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* My weekly syndicated newspaper column…
It’s a fairly common Statehouse phenomenon that bills will zoom out of the Senate or the House and then flame out in the other chamber.
People in the other chamber don’t always care as much as the people who first sponsor the bills. Often, they also don’t want to be pushed around by the other chamber.
That explains part of what happened last week, when the Senate passed a major tax cut package with a supermajority of 36 votes and then the bill received only eight votes in the House — despite the fact that the Senate bill would cost just a few million dollars more than the House plan.
There’s far more to this failure than the usual House vs. Senate dynamic, of course. House Speaker Michael Madigan (D-Chicago) has declared neutrality on the bill, apparently because of a conflict of interest. Without the “Velvet Hammer” pushing hard for a hugely controversial measure, the House couldn’t get it done.
House Majority Leader Barbara Flynn Currie (D-Chicago) has made it clear that she’s skeptical of the repeated threats to leave the state by CME Group and Sears. Part of that tax cut bill would lower both companies’ taxes. House Democrats could have taken her public comments as a sign that Madigan was not thrilled with this tax cut idea.
House Republicans have been irritated with Senate Republicans all year, and vice versa. That irritation came to a head at the end of the spring session, when many Senate Republicans supported the workers’ compensation reform bill while House Republicans opposed it, and House Republicans backed the budget while Senate Republicans all voted against it.
The House GOPs say their Senate counterparts undercut them again on last week’s budget deal, and they were furious that nine Senate Republicans voted for the tax cut bill after House Republican Leader Tom Cross (R-Oswego) made it clear that he and his caucus were opposed.
Cross’ opposition was certainly a major factor in the bill’s overwhelming failure in the House. The Democrats say they had 38 of the 60 votes needed to pass it, but almost all of them bolted as soon as they realized that the House Republicans wouldn’t be supporting the bill. There’s no sense in being on record supporting a controversial bill when nobody else is.
Cross said his caucus had problems with the Senate’s increase of the state’s earned income tax credit, which was higher than the House version, as well as the Senate’s indexing of the standard income tax exemption to inflation. Cross also said he didn’t believe that CME Group’s new tax levels ought to be as low as the company claims.
Democrats in both chambers believe that Cross has some ulterior motives for opposing the tax bill . They point to everything from big CME Group campaign contributions to Democrats, to big Cross contributors, to campaign politics related to Sears’ portion of the bill.
Nobody offered any proof of any of their allegations, of course, but there’s no doubt that Cross holds the cards here, and he doesn’t appear to be cooperating. Cross said he’d put 30 votes on a revamped proposal that eliminated all tax relief for the working poor, but the Democrats say they’d only get 10 to 15 votes for such a plan, which would leave them far short of a 60-vote majority.
So, where does the General Assembly go from here? Democrats in both chambers believe they need to put public pressure on Cross. That’s easier said than done. Democrats control the government, after all, and blaming the minority party is never a simple thing to do.
The Democrats tried to blame the GOP for the failure of the proposal to borrow money to pay off the state’s overdue bills, but it didn’t work. They’re still getting the blame for that. And the Democrats will undoubtedly wear the jacket if CME and Sears bolt the state for greener pastures, even if it isn’t their fault.
Some top Democrats believe that Chicago Mayor Rahm Emanuel must get more involved. Because Madigan’s neutrality means nobody with any real clout is pushing the tax cut bill in the House, Emanuel will have to take Madigan’s customary place.
* Related…
* Clock is ticking to keep Sears, CME in Illinois: “As much as I agree with my colleagues that the tax increases were the wrong way to go, in my opinion, even if the state hadn’t had the increase, we’d still be facing the same issues with CME and Sears,” said David Harris, R-Arlington Heights, the GOP spokesman on the House Revenue Committee. He and Bradley crafted the slimmer tax-break package, which never got a full vote.
* SUBSCRIBERS ONLY: Update on the tax cut talks
* CME meets with Indianapolis mayor as Emanuel kicks into high gear
* Business bidding war: Where will it end?: Harris said he isn’t sure there is a way to stop businesses from threatening to move. “That’s the kind of bidding war that exists out there among states,” he said. “If a business says ‘if you don’t give us X, we’re going to leave the state,’ we’re going to look at that and decide is it worthwhile keeping you here or do we let you leave.”
* Quinn: Get Sears deal done this year: “Rep. Bradley and Leader Cross had a very positive conversation this afternoon regarding a jobs plan with the goal of coming to a resolution in the next couple of weeks,” Cross spokeswoman Sara Wojcicki Jimenez said Friday. She said talks between the two were likely to continue into the weekend.
