The state’s median income has not increased since 2008, according to numbers from the U.S. Census Bureau.
The median household income for Illinois in 2013 was $56, 210—the same as it was in 2008, the year that the U.S. financial collapse began. Illinois’ median household income is slightly higher than the national of almost $52,000, which has stayed relatively flat over the same time period. Stateline, an initiative of the Pew Charitable Trusts, crunched the state numbers into this handy map for state comparisons. Meanwhile, the average income for the state's top 5 percent of earners is $363,159. That number has increased by 6.4 percent since 2008.
According to Pew's analysis, most of Illinois' neighboring states saw an increase in median income. The exceptions were Indiana, which had a .9 percent decrease, Wisconsin, which had a 1.2 percent decrease and Michigan, which had a .7 percent decrease. However, the average household income for the top five percent of earners went up in all three states. Out of Illinois' neighbors, Iowa saw the largest increase for overall income at 6.6 percent. The state also saw a 16 percent jump for the top 5 percent of earners.
The states that saw the most growth nationwide, North Dakota and Wyoming, are also experiencing a natural gas and oil boom. In North Dakota the median income increased by 20 percent to $55,759, and in Wyoming it went up by 10 percent to $58,752.
For more on earnings and the income gap in Illinois, see Illinois Issues June 2014.
Showing posts with label business climate. Show all posts
Showing posts with label business climate. Show all posts
Thursday, September 18, 2014
Thursday, June 26, 2014
Legislative inaction threatens some corporate tax breaks
By Caitlin Rydinsky
After lawmakers were unable to agree on changes to the state’s business tax policies, some Illinois companies could lose a sales tax break set to expire this summer.
The Manufacturer’s Purchase Credit is a tax incentive that businesses can receive when they purchase equipment from companies within the state and use that equipment in Illinois. This benefit is set to expire in August. A rollback would impact about 500 businesses. According to expenditure reports from the Illinois comptroller’s office, the state spent almost $35,000 on the credit in fiscal year 2013. Mark Denzler, president and chief operating officer of the Illinois Manufacturers' Association, said that the expiration could result in employee layoffs and increased prices for some goods.
Lawmakers on a special House committee have been evaluating business tax breaks in the state. But, so far, they have been unable to come to an agreement on what should be done. The spring session ended without the legislature sending a business tax plan to Gov. Pat Quinn’s desk. Speaker Michael Madigan introduced legislation in the last days of session that would have extended the manufacturer’s purchase credit for six months. The plan also would have changed the high profile Economic and Development for a Growing Economy credit. The House passed the bill on the last day of spring session, but it was not brought up for a vote in the Senate. Democratic senators who sponsor the legislation said that they wanted to have more time to consider it.
“We are going to continue to work on things. The reaction is that this is something that needs to be reworked,” Madigan’s spokesman Steve Brown said. Lawmakers are expected to revisit the issue during the fall veto session. If they cannot reach consensus, the state’s Research and Development Tax Credit could be the next casualty. It is set to expire next year.
Arlington Heights Republican Rep. David Harris, who is on the committee, said that he thinks legislators will vote on the manufacturing credit during the veto session. But he said that other issues, such as the EDGE credit, the Franchise Tax and the Research and Development Tax Credit, would likely fall on the next General Assembly to address. Members of the next General Assembly are scheduled to be sworn into office in January.
Denzler is optimistic that legislators will restore the manufacturing credit in the veto session. But he said that their inability to reach agreement on many of the policies considered by the committee creates an unstable situation for businesses. “It just kind of continues the path of uncertainty and unpredictability.”
After lawmakers were unable to agree on changes to the state’s business tax policies, some Illinois companies could lose a sales tax break set to expire this summer.
The Manufacturer’s Purchase Credit is a tax incentive that businesses can receive when they purchase equipment from companies within the state and use that equipment in Illinois. This benefit is set to expire in August. A rollback would impact about 500 businesses. According to expenditure reports from the Illinois comptroller’s office, the state spent almost $35,000 on the credit in fiscal year 2013. Mark Denzler, president and chief operating officer of the Illinois Manufacturers' Association, said that the expiration could result in employee layoffs and increased prices for some goods.
Lawmakers on a special House committee have been evaluating business tax breaks in the state. But, so far, they have been unable to come to an agreement on what should be done. The spring session ended without the legislature sending a business tax plan to Gov. Pat Quinn’s desk. Speaker Michael Madigan introduced legislation in the last days of session that would have extended the manufacturer’s purchase credit for six months. The plan also would have changed the high profile Economic and Development for a Growing Economy credit. The House passed the bill on the last day of spring session, but it was not brought up for a vote in the Senate. Democratic senators who sponsor the legislation said that they wanted to have more time to consider it.
“We are going to continue to work on things. The reaction is that this is something that needs to be reworked,” Madigan’s spokesman Steve Brown said. Lawmakers are expected to revisit the issue during the fall veto session. If they cannot reach consensus, the state’s Research and Development Tax Credit could be the next casualty. It is set to expire next year.
Arlington Heights Republican Rep. David Harris, who is on the committee, said that he thinks legislators will vote on the manufacturing credit during the veto session. But he said that other issues, such as the EDGE credit, the Franchise Tax and the Research and Development Tax Credit, would likely fall on the next General Assembly to address. Members of the next General Assembly are scheduled to be sworn into office in January.
Denzler is optimistic that legislators will restore the manufacturing credit in the veto session. But he said that their inability to reach agreement on many of the policies considered by the committee creates an unstable situation for businesses. “It just kind of continues the path of uncertainty and unpredictability.”
Saturday, May 31, 2014
Efforts to change business tax climate fall short
By Caitlin Rydinsky
A last minute push to change a highly scrutinized tax credit used by large corporations failed to move forward in the Senate.
House Speaker Michael Madigan, who sponsored Senate Bill 364, said the measure would allow smaller businesses more opportunities to gain the Economic Development for a Growing Economy (EDGE) tax credit and improve job development in areas that have high poverty and unemployment.
In recent years, a handful of larger business have requested special versions of the tax credit from the legislature in order to keep them from moving out of the state. Some that received the credit did not hire new employees, and some even laid employees off. Rep. Jack Franks, a Democrat from Marengo, said “I found that particularly distasteful in previous EDGE deals where employers would be able to claim retention of employees while at the same time actually reducing head count, then we would subsidize the termination of tax paying Illinoisans.”
Supporters in the House said the bill was a good step toward stopping the state from giving special breaks to companies that can afford to lobby them and broadening the availability to EDGE credits for employers with less than 100 employees by eliminating a $1 million capital spending requirement. The legislation came after a special house committee that was weighing the tax climate for Illinois businesses was unable to reach a consensus on any substantial recommendations. “We had been hopeful of a broader based bill, but we ran out of time in this session and the purpose of the legislation is to have that available as we continue discussions over the summer and fall sessions,” Madigan said. “I happen to think it’s a real good opportunity for Illinois to make some significant, meaningful change in the business tax credit that will help Illinois business going forward.”
