SPRINGFIELD – The Illinois House reversed course and passed a big tax-break package Monday aimed at keeping Chicago’s futures exchanges and Sears from leaving the state, helping mid-size companies and doling out relief to the working poor.
The Senate-bound package, which is backed by Gov. Pat Quinn and Mayor Rahm Emanuel, was broken into two pieces after it flamed out in the House late last month, when it drew only eight votes.
Quinn, whose administration signaled his willingness to sign it if the Senate approves it Tuesday, described the package as one “that will bring much-needed relief to working families in Illinois and help employers put more people back to work.”
Emanuel heaped praise on the House for “passing vital tax reform to protect thousands of jobs and to keep the Chicago Mercantile Exchange and the Chicago Board of Trade here in their native city.”
House Republicans, who had been holdouts in that earlier vote, joined Democrats Monday in voting 81-28 to pass the legislation that would recalculate how CME Group Inc. and Chicago Board Options Exchange are taxed and extend state tax breaks for Sears Holding Corp. by another decade.
“It’s not jobs in the abstract,” said Rep. John Bradley (D-Marion), chief sponsor of the corporate tax-break package. “These are people, people who go to work and pay their taxes and get up in the morning and take care of their families. That’s what this is about: the people who work at those companies, the vendors who work for those companies, and the families they represent.”
Bradley’s legislation also targeted mid- and small-size businesses by extending tax breaks for research and development and net operating loss credits, granting more generous state estate tax breaks and including a $2 million tax incentive designed to draw pre-Broadway shows to Chicago’s theater district.
Thirty-nine Republicans supported the plan after accounting for only one of the eight votes on Nov. 29.
“It’s not a break. It’s not a credit. The reality is they’re being taxed on all of their trades, and that’s not fair. That’s not right,” House Minority Leader Tom Cross (R-Oswego) said of CME, whose trades are taxed by Illinois whether they occur in or out of the state.
While agreeing to the plan, Cross said it is only a temporary fix to a broader, more serious problem confronting a state with an unfriendly business climate because of high corporate tax rates and an unstable state budget weighed down by billions of dollars in increasing Medicaid and government pension costs.
“We are going to, on a daily basis, start hearing from corporations like Sears and others, saying, ‘We are going to leave,’ because our policies make other states drool at the opportunity to come in here and grab our companies and give them incentives,” Cross said.
In a statement, Sears expressed gratitude following the House vote, which it called a “major step in the process” toward keeping the company Illinois-based, and said it hopes the Senate will do the same. Sears, which employs 6,100 at its Hoffman Estates headquarters, would save $15 million a year for the next 10 years. A break on local taxes for its headquarters in the Chicago suburbs would also be renewed.
House Republicans were mostly missing in action on the other piece of the tax-relief package that passed 67-49. It would double the earned income tax credit available to the working poor and increase the standard exemption for all taxpayers by tying it to the rate of inflation.
Contributing: Sandra Guy