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The Sears story may not be over

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Illinois

* So, last week Sears announced it would close 100-120 stores. The news prompted a media uproar in Illinois because the state had just given Sears some big tax incentives. Nevermind that the subsidy was designed to keep the headquarters in Illinois, not keep stores open.

But then, lo and behold, no Illinois stores were on Sears’ closure list when the list was released a few days later. Apparently, Gov. Pat Quinn reached out to the company…

Earlier [last] week, Gov. Pat Quinn said he hoped the state wouldn’t see many closures, given the large tax breaks the state just approved to lure the retail giant to keep its corporate base in Hoffman Estates.

“The governor had a good, long conversation with Sears CEO Lou D’Ambrosio [last week],” Quinn spokeswoman Brooke Anderson said Thursday. “And we’re pleased with today’s outcome.”

Does anyone else find it a bit odd that Sears originally said they were closing at least 100 stores and then produced a list of 79 stores slated for closure? I’m wondering whether Gov. Quinn merely forestalled the inevitable. If he did, that’s some temporary good news for those workers. I can’t argue with that. But this story may not be over.

* Meanwhile, the governor wants to get rid of something that he created when he signed the tax cut package into law…

Embedded in the legislation that gave tax breaks to Sears and the Chicago Mercantile Exchange was a measure to allow individuals and businesses to challenge tax assessments by using a third person, rather than going directly to the Department of Revenue. This “tax tribunal” must be operating by 2013, under the law.

It’s something Gov. Pat Quinn says has no benefit to everyday homeowners, calling it “not No. 1 on my hit parade.”

“I can tell you I doubt very much a regular homeowner is going to be spending much time before a tax tribunal,” Quinn said. “This is more for big corporations with lots of lawyers and accountants and people in three-piece suits that spend their lives trying to keep the corporations from paying their taxes.”

Background…

The law calls for a so-called tax tribunal to be set up by 2013. Details are still to be worked out, but the idea is to give taxpayers, whether individuals and businesses, the chance to protest assessments to someone not answering to the Illinois Department of Revenue, which assesses taxes in the first place and currently has last word on appeals.

The move is a way for Illinois lawmakers to show business interests they are serious about tax reform and fairness, said Senate Revenue Committee Chairwoman Toi Hutchinson (D-Olympia Fields), who sponsored the bill.

Currently, an Illinois taxpayer who wants to challenge an assessment may file a protest — but through the Revenue Department. An administrative law judge, a position created in 1995, hears the case, but the final decision is made by the Revenue director. A taxpayer may bypass the administrative review and challenge the assessment in circuit court, but the person or business first must pay the tax into a protest fund.

“If you want to challenge a decision by the Revenue Department, you have to challenge the people who said you were wrong,” Hutchinson said. “We’re looking for more fairness.”

Thoughts?

posted by Rich Miller
Tuesday, Jan 3, 12 @ 10:38 am

Comments

Rich, if I remember right one of the stories that ran on the Sears topic during the break said there would be more stores identified at a later date. The next thing I saw was the announcement that no stores in Illinois would be closed.

Comment by Dirty Red Tuesday, Jan 3, 12 @ 10:50 am
If the Marion store is still open in the next few years I’ll eat my hat.

Comment by Peter Tuesday, Jan 3, 12 @ 11:02 am
I bet Quinn just told Sears that if you announce a bunch of Illinois store closings so soon after getting your break, I’ll call the GA back in session and they’ll repeal it in a heartbeat.

Hard to believe you’d have to tell a CEO that, but there it is.

Comment by wordslinger Tuesday, Jan 3, 12 @ 11:06 am
Quinn pushes for a tax break for Sears to keep jobs in Illinois.

Sears doesn’t tell anyone they are planning on closing stores or they wouldn’t get the tax break.

After the tax package is finalized Sears announces closures.

Quinn now knows how it feels to have someone you contracted with back out of the deal. Oh…. is that something like Quinn reneging on the contractual agreements and MOUs he had with state employees over thier steps and raises?

How does it feel Governor?

Comment by Irish Tuesday, Jan 3, 12 @ 11:14 am
–“This is more for big corporations with lots of lawyers and accountants and people in three-piece suits that spend their lives trying to keep the corporations from paying their taxes.”–

By using lawyers and the 3-piece suits-aka lobbyists–is how Sears got their tax break in the first place, Governor.