Rep. David Harris, an Arlington Heights Republican, said that a provision in the bill that requires companies seeking special edge credits to make financial disclosures would likely put a damper on them coming to lawmakers for a tailored tax break. “They have to provide information which is so onerous to companies, so distasteful for a company, that they would say ‘uh-huh I’m not putting that kind of information out there for the public to see.’ It effectively stops the company, unless they are going to do everything in the bill and my sense is no company would want to do, it effectively stops that special company from coming to us. It stops us from having to pick winners and losers,” Harris said.
But Barrington Hills Republican Rep. David McSweeney said lawmakers should be focusing on other ways to improve the business climate within the state of Illinois. “We should be cutting corporate tax rates and cutting tax rates for individuals and small businesses,” he said. “This continues the program that the government is going to pick winners and losers. We’re much better off cutting tax rates across the board.”
The House approved the bill on the final day of the spring legislative session, but the Senate did not bring it up for a vote. Decatur Democratic Sen. Andy Manar, a sponsor of the bill, said: “It’s a comprehensive piece of legislation that was introduced in the final weeks of session. I would expect that the Senate President [John Cullerton], the sponsor of the bill and the Senate would want to have thorough review before the Senate takes it up.” Although the legislation was not called for a vote in the Senate, Democrats said the legislation is still “on the table” and could be considered over the summer or in fall veto session.
A last minute push to change a highly scrutinized tax credit used by large corporations failed to move forward in the Senate.
House Speaker Michael Madigan, who sponsored Senate Bill 364, said the measure would allow smaller businesses more opportunities to gain the Economic Development for a Growing Economy (EDGE) tax credit and improve job development in areas that have high poverty and unemployment.
In recent years, a handful of larger business have requested special versions of the tax credit from the legislature in order to keep them from moving out of the state. Some that received the credit did not hire new employees, and some even laid employees off. Rep. Jack Franks, a Democrat from Marengo, said “I found that particularly distasteful in previous EDGE deals where employers would be able to claim retention of employees while at the same time actually reducing head count, then we would subsidize the termination of tax paying Illinoisans.”
Supporters in the House said the bill was a good step toward stopping the state from giving special breaks to companies that can afford to lobby them and broadening the availability to EDGE credits for employers with less than 100 employees by eliminating a $1 million capital spending requirement. The legislation came after a special house committee that was weighing the tax climate for Illinois businesses was unable to reach a consensus on any substantial recommendations. “We had been hopeful of a broader based bill, but we ran out of time in this session and the purpose of the legislation is to have that available as we continue discussions over the summer and fall sessions,” Madigan said. “I happen to think it’s a real good opportunity for Illinois to make some significant, meaningful change in the business tax credit that will help Illinois business going forward.”
Rep. David Harris, an Arlington Heights Republican, said that a provision in the bill that requires companies seeking special edge credits to make financial disclosures would likely put a damper on them coming to lawmakers for a tailored tax break. “They have to provide information which is so onerous to companies, so distasteful for a company, that they would say ‘uh-huh I’m not putting that kind of information out there for the public to see.’ It effectively stops the company, unless they are going to do everything in the bill and my sense is no company would want to do, it effectively stops that special company from coming to us. It stops us from having to pick winners and losers,” Harris said.
But Barrington Hills Republican Rep. David McSweeney said lawmakers should be focusing on other ways to improve the business climate within the state of Illinois. “We should be cutting corporate tax rates and cutting tax rates for individuals and small businesses,” he said. “This continues the program that the government is going to pick winners and losers. We’re much better off cutting tax rates across the board.”
The House approved the bill on the final day of the spring legislative session, but the Senate did not bring it up for a vote. Decatur Democratic Sen. Andy Manar, a sponsor of the bill, said: “It’s a comprehensive piece of legislation that was introduced in the final weeks of session. I would expect that the Senate President [John Cullerton], the sponsor of the bill and the Senate would want to have thorough review before the Senate takes it up.” Although the legislation was not called for a vote in the Senate, Democrats said the legislation is still “on the table” and could be considered over the summer or in fall veto session.
Thursday, May 29, 2014
Committee evaluating business taxes releases report, but reaches no consensus
By Caitlin Rydinsky
A House committee released a report Wednesday evaluating the tax climate for business in the state, but the group struggled to find common ground on several major issues.
The House’s Revenue and Finance Committee and State Government Administration Committee spent months assessing the tax incentives the state offers businesses months after House Speaker Michael Madigan requested a review at the end of last year. Madigan made the call after several businesses approached the legislature seeking specially tailored versions of the economic development for a growing economy (EDGE) tax credit.
The report looked at various taxes and tax credits, but the 28 committee members were unable to reach a consensus on several of the tax breaks they scrutinized. Some they agreed needed further evaluation were the franchise tax, the economic development for a growing economy (EDGE) tax credit and fees for limited liability corporations. Marion Democrat Rep. John Bradley, who chairs the revenue committee, said that the group found that the collection of some fees and taxes was not being enforced by the state. “The franchise tax are not being audited by the state; companies are not paying the fees and having no consequences, or they are placing taxable stock in other states in order to avoid paying taxes.”
Bradley and other lawmakers agreed it was not benefiting the current economy of the state, and said in the report “although the committee members have not reached a consensus on how to replace the current corporate franchise tax revenue, the working groups have agreed to repeal the corporate franchise tax.” Lawmakers and advocates for the industry and businesses felt that the bipartisan report could potentially provide more competitiveness between companies large and small and generate job growth. Representatives of the business community had generally positive reactions to the report. “I think it’s a very impressive report, and there hasn’t been a legislatively generated report of this sophistication in I don’t know how long,”said Dan Johnson, president and lobbyist of Progressive Public Affairs a company that represents small businesses and not-for profits. “It’s a very thorough report and on that it’s great. And I hope that there’s some action taken in the next few days.” However, members of the committees were unsure if their proposals would become legislation in the near future. “We made recommendations that are being presented in a bipartisan manner, and it will be up to leadership to decide what, if anything, would be part of a final package and make those decisions,” said Bradley of the findings.
While the EDGE credit is the incentive that likely spurred the group’s hearings on the issue, it was unable to reach any agreement on changing the credit. “No consensus was reached in regard to changes needed to the EDGE credit; however, all members feel that it is imperative to ensure that Illinois remains competitive in today’s economy,“ the report said. The credit has become controversial as several large businesses have threatened to leave the state if lawmakers would not adapt an EDGE credit specifically to them. Some who got the credit, which is meant to spur job growth, made layoffs after. Marengo Democratic Rep. Jack Franks said, “I wanted to focus on the small businesses that really are the job creators in the state of Illinois that have not been able to avail themselves of the EDGE credits.” Franks is the chair of the state government administration committee.
