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* Many thanks to the Sun-Times for the hat tip. Subscribers were told about this late yesterday afternoon and then given more details this morning…
Gov. Pat Quinn and the four legislative leaders have settled on a framework to present to rank-and-file lawmakers on a tax-cut deal that could persuade two major Chicago-area employers from moving out of state.
The package is being circulated among the four legislative caucuses and could come up for a vote when lawmakers return to Springfield next week for the final half of their fall veto session. […]
The package, first reported in the Capitol Fax newsletter published by Sun-Times columnist Rich Miller, would be funded mostly through decoupling from the federal bonus depreciation law.
Under the terms of the tax-cut plan being considered, $100 million of that windfall would go toward Chicago-based CME Group over a two-year period. […]
Another chunk of the windfall would fund a $15 million state EDGE tax credit for Sears, which would enable the company to pocket half of what its existing employees pay in state income taxes and all of the income taxes paid by new workers. […]
Other businesses would benefit by reinstating a tax break on net operating losses that ended when Quinn and lawmakers raised state income taxes in January. That break would amount to close to $380 million.
Quinn also has sought to include a gradual increase in the earned income tax credit, which benefits the state’s working poor, and an inflation-indexed jump in the personal income tax exemption.
This may or may not be the final plan. Time will tell. What we have now is the general framework and the leaders appear to be in agreement. It’s up to the members now.
…Adding… Speaking of deals…
Chicago’s public school district and its teachers union announced a truce Friday in their fight over Mayor Rahm Emanuel’s campaign to lengthen the school day.
Under the agreement, Chicago Public Schools won’t ask additional district-run schools to lengthen their day this year beyond the 13 elementary schools that already voted to do so. In exchange, the union will drop its request for an injunction that aimed to block additional votes at other schools.
Chicago Teachers Union President Karen Lewis said “we’re not reverting anything back” with regard to those schools.
Emanuel persuaded the schools to lengthen their day by offering financial incentives, although the Illinois Educational Labor Relations Board recently voted to block negotiations with more schools.
posted by Rich Miller
Friday, Nov 4, 11 @ 3:38 pm
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…and the 1% wins again!
Comment by Bill Friday, Nov 4, 11 @ 3:42 pm
There are some bones for the 99 percent, Bill. And many businesses which qualify for the net operating loss thing are small businesses. Plus, they’re struggling. Eliminating that break was by far the worst thing about the January tax hike.
Comment by Rich Miller Friday, Nov 4, 11 @ 3:50 pm
I know. I just don’t see how they can make up that revenue.
Comment by Bill Friday, Nov 4, 11 @ 3:53 pm
Since you’re a subscriber, you know that it’s paid for, at least in the first year.
Comment by Rich Miller Friday, Nov 4, 11 @ 3:54 pm
At some point (I hope!) the economy will pick up. That alone will do more to fill the government coffers than any tax increase can do. If we could get unemployment down below 6%, we’ll finally get out of the fiscal mess we’re in.
Of course, there’s an equal chance we’ll just blow all of the new money away foolishly, but hey, this is Illinois. Rich would go out of business if things ran smoothly in Springfield.
Comment by 47th Ward Friday, Nov 4, 11 @ 3:57 pm
Rich, any idea on CME’s tax liability after these proposed changes as opposed to before? I’m just thinking if their fourth quarter is like the past three, even with the tax break they may see an overall increase in state tax paid vs. last year. If so it would make this somewhat more palatable.
Comment by anonymous Friday, Nov 4, 11 @ 4:05 pm
anonymous, the tax hike cost CME $50 mil. They pay $150 mil total to the state.
Comment by Rich Miller Friday, Nov 4, 11 @ 4:09 pm
I hope there are some contractual job retention and growth requirements around these tax cuts, as there usually are for EDGE credits. The devil will be in the details.
Certainly glad small businesses benefit from this as well. They, not the wealthy individuals or big corporations, are the real “job creators” in the US.
Comment by walkinfool Friday, Nov 4, 11 @ 4:31 pm
So the state is cutting them a tax break while raising our taxes???
Hmmmmmm….
Comment by ah HA Friday, Nov 4, 11 @ 4:46 pm
**Since you’re a subscriber, you know that it’s paid for, at least in the first year.**
Not all of it… this is still going to create a pretty big hole, even in the first year, and a much bigger hole after that.
Comment by dave Friday, Nov 4, 11 @ 4:47 pm
Yes, Dave, all of it. Almost none of the tax breaks are retroactive, including the biggest one, while the decoupling is.
Comment by Rich Miller Friday, Nov 4, 11 @ 4:52 pm
but what about the 2 percentage point increase in the personal income tax rate?
Comment by Michelle Flaherty Friday, Nov 4, 11 @ 4:54 pm
C’mon, that’s next year.
Comment by Rich Miller Friday, Nov 4, 11 @ 4:55 pm