Folks are over your phony populism.

Comment by King Louis XVI Tuesday, Jan 3, 12 @ 11:19 am
This couldn’t be an addition to the bill that would allow say, a law firm that handles tax cases to stand in for large companies and other wealthy clients, could it?

Let’s see who has such a firm….mmmmmm… Oh that’s right the Speaker does. Isn’t that ironic?
(snark)

What ethics?

Comment by Irish Tuesday, Jan 3, 12 @ 11:34 am
I worked for a number of years at the headquarters of a retail chain (not Sears). I learned years ago that the number of people working at HQ and in the stores is related. With a reduction in the number of Sears stores expect the number of workers at the Sears HQ to go down. With the political considerations in mind I would expect no layoffs. However, when people retire or die or find a better job etc. Sears not to replace them. As I remember the agreement with Sears, there are currently about 6100 people working and Sears said that they will keep no less than 4250 people in Hoffman Estates. The difference is slightly less than 2000 people.

Comment by Left Out Tuesday, Jan 3, 12 @ 12:43 pm
The Tax Tribunal system is great in theory, but poor in practice (certainly here in IL). Here’s why - take a look at a comparable, currently existing system “running” (well, sort of) here in IL.

It’s called the Property Tax Appeal Board. PTAB operates out of both Chicago and Springfield, and has review responsibilities over what happens on appeals made over local county board of review decisions.

The PTAB system was expanded to also cover Cook County a number of years ago.

The end result is currently an enormous backlog of appeal cases, where County boards of review just refuse to adjust tax assessments, on the basis that the taxpayers should just go file with PTAB. As a result, we have a huge and growing backlog of cases at PTAB awaiting disposition.

It’s literally so bad that last fiscal year, PTAB was one of just a very few state agencies that actually got an increase in head count. Not that it made a major difference, I’m told that the backlog is greater than ever, and still growing.

So now, we want to apply the same failed lesson (re: PTAB) to a new Tax Tribunal.

I know it’s bad, and probably unfair, but as a point, there are things the legislature can do to make the existing situation even worse. This is one of them.

Comment by Judgment Day Tuesday, Jan 3, 12 @ 12:47 pm
“Left Out” has a point at HQ. Sears knew Illinois would be watching how many stores were closed here. Which was a smart move not to close any in Illinois. But most people in Illinois don’t realize it will affect jobs in HQ.

Comment by 3rd Generation Chicago Native Tuesday, Jan 3, 12 @ 1:28 pm
@Judgment Day - I work close to the PTAB and see the mail carts lined up outside their offices periodically, as well as the processed paperwork in their neat banker boxes 4 high and 40 deep going out to storage or wherever. I do not envy the volume of work flowing through that office.

Comment by Colossus Tuesday, Jan 3, 12 @ 2:20 pm
Colossus, it’s bad, and getting worse. I’m not on the inside, but close - and if PTAB ever caught on fire, it would burn for weeks.

And it’s not getting better. PTAB really needs to start to look at alternatives, because they are getting hit with a tsunami of new appeals from Cook and from the collar / outer collar counties.

That’s why when I hear about this new “Tax Tribunal” idea, it’s BTDT (Been There Done That) moment all over again.

Comment by Judgment Day Tuesday, Jan 3, 12 @ 2:55 pm
No it isn’t odd that Sears identified less than 100 stores in its initial list of closures. There will certainly be more. Every business expands and contracts with economic pressures. Sears was a highly successful business for many years while competition has steadily increased. But businesses get old and unless they can redefine their in the market with new and attractive products and presentation, they will perish. This especially true in retail. Sears seems the goat only because of how successful they have been. They are only doing what any entity tries to do to survive and eventually thrive again. More stores will be shuttered including in Illinois. Just like a politicians will change stripes to stay in office. I hope Sears makes it. It will be better for very many people if it does.

Comment by Anonymous Tuesday, Jan 3, 12 @ 3:59 pm
I looked over the Sears list when it was published. They stated it was a partial list. I counted 25 states on the list; I don’t know if they operate in all 50, but I figured it was no mistake hey would wait on announcing the Illinois closures.

Comment by Pot calling kettle Tuesday, Jan 3, 12 @ 11:04 pm