Madigan proposed House Bill 3890 earlier this month. The proposal would remove a requirement that businesses spend $1 million on capital investments to get the EDGE credit. The move would allow smaller companies to take advantage of the EDGE program. Franks said members of the committee are waiting to see what happens with the speaker’s bill. The legislation in its current form, could not make it through the standard legislative process and to the governor’s desk before session is scheduled to adjourn on Saturday. Franks said that he hopes that the committees’ ideas will take the form of bills sometime soon, perhaps in the fall veto session.
A House committee released a report Wednesday evaluating the tax climate for business in the state, but the group struggled to find common ground on several major issues.
The House’s Revenue and Finance Committee and State Government Administration Committee spent months assessing the tax incentives the state offers businesses months after House Speaker Michael Madigan requested a review at the end of last year. Madigan made the call after several businesses approached the legislature seeking specially tailored versions of the economic development for a growing economy (EDGE) tax credit.
The report looked at various taxes and tax credits, but the 28 committee members were unable to reach a consensus on several of the tax breaks they scrutinized. Some they agreed needed further evaluation were the franchise tax, the economic development for a growing economy (EDGE) tax credit and fees for limited liability corporations. Marion Democrat Rep. John Bradley, who chairs the revenue committee, said that the group found that the collection of some fees and taxes was not being enforced by the state. “The franchise tax are not being audited by the state; companies are not paying the fees and having no consequences, or they are placing taxable stock in other states in order to avoid paying taxes.”
Bradley and other lawmakers agreed it was not benefiting the current economy of the state, and said in the report “although the committee members have not reached a consensus on how to replace the current corporate franchise tax revenue, the working groups have agreed to repeal the corporate franchise tax.” Lawmakers and advocates for the industry and businesses felt that the bipartisan report could potentially provide more competitiveness between companies large and small and generate job growth. Representatives of the business community had generally positive reactions to the report. “I think it’s a very impressive report, and there hasn’t been a legislatively generated report of this sophistication in I don’t know how long,”said Dan Johnson, president and lobbyist of Progressive Public Affairs a company that represents small businesses and not-for profits. “It’s a very thorough report and on that it’s great. And I hope that there’s some action taken in the next few days.” However, members of the committees were unsure if their proposals would become legislation in the near future. “We made recommendations that are being presented in a bipartisan manner, and it will be up to leadership to decide what, if anything, would be part of a final package and make those decisions,” said Bradley of the findings.
While the EDGE credit is the incentive that likely spurred the group’s hearings on the issue, it was unable to reach any agreement on changing the credit. “No consensus was reached in regard to changes needed to the EDGE credit; however, all members feel that it is imperative to ensure that Illinois remains competitive in today’s economy,“ the report said. The credit has become controversial as several large businesses have threatened to leave the state if lawmakers would not adapt an EDGE credit specifically to them. Some who got the credit, which is meant to spur job growth, made layoffs after. Marengo Democratic Rep. Jack Franks said, “I wanted to focus on the small businesses that really are the job creators in the state of Illinois that have not been able to avail themselves of the EDGE credits.” Franks is the chair of the state government administration committee.
Madigan proposed House Bill 3890 earlier this month. The proposal would remove a requirement that businesses spend $1 million on capital investments to get the EDGE credit. The move would allow smaller companies to take advantage of the EDGE program. Franks said members of the committee are waiting to see what happens with the speaker’s bill. The legislation in its current form, could not make it through the standard legislative process and to the governor’s desk before session is scheduled to adjourn on Saturday. Franks said that he hopes that the committees’ ideas will take the form of bills sometime soon, perhaps in the fall veto session.
Wednesday, May 14, 2014
Madigan-backed EDGE credit changes advance
By Caitlin Rydinsky
After months of discussion on tax reform, the House Revenue and Finance Committee on Wednesday passed an amendment that would tighten the rules on a high-profile tax incentive for businesses.
The legislation, House Bill 3890, will change the requirements for the Economic Development for a Growing Economy (EDGE) tax credit. House Speaker Michael Madigan, who sponsored the bill, said it would allow smaller businesses to apply for the credits, retain jobs within businesses and help spur development in communities with high rates of poverty and unemployment.
Madigan admitted before the committee that the legislature “fell into a habit” of treating companies individually who could not use their EDGE credit—because they had no tax liability to the state—despite meeting all of the other negotiated qualifications within the credit. Lawmakers began evaluating the incentive, as well as others, after several businesses lined up for Special EDGE credits, to use the credit toward other tax liabilities. The legislation would eliminate the $100 million capital spending requirement for small businesses that employ fewer than 100 employees. The bill would require them to hire five new employees to gain the incentive.
Many opponents said they support eliminating the spending requirement for smaller companies, but that they do not agree with how it is being done. Doug Whitley, president and chief executive officer of the Illinois Chamber of Commerce, who opposes the changes, said, “This labyrinth of exceptions and limitations is so lengthy that I would suggest to you that almost no one is going to comply with this EDGE credit.” Whitley was critical that the measure would still require that lawmakers approve special EDGE credits. “ I thought you were trying to get out of that business,” he said.
While supporters of the tax credit said that it would increase the amount of small businesses that qualify, Carol Portman of the Taxpayers’ Federation of Illinois said that many small businesses don’t pay state income taxes, so she doesn’t see how much it would actually help.
Madigan’s legislation would give special preference to businesses in economically depressed areas. Some argue this may limit development throughout the state. Mark Denzler, vice president and chief operating officer of the Illinois Manufacturers Association, said that because the legislation looks at Census tracks instead of entire communities, a business in a struggling town might not qualify just because of its address. Denzler said that growth in depressed areas is important but that lawmakers should not turn away jobs in more affluent areas. “A job is a job. Do we really want to be discriminant against jobs?”
The most controversial piece of the proposal would require businesses receiving the special EDGE credit to publicly release tax information. Madigan said “the business must agree to disclose income tax information during the term of its EDGE agreement, including gross income, the amount of income allocated to Illinois and net income before and after credits are applied.” Denzler and others in the business community are fundamentally opposed to requiring companies to release tax information. Denzler noted that tax disclosure has been a popular subject for some Democrats, and he said he thought that the requirement might be “throwing a bone” to those who would like to see corporations have to open up their books to the public.