* Erickson: Even invoking Scrooge doesn’t get votes
* Finke: Legislature inching toward year-round work
posted by Rich Miller
Monday, Dec 5, 11 @ 6:04 am
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The WSJ article quotes a flack for Florida Gov. Scott saying that his state and Texas are the live alternatives to Chicago for CME, not Indy.
That makes some sense, maybe, as top CME execs could at least get out from under state personal incomes taxes.
But what’s the ROI for Florida or Texas on putting up money for the business? Without income taxes, you would figure it would have to be some kind of transaction tax on trades. That’s been Kryptonite to the exchanges forever.
Parisi from CME says everybody, including Chicago, is still in the mix. That’s quite a change from when Duffy told the House committee he wanted a decision before Thanksgiving.
Right now, you have to think CME is a little more concerned about the scrutiny from Washington over MF Global, and all the chatter about the need for regulation for the self-regulated exchanges.
For the time being, the smart move might be figuring out which location gives you more influence in Washington. And for the time being, that is unquestionably Chicago.
Comment by wordslinger Monday, Dec 5, 11 @ 8:11 am
Rahm and Madigan are still negotiating their interpersonal dynamic, it seems. I frankly expected Rahm to be more aggressive at this point but he seems to be holding himself in check and working more behind the scenes.
Comment by Gregor Monday, Dec 5, 11 @ 8:14 am
–House Speaker Michael Madigan (D-Chicago) has declared neutrality on the bill, apparently because of a conflict of interest.–
What’s the conflict? Does his firm represent Sears, CME, or both?
Comment by JBilla Monday, Dec 5, 11 @ 8:25 am
I am somewhat shocked and proud at the same time at Rep. Currie’s leadership on the issues discussed in this post. I think that she usually tries like hell to preserve some of her own autonomy while towing the Speakers line, but whether or not Madigan agrees with her or not on this corpoate welfare, she seems to have a good perspective on how this largesse will play out in her district and across the State. Well done Representative.
I’m glad she is sticking around, as some of the other women in the legislature that can
think for themselves and act accordingly
are hanging it up, (Garrett, May, Yarbrough) and I am sorry to see them go.
Comment by Borealis Monday, Dec 5, 11 @ 9:25 am
Additionally, Rahm needs to take a deep breath before descending into the Springfield morass that is the CME bill.
He has just passed a City budget that many citizens feel has been balanced by regressive tax and fee increases, big brother programs with boku fines for scoflaws, and a water use increase that has folks in Chicago and the suburbs
way peeved.
Now, they could see the Mayor’s actions on behalf of a well heeled, highly profitable insider club that helped him tremendously in his Mayoral fundraising as a simple case of high level back scratching, and in my opinion this would be spot on…
Comment by Borealis Monday, Dec 5, 11 @ 9:33 am
Whenever this topic comes up I can’t help but thinking of this:
“Money- it’s a hit. Don’t give me that do-goody-good &@^!%”
Comment by DuPage Dave Monday, Dec 5, 11 @ 9:44 am
Here’s another bit of info on the EITC that’s important to remember in ongoing discussions: The majority of families claiming the EITC do so only for relatively short periods of time, as a temporary support - they do not keep it for eons in a “culture of dependency,” as some critics might have you believe.
When families are able to earn more and leave the EITC’s eligibility limits, they do so - contrary to recent criticisms that households get stuck (or want to stay stuck) in EITC-land.
These findings are from a recent study conducted by economists for the federal Joint Committee on Taxation and Ball State University:
http://pfr.sagepub.com/content/39/5/619.abstract
One more reason we should increase this too-limited help that’s targeted at working-poor families. They’re using it as it’s intended: To help them through rough patches in their fiscal lives.
Comment by EITC guy Monday, Dec 5, 11 @ 9:51 am
Cross said that there isn’t money for individual tax relief (EITC) maybe there isn’t money for the increase in the Estate Tax Exemption. Some say that increasing that exemption creates jobs, but I don’t understand their rationale at all. I think about 900,000 families in Illinois claim an EITC each year and less than 2,000 people file estate tax returns in Illinois each year… Talk about helping a narrow few…
Comment by Anon Monday, Dec 5, 11 @ 10:16 am
Why is it a “failure” when government declines to give taxpayer money to rich people?
Seems like a success to me.
Comment by Carl Nyberg Monday, Dec 5, 11 @ 1:01 pm