* Greg Hinz reported yesterday that the Illinois Chamber doesn’t want to expand the sales tax to services, but can support an income tax rate above 5 percent…
[President and CEO Todd Maisch] said his members dislike both the idea of a wider sales tax and the “unconstitutional” aspects of applying it to some types of entertainment but not others. He conceded that eliminating the service tax extension could bump up the individual income tax, which under the GOP proposal would go from 3.75 percent to 4.95 percent, but he said the shift would be worth it.
“Most people get that game” of holding just below 5 percent, he said. “You might as well get to 5.02 or 5.03, if you’re at 4.95 or 4.99.”
The chamber also wants more money for roads, with a new dedicated revenue stream—Maisch leans against a gasoline tax hike in favor of something broader—and is vigorously against a pending clause in a proposed budget pushed by Republicans that would shift $266 million next year in road funds to public transit, mostly in Chicago.
Maisch conceded that shift aims to avoid making cuts in spending for the Chicago Transit Authority, Metra and other agencies that easily could translate into politically unpopular fare hikes. But diverting such funds “upsets a fragile consensus about how you divide transportation money.”
Maisch’s full letter to legislators is here.
* Also from Greg Hinz…
A new effort to revive the state’s Edge payroll tax credit has surfaced in Springfield, and while this one lacks the poison pill that made business groups hate an earlier version, there’s no guarantee it will pass amid the larger Capitol budget war.
The new version comes from Rep. Mike Zalewski, D-Chicago. It would extend the program, which expired April 30, but trim benefits for qualifying companies.
For instance, Edge recipients now are able to claim 100 percent of the cost of payroll taxes as a credit against their corporate income tax liability. Under the bill, the credit for net new employees in the state would be 50 percent of their payroll tax plus up to 10 percent for training costs. The 50 percent figure would jump to 75 percent if the facility involved was in an economically depressed area. The credit for retained employees generally would be 25 percent (plus the 10 percent for training).
The plan also toughens language to qualify, saying that applicants must provide evidence that the incentive was “essential” to making an Illinois facility price-competitive with locating in another state.
The June 30th clock is ticking loudly, but this amendment was filed to a House bill on 2nd Reading today. If they get a new Senate vehicle or zip this along right away, it’ll be worth watching.
* Retailers sue to stop Cook County soda pop tax
* Why States Are Struggling to Tax Services
* Press Release: IRTBA, Members of Industry to Testify on the Illinois House Floor Regarding Impact of Transportation Construction Project Shutdown - $345 Million and 43,000 Jobs in Jeopardy, New Analysis Shows