“I will say that what they what the speaker has done is limit … those entities that are going to come to the state and ask for that special treatment in allowing the credits to be used for withholding,” said the ranking Republican on the committee, Rep. David Harris, who is from Arlington Heights. “The way that it’s going to be limited is that those entities are not going to want to disclose all the kind of information that is asked to be disclosed. I have a problem even asking for that, but it’s limited strictly to the [special EDGE tax credit], so I don’t think this is a harmful move and [it] makes some positive reforms.”
After months of discussion on tax reform, the House Revenue and Finance Committee on Wednesday passed an amendment that would tighten the rules on a high-profile tax incentive for businesses.
The legislation, House Bill 3890, will change the requirements for the Economic Development for a Growing Economy (EDGE) tax credit. House Speaker Michael Madigan, who sponsored the bill, said it would allow smaller businesses to apply for the credits, retain jobs within businesses and help spur development in communities with high rates of poverty and unemployment.
Madigan admitted before the committee that the legislature “fell into a habit” of treating companies individually who could not use their EDGE credit—because they had no tax liability to the state—despite meeting all of the other negotiated qualifications within the credit. Lawmakers began evaluating the incentive, as well as others, after several businesses lined up for Special EDGE credits, to use the credit toward other tax liabilities. The legislation would eliminate the $100 million capital spending requirement for small businesses that employ fewer than 100 employees. The bill would require them to hire five new employees to gain the incentive.
Many opponents said they support eliminating the spending requirement for smaller companies, but that they do not agree with how it is being done. Doug Whitley, president and chief executive officer of the Illinois Chamber of Commerce, who opposes the changes, said, “This labyrinth of exceptions and limitations is so lengthy that I would suggest to you that almost no one is going to comply with this EDGE credit.” Whitley was critical that the measure would still require that lawmakers approve special EDGE credits. “ I thought you were trying to get out of that business,” he said.
While supporters of the tax credit said that it would increase the amount of small businesses that qualify, Carol Portman of the Taxpayers’ Federation of Illinois said that many small businesses don’t pay state income taxes, so she doesn’t see how much it would actually help.
Madigan’s legislation would give special preference to businesses in economically depressed areas. Some argue this may limit development throughout the state. Mark Denzler, vice president and chief operating officer of the Illinois Manufacturers Association, said that because the legislation looks at Census tracks instead of entire communities, a business in a struggling town might not qualify just because of its address. Denzler said that growth in depressed areas is important but that lawmakers should not turn away jobs in more affluent areas. “A job is a job. Do we really want to be discriminant against jobs?”
The most controversial piece of the proposal would require businesses receiving the special EDGE credit to publicly release tax information. Madigan said “the business must agree to disclose income tax information during the term of its EDGE agreement, including gross income, the amount of income allocated to Illinois and net income before and after credits are applied.” Denzler and others in the business community are fundamentally opposed to requiring companies to release tax information. Denzler noted that tax disclosure has been a popular subject for some Democrats, and he said he thought that the requirement might be “throwing a bone” to those who would like to see corporations have to open up their books to the public.
“I will say that what they what the speaker has done is limit … those entities that are going to come to the state and ask for that special treatment in allowing the credits to be used for withholding,” said the ranking Republican on the committee, Rep. David Harris, who is from Arlington Heights. “The way that it’s going to be limited is that those entities are not going to want to disclose all the kind of information that is asked to be disclosed. I have a problem even asking for that, but it’s limited strictly to the [special EDGE tax credit], so I don’t think this is a harmful move and [it] makes some positive reforms.”
Several factors at play in tax vote
By Jamey Dunn
The House plans to vote for spending before it takes up the issue of revenue, but a vote on extending the current income tax rate is just part of the budget picture.
House Speaker Michael Madigan said today that he hopes to first pass the spending portion of the budget, which would presume an extension of the temporary income tax. He said that the move is needed to help lobby lawmakers to approve tax rates needed to fund the budget. “Our purposes in advancing the budget first is to set the bar against which we will work to convince people to vote for the revenue.” House committees approved budget bills today that are based largely on Gov. Pat Quinn’s recommended budget.
Republicans say that the move “puts the cart before the horse.” Elmhurst Republican Rep. Dennis Reboletti said that businesses and families do not make their budgets by first deciding what they would like to buy and then figuring out how to pay for it. “We know what our income is. We make decisions based off of that. We don’t assume that we can buy a new house because we hope to have more money, but not have the additional revenue to pay for it.” Many Republicans argued today that a vote on a budget that spends more than the state expects to take in under current law would be unconstitutional. “It is on its face blatantly unconstitutional,” said Catlin Republican Rep. Chad Hays. “Who on planet earth budgets in this fashion? This is simply not done anywhere by anybody.”
But Chicago Democratic Rep. Greg Harris, who is chairman of the House human services budgeting committee, said that moving spending bills along is all part of the process and that the order in which it happens is not as important as getting the whole job done. “There are a lot of pieces of the budget which we have to pass,” said Harris. “I think we have until midnight on the 31st of May to reconcile all of this.” He said that if lawmakers can determine what services they think the state should deliver, then when it comes time to make revenue decisions, they can avoid asking for more than is needed. Harris was clear that he does not think that the state can get by on the current revenue projections that allow the income tax to begin stepping down in the second half of Fiscal Year 2015. Harris called the step down “a terrible financial cliff that we would drive the families of Illinois right off of.”
Republicans argue that Democrats are making the budget scenario under the current rates look muckh worse than it would need to be. “We on our side of the aisle feel very strongly that we can craft a workable budget without devastating extreme irresponsible cuts or reductions. We can craft a responsible budget without having the continuation of the tax,” Rep. David Harris, a Republican from Arlington Heights.
The House is expected to start taking votes on spending bills tomorrow. As Democratic leadership in the chamber works to get the support to stop the income tax rates from stepping down, other issues will likely come into play.
Rep. David Harris said that he expects that a comprehensive business tax reform package will emerge before the end of the month. Harris serves on a House committee that has held hearings over the last year on the business tax climate in the state. (House Speaker Michael Madigan presented a bill with changed to the EDGE tax credit to that committee today. See this blog post for the details.) Madigan said to the committee this morning that he would be willing to allow the corporate income tax rates to roll back if the proposal was tied to other changes. “I’m prepared to advance that bill, but as part of a balanced package,” Madigan told the committee.
Business friendly tax breaks tied to an extension of the income tax rates, or possibly just the individual income tax rate, would serve several political purposes. They could provide cover for Democrats who vote for a tax increase as part of an overall “tax reform” package. They could possibly be used to lure Republican votes on the income tax extension. More likely, Republican “no” votes on business friendly concepts could be used for negative campaign advertising and mailers before the November general election.
