, they’re going to have higher workers’ comp rates here. They may have more injuries in Illinois than they’ve had in Wisconsin, driving their Illinois rates higher. Maybe lawyers cost more per hour in Chicago than they do in Waukesha. Maybe the workers are better protected here than in Wisconsin, so it’s worth it, especially since Illinois isn’t losing jobs because of the move.