But Rep. David Harris says that he believes that the business tax plan will be separate from an income tax vote. He says that he thinks that the package would address such issues, as the franchise tax, incorporation fees and tax credits for manufacturers when the buy equipment. “I think it will be separate from the tax rate bill,” he said. Harris said that if it is tied to extending income tax rates, he does not think any Republicans would vote for it. “I think if it’s a business related package, they’re going to want some Republicans on the package,” Harris says. “I don’t consider an extension of the income tax [to be] tax reform.” He said that any business tax tweaks would likely be revenue neutral. So if some tax cuts are made larger or some taxes eliminated, other tax breaks may be scrapped or reduced. Some would call it closing tax loopholes. Harris, however, would not call it that. “Let’s not call them loopholes. Let’s call them, perhaps, exemptions or credits that we now give that may no longer be beneficial or helpful, or they don’t achieve the public policy that we initially intended them to achieve.”
Mark Denzler, vice president and chief operating officer of the Illinois Manufacturers’ Association, said that he thinks that the work on a business tax package is a mix of policy and politics. “I think it’s a combination of both. I think there’s some legitimate changes being made.” Denzler said that he has not seen a plan yet. “We’ll just see how things play out. We’ll have to look at a final package. ... I think that there can be some positives for the business community.” But he said that coupling an extension of the tax rates with some tax sweeteners for businesses would fall short of being a game-changing move when it comes to the state’s fiscal policy. “Ultimately, we think we need comprehensive tax reform. Making the income tax increase permanent and adding a few tax incentives is a little bit more of a Band-Aid quite frankly to the whole problem that Illinois faces.”
A few more tax issues could also end up in the mix. In his budget address, Quinn called for property tax relief and an incremental doubling of the Earned Income Tax Credit. Both of these options could be used to soften the blow of a tax rate extension and potentially pull some reluctant votes on to it. Under Quinn’s plan, homeowners would lose their current property tax credit and it would be replaced with a flat $500 refund for each owner occupied property. Quinn’s budget office estimates that such tax relief would cost $1.3 billion annually. The current credit costs about $600 million. While some homeowners currently get a tax credit that is larger than $500, Quinn’s staff said that 92 percent homeowners would be better off under his proposal. Quinn’s plan would also increase the EITC from 10 percent of the federal credit to 20 percent at a rate of 2.5 percentage points per year. The increase would cost more than $200 million annually once it reaches 20 percent. At the time of the address, Quinn and his staff were aggressively packaging his pitch to make the tax increase permanent as a reform of the state’s tax system. His proposal also included a five-year budget “blueprint” that calls for spending caps, a rainy day fund and cutting the state’s bill payment cycle down to 30 days.
When all else fails, pork spending—I mean, local construction projects—may also be an option to get votes on a tax rate extension. Democrats acknowledged today that they are also working on a capital construction bill. Quinn has been calling for a capital bill because the current plan, which was the first in 10 years, is about to run out. While Statehouse observers are always (justifiably) skeptical of the way that capital projects appear to be leveraged for votes, nobody can deny that work on Illinois roads and bridges is necessary and that many state facilities are in dire need of maintenance. What the funding stream for a capital bill would be is unclear at this point. Republicans warned today that it could come with more taxation. “There may be additional taxes out there to accommodate some of our other unmet needs,” said Hinckley Republican Rep. Robert Pritchard.
Madigan told reporters this morning that he is working the roll call for an extension of the tax rates. He said that he is not trying to strong-arm lawmakers. “We’re not in the business of issuing threats. ...We don’t engage in tactics like that. We try to work with people, persuade people, cajole people,” Madigan said. “We talk in terms of their view of where the sate should be, what the state should be doing for its citizens.” Madigan said.
When asked how many voted he still needed, he said that he was not to the point of knowing exactly how many members he still needs to persuade. While Senate President John Cullerton has predicted that session could adjourn early this year, Madigan indicated today that might not be the case. “There’s two and a half weeks left in the session. And we’ll be here. We’ll be on our job,” he said.
The House plans to vote for spending before it takes up the issue of revenue, but a vote on extending the current income tax rate is just part of the budget picture.
House Speaker Michael Madigan said today that he hopes to first pass the spending portion of the budget, which would presume an extension of the temporary income tax. He said that the move is needed to help lobby lawmakers to approve tax rates needed to fund the budget. “Our purposes in advancing the budget first is to set the bar against which we will work to convince people to vote for the revenue.” House committees approved budget bills today that are based largely on Gov. Pat Quinn’s recommended budget.
Republicans say that the move “puts the cart before the horse.” Elmhurst Republican Rep. Dennis Reboletti said that businesses and families do not make their budgets by first deciding what they would like to buy and then figuring out how to pay for it. “We know what our income is. We make decisions based off of that. We don’t assume that we can buy a new house because we hope to have more money, but not have the additional revenue to pay for it.” Many Republicans argued today that a vote on a budget that spends more than the state expects to take in under current law would be unconstitutional. “It is on its face blatantly unconstitutional,” said Catlin Republican Rep. Chad Hays. “Who on planet earth budgets in this fashion? This is simply not done anywhere by anybody.”
But Chicago Democratic Rep. Greg Harris, who is chairman of the House human services budgeting committee, said that moving spending bills along is all part of the process and that the order in which it happens is not as important as getting the whole job done. “There are a lot of pieces of the budget which we have to pass,” said Harris. “I think we have until midnight on the 31st of May to reconcile all of this.” He said that if lawmakers can determine what services they think the state should deliver, then when it comes time to make revenue decisions, they can avoid asking for more than is needed. Harris was clear that he does not think that the state can get by on the current revenue projections that allow the income tax to begin stepping down in the second half of Fiscal Year 2015. Harris called the step down “a terrible financial cliff that we would drive the families of Illinois right off of.”
Republicans argue that Democrats are making the budget scenario under the current rates look muckh worse than it would need to be. “We on our side of the aisle feel very strongly that we can craft a workable budget without devastating extreme irresponsible cuts or reductions. We can craft a responsible budget without having the continuation of the tax,” Rep. David Harris, a Republican from Arlington Heights.
The House is expected to start taking votes on spending bills tomorrow. As Democratic leadership in the chamber works to get the support to stop the income tax rates from stepping down, other issues will likely come into play.
Rep. David Harris said that he expects that a comprehensive business tax reform package will emerge before the end of the month. Harris serves on a House committee that has held hearings over the last year on the business tax climate in the state. (House Speaker Michael Madigan presented a bill with changed to the EDGE tax credit to that committee today. See this blog post for the details.) Madigan said to the committee this morning that he would be willing to allow the corporate income tax rates to roll back if the proposal was tied to other changes. “I’m prepared to advance that bill, but as part of a balanced package,” Madigan told the committee.
Business friendly tax breaks tied to an extension of the income tax rates, or possibly just the individual income tax rate, would serve several political purposes. They could provide cover for Democrats who vote for a tax increase as part of an overall “tax reform” package. They could possibly be used to lure Republican votes on the income tax extension. More likely, Republican “no” votes on business friendly concepts could be used for negative campaign advertising and mailers before the November general election.
But Rep. David Harris says that he believes that the business tax plan will be separate from an income tax vote. He says that he thinks that the package would address such issues, as the franchise tax, incorporation fees and tax credits for manufacturers when the buy equipment. “I think it will be separate from the tax rate bill,” he said. Harris said that if it is tied to extending income tax rates, he does not think any Republicans would vote for it. “I think if it’s a business related package, they’re going to want some Republicans on the package,” Harris says. “I don’t consider an extension of the income tax [to be] tax reform.” He said that any business tax tweaks would likely be revenue neutral. So if some tax cuts are made larger or some taxes eliminated, other tax breaks may be scrapped or reduced. Some would call it closing tax loopholes. Harris, however, would not call it that. “Let’s not call them loopholes. Let’s call them, perhaps, exemptions or credits that we now give that may no longer be beneficial or helpful, or they don’t achieve the public policy that we initially intended them to achieve.”
Mark Denzler, vice president and chief operating officer of the Illinois Manufacturers’ Association, said that he thinks that the work on a business tax package is a mix of policy and politics. “I think it’s a combination of both. I think there’s some legitimate changes being made.” Denzler said that he has not seen a plan yet. “We’ll just see how things play out. We’ll have to look at a final package. ... I think that there can be some positives for the business community.” But he said that coupling an extension of the tax rates with some tax sweeteners for businesses would fall short of being a game-changing move when it comes to the state’s fiscal policy. “Ultimately, we think we need comprehensive tax reform. Making the income tax increase permanent and adding a few tax incentives is a little bit more of a Band-Aid quite frankly to the whole problem that Illinois faces.”
A few more tax issues could also end up in the mix. In his budget address, Quinn called for property tax relief and an incremental doubling of the Earned Income Tax Credit. Both of these options could be used to soften the blow of a tax rate extension and potentially pull some reluctant votes on to it. Under Quinn’s plan, homeowners would lose their current property tax credit and it would be replaced with a flat $500 refund for each owner occupied property. Quinn’s budget office estimates that such tax relief would cost $1.3 billion annually. The current credit costs about $600 million. While some homeowners currently get a tax credit that is larger than $500, Quinn’s staff said that 92 percent homeowners would be better off under his proposal. Quinn’s plan would also increase the EITC from 10 percent of the federal credit to 20 percent at a rate of 2.5 percentage points per year. The increase would cost more than $200 million annually once it reaches 20 percent. At the time of the address, Quinn and his staff were aggressively packaging his pitch to make the tax increase permanent as a reform of the state’s tax system. His proposal also included a five-year budget “blueprint” that calls for spending caps, a rainy day fund and cutting the state’s bill payment cycle down to 30 days.
When all else fails, pork spending—I mean, local construction projects—may also be an option to get votes on a tax rate extension. Democrats acknowledged today that they are also working on a capital construction bill. Quinn has been calling for a capital bill because the current plan, which was the first in 10 years, is about to run out. While Statehouse observers are always (justifiably) skeptical of the way that capital projects appear to be leveraged for votes, nobody can deny that work on Illinois roads and bridges is necessary and that many state facilities are in dire need of maintenance. What the funding stream for a capital bill would be is unclear at this point. Republicans warned today that it could come with more taxation. “There may be additional taxes out there to accommodate some of our other unmet needs,” said Hinckley Republican Rep. Robert Pritchard.
Madigan told reporters this morning that he is working the roll call for an extension of the tax rates. He said that he is not trying to strong-arm lawmakers. “We’re not in the business of issuing threats. ...We don’t engage in tactics like that. We try to work with people, persuade people, cajole people,” Madigan said. “We talk in terms of their view of where the sate should be, what the state should be doing for its citizens.” Madigan said.
When asked how many voted he still needed, he said that he was not to the point of knowing exactly how many members he still needs to persuade. While Senate President John Cullerton has predicted that session could adjourn early this year, Madigan indicated today that might not be the case. “There’s two and a half weeks left in the session. And we’ll be here. We’ll be on our job,” he said.
Friday, April 25, 2014
What to watch: budget edition
By Jamey Dunn
Illinois lawmakers have had a two week break from the capitol, but they are scheduled to be back in session on Tuesday. As those who watch the legislature closely know, the action typically doesn’t truly get geared up until this point. But soon enough we will be immersed in the blur of activity that is May at the Statehouse. Here are some things to watch for on the budget front.
The General Assembly has until midnight on May 31 to approve a budget with a standard majority. After that time, any bills passed require a three-fifths majority to have an immediate effective date. Crafting a budget is not going to be easy this year. The temporary income tax approved in 2011 is set to begin its phaseout in the second half of Fiscal Year 2015. For months, heads of state agencies, lobbyists, public university presidents and others have come before budget committees to lay out what they say would be the dire consequences of the cuts that would be needed if the tax rates drop. Mass layoffs, facility closures, threats to public safety, spikes in K-12 class sizes and deep cuts to programs that provide care to seniors or children, have all been cited in the doom and gloom presentations.
Meanwhile, Republicans argue that the state’s budget outlook is being framed as worse than it really is. They say that Democrats are pushing a doomsday version of the budget to lay the ground work for making the temporary income tax permanent. “The Democrats’ approach this entire spring has been to try to create as dire a picture as possible,” said Palatine Sen. Matt Murphy. “You can make it a lot more plausible that you can fund core services and still allow the tax rate to go back down as the Democrats promised it would, but they don’t want people to see that. They don’t want that argument out there because they want to continue to get the money that they’ve been getting.” Democrats passed the increase without Republican support in 2011. It seems likely that if the want to extend the rates, they will have to go it alone again. House Speaker Michael Madigan told reporters this week that the votes aren’t there to pass it in his chamber. He said that extending the tax would be a “difficult role call.” “Every person in the legislature is going to be called upon to make a budgetary decision — either a reduction budget or an as-is budget or a slight-increase budget,” Madigan said. “And they’ll be called upon to vote for the money to support the budget that they want.”
Gov. Pat Quinn advocated for extending the current rates in his budget address. He also wants to give homeowners a $500 tax credit that he has dubbed property tax relief. Madigan and Senate President John Cullerton quickly backed the governor’s call for keeping the current rates.
A potential extension of the income tax rates is not the only tax talk legislators are going to have in the coming weeks. The sponsor of a proposal to allow the state to have a graduated income tax has said he plans to call his proposal for a vote next week. Oak Park Democratic Sen. Don Harmon’s Senate Joint Constitutional Amendment 40 would overturn the current provision in the state’s Constitution that requires Illinois to have a flat income tax. The plan would not set the rates for such a tax, but Harmon and other supporters have issued proposed rates framework. If the amendment makes it through both chambers, it would appear before voters on the general election ballot. But that seems unlikely. Harmon may be able to get the amendment through the Senate, but Madigan said that it is “significantly short” of the support needed to pass on the House. Two constitutional amendments — one that would voters from discrimination and another that would strengthen the role of victims in the judicial process — have already been approved by lawmakers and will appear on the November ballot.
Proposed tax changes relating to business in the state could also be on the way. A House committee has been focusing on the tax climate faced by Illinois businesses. The group has been taking testimony on the issue for months, but has yet to publicly present any ideas.
Before the break, a Senate committee approved a plan to change the way that the state funding is doled out to schools. Senate Bill 16 would focus more heavily on the financial need of districts. The proposal would also eliminate the individual block grant that is given to Chicago schools, something Republicans on the committee have supported. The plan would also require more spending transparency at the district level. The committee debate became heated when Republicans accused sponsor Sen. Andy Manar, a Bunker Hill Democrat, of rushing the process. The Illinois State Board of Education is working to produce numbers that would show how the changes in SB 16 would affect each school district. Republicans say that they do not want to vote on the plan until they have that information.
Manar said that lawmakers from both parties agree that the current funding formula does not work. “The idea that we can have a few premier school districts in the state that exceed every expectation ... and have an incredible number that lag behind and call that a win in the state system is not a win in my book.” The ideas behind the legislation came from a report complied by a bipartisan committee that spent more than a year considering the topic. However, Republicans say they were not involved in drafting SB 16. Manar hopes that there will eventually be bipartisan support for the bill. He says he introduced it when he did to spur debate. “We could have waited until the last week of May, negotiated behind closed doors, popped a bill out and then had a vote. That’s not the way to do this,” Manar said.
A gaming expansion always seems to be on the table as the end of spring session nears. But getting it done is a difficult task. Putting together a bill that will make all the powerful groups involved happy, or at least not irate, is a balancing act, so is figuring out how to spread around the potential revenues in a way that will please or at least appease lawmakers. And even when gambling expansions have passed, Quinn has vetoed them. This time around, the governor has made some positive comments about expanding gambling. “You’ve got to have strong ethical standards, and I think they need to be enforced, and it has to be done by the independent Illinois Gaming Board,” Quinn told reporters in early April. “I think we have kind of ironed that out. I think we’re on the right path.” The governor has said in the past that he would not support an expansion unless the revenues went to fund education.
Blue Island Democratic Rep. Robert Rita is sponsoring a bill that would allow for the creation of new casinos, including one in Chicago, and slots at horse racing tracks. However, when compared to past proposals, Rita’s bill would scale back the number of slot machines racetracks could have. Rita has another version that would only create a Chicago casino. The racing industry opposes both. It also seems that Chicago Mayor Rahm Emanuel will not throw his weight behind a Chicago casino plan at this point. Emanuel is echoing past statements from Quinn, saying that he will not focus on a casino until the city’s underfunded pension systems are addressed. The General Assembly already approved changes to the systems for city workers. Emanuel also wants changes to stabilize the systems for teachers, police officers and firefighters. Before they passed changes to the state’s pension systems, Quinn warned lawmakers not to be distracted by the “shiny” object of gaming legislation.
Check back for a guide on bills to watch as legislators make the final push toward the end of spring session.
Illinois lawmakers have had a two week break from the capitol, but they are scheduled to be back in session on Tuesday. As those who watch the legislature closely know, the action typically doesn’t truly get geared up until this point. But soon enough we will be immersed in the blur of activity that is May at the Statehouse. Here are some things to watch for on the budget front.
The General Assembly has until midnight on May 31 to approve a budget with a standard majority. After that time, any bills passed require a three-fifths majority to have an immediate effective date. Crafting a budget is not going to be easy this year. The temporary income tax approved in 2011 is set to begin its phaseout in the second half of Fiscal Year 2015. For months, heads of state agencies, lobbyists, public university presidents and others have come before budget committees to lay out what they say would be the dire consequences of the cuts that would be needed if the tax rates drop. Mass layoffs, facility closures, threats to public safety, spikes in K-12 class sizes and deep cuts to programs that provide care to seniors or children, have all been cited in the doom and gloom presentations.
Meanwhile, Republicans argue that the state’s budget outlook is being framed as worse than it really is. They say that Democrats are pushing a doomsday version of the budget to lay the ground work for making the temporary income tax permanent. “The Democrats’ approach this entire spring has been to try to create as dire a picture as possible,” said Palatine Sen. Matt Murphy. “You can make it a lot more plausible that you can fund core services and still allow the tax rate to go back down as the Democrats promised it would, but they don’t want people to see that. They don’t want that argument out there because they want to continue to get the money that they’ve been getting.” Democrats passed the increase without Republican support in 2011. It seems likely that if the want to extend the rates, they will have to go it alone again. House Speaker Michael Madigan told reporters this week that the votes aren’t there to pass it in his chamber. He said that extending the tax would be a “difficult role call.” “Every person in the legislature is going to be called upon to make a budgetary decision — either a reduction budget or an as-is budget or a slight-increase budget,” Madigan said. “And they’ll be called upon to vote for the money to support the budget that they want.”
Gov. Pat Quinn advocated for extending the current rates in his budget address. He also wants to give homeowners a $500 tax credit that he has dubbed property tax relief. Madigan and Senate President John Cullerton quickly backed the governor’s call for keeping the current rates.
A potential extension of the income tax rates is not the only tax talk legislators are going to have in the coming weeks. The sponsor of a proposal to allow the state to have a graduated income tax has said he plans to call his proposal for a vote next week. Oak Park Democratic Sen. Don Harmon’s Senate Joint Constitutional Amendment 40 would overturn the current provision in the state’s Constitution that requires Illinois to have a flat income tax. The plan would not set the rates for such a tax, but Harmon and other supporters have issued proposed rates framework. If the amendment makes it through both chambers, it would appear before voters on the general election ballot. But that seems unlikely. Harmon may be able to get the amendment through the Senate, but Madigan said that it is “significantly short” of the support needed to pass on the House. Two constitutional amendments — one that would voters from discrimination and another that would strengthen the role of victims in the judicial process — have already been approved by lawmakers and will appear on the November ballot.
Proposed tax changes relating to business in the state could also be on the way. A House committee has been focusing on the tax climate faced by Illinois businesses. The group has been taking testimony on the issue for months, but has yet to publicly present any ideas.
Before the break, a Senate committee approved a plan to change the way that the state funding is doled out to schools. Senate Bill 16 would focus more heavily on the financial need of districts. The proposal would also eliminate the individual block grant that is given to Chicago schools, something Republicans on the committee have supported. The plan would also require more spending transparency at the district level. The committee debate became heated when Republicans accused sponsor Sen. Andy Manar, a Bunker Hill Democrat, of rushing the process. The Illinois State Board of Education is working to produce numbers that would show how the changes in SB 16 would affect each school district. Republicans say that they do not want to vote on the plan until they have that information.
Manar said that lawmakers from both parties agree that the current funding formula does not work. “The idea that we can have a few premier school districts in the state that exceed every expectation ... and have an incredible number that lag behind and call that a win in the state system is not a win in my book.” The ideas behind the legislation came from a report complied by a bipartisan committee that spent more than a year considering the topic. However, Republicans say they were not involved in drafting SB 16. Manar hopes that there will eventually be bipartisan support for the bill. He says he introduced it when he did to spur debate. “We could have waited until the last week of May, negotiated behind closed doors, popped a bill out and then had a vote. That’s not the way to do this,” Manar said.
A gaming expansion always seems to be on the table as the end of spring session nears. But getting it done is a difficult task. Putting together a bill that will make all the powerful groups involved happy, or at least not irate, is a balancing act, so is figuring out how to spread around the potential revenues in a way that will please or at least appease lawmakers. And even when gambling expansions have passed, Quinn has vetoed them. This time around, the governor has made some positive comments about expanding gambling. “You’ve got to have strong ethical standards, and I think they need to be enforced, and it has to be done by the independent Illinois Gaming Board,” Quinn told reporters in early April. “I think we have kind of ironed that out. I think we’re on the right path.” The governor has said in the past that he would not support an expansion unless the revenues went to fund education.
Blue Island Democratic Rep. Robert Rita is sponsoring a bill that would allow for the creation of new casinos, including one in Chicago, and slots at horse racing tracks. However, when compared to past proposals, Rita’s bill would scale back the number of slot machines racetracks could have. Rita has another version that would only create a Chicago casino. The racing industry opposes both. It also seems that Chicago Mayor Rahm Emanuel will not throw his weight behind a Chicago casino plan at this point. Emanuel is echoing past statements from Quinn, saying that he will not focus on a casino until the city’s underfunded pension systems are addressed. The General Assembly already approved changes to the systems for city workers. Emanuel also wants changes to stabilize the systems for teachers, police officers and firefighters. Before they passed changes to the state’s pension systems, Quinn warned lawmakers not to be distracted by the “shiny” object of gaming legislation.
Check back for a guide on bills to watch as legislators make the final push toward the end of spring session.
Monday, April 14, 2014
Proposed ban on plastic microbeads could be model for other states
By Caitlin Rydinksy,
A bill approved last week by the Illinois Senate that would eliminate plastic microbeads found in hygiene products could become a national model for states looking to phase out the material.
Microbeads are small plastic particles, made of polyethylene or polypropylene, found in items such as body and facial scrubs and some toothpastes. After use, they are washed down the drain and released into waterways. The beads are so small that they make it through the filtration process at water treatment plants. They cause harm when fish and other aquatic life confuse them with food because of the resemblance in color and size to the microbes that they eat. Because they are made of plastic, which is not biodegradable, the particles do not dissolve once they are released into the environment. They float through the water or sink to the bottom once they have absorbed surrounding pollutants.
Researchers have found them in waterways, oceans and, overwhelmingly, the Great Lakes. The 5 Gyres Institute, a group that studies the global effect of plastic pollutants, found beads within the lakes. Early testing, which looked at Lake Superior, Lake Huron and Lake Erie, shows Lake Erie had more than two times the amount sampled within some areas of the ocean. The results of the study have spurred manufacturers to act. “Most of the major manufacturers that were presented with the research of the high abundance of these particles in the Great Lakes surface water responded by voluntarily phasing out plastic particles in their products and looking for alternative formulations,” said Olga Lyandres, research manager of the Alliance for the Great Lakes, a Chicago-based environmental organization. The alliance worked with The 5 Gyres Institute on the lakes study.
“Plastic microbeads are used in personal care cleansing products because of their exfoliating properties and excellent safety profile,” said the Personal Care Products Council in a prepared statement. “However, our industry shares a common interest with other stakeholders in protecting the environment, and we take questions regarding the presence of plastic microbeads in our waterways very seriously. While we believe plastic microbeads in personal care cleansing products represent a very small contributor to the overall plastic found in the aquatic environment, our industry is demonstrating leadership on this issue by publicly announcing plans to phase out the use of these ingredients.”
The study found remnants of other plastics including pieces of plastic bags. But the amount of microbeads and the fact that they are easily identifiable allowed researchers to point to a specific cause of pollution and request that companies transition to more environmentally friendly substitutes. Although many high profile companies, such as Johnson & Johnson and Unilever, have already started phasing out production of the beads, The Alliance for the Great Lakes is lobbying for Senate Bill 2727 to hold the companies to that promise.
States surrounding the Great Lakes and some coastal states, such as New York and California, have also considered bans. Those who negotiated SB 2727 say it could serve as an example for those states because it gives the industry years to find a substitute for the beads and allows retailers to continue selling their current inventory. Scrubbing products that do not contain microbeads have various other abrasive materials, such as silica, ground nutshells, rice, sugar or salt. SB 2727 calls for a ban on products containing the beads to begin in 2017 and a ban on the sale of such products by 2018. Mark Denzler with the Illinois Manufacturers Association said a phase out takes time. “You have to change the line production and get additional products for what you’re going to use,” he says. “So, really the debates are set on timelines when manufacturers have to stop producing it, and retailers have to stop selling it. That negotiation was sort of easy to accomplish.”
Chicago Democratic Sen. Heather Steans, who sponsored the bill, said that cooperation from the manufacturers has helped the measure gain broad support. The measure passed with no opposition in the Senate. “We phased it in to make it so the companies have time to handle it appropriately, but they really worked with us and we got to an agreement. So I think we probably pass it [in the House] as it got out, unanimously, here,” she said.
Results from the testing of Lake Michigan and Lake Ontario waters will be released later this month, but those close to the research predict the findings will be similar to the other lakes. While the industry, environmentalists and lawmakers are working together to phase out the beads, those already in the waters cannot be removed because of their small size. “Well, once they are in the water, they are there to stay,” said Lyandres. “They are very difficult to capture once they are released.”
A bill approved last week by the Illinois Senate that would eliminate plastic microbeads found in hygiene products could become a national model for states looking to phase out the material.
Microbeads are small plastic particles, made of polyethylene or polypropylene, found in items such as body and facial scrubs and some toothpastes. After use, they are washed down the drain and released into waterways. The beads are so small that they make it through the filtration process at water treatment plants. They cause harm when fish and other aquatic life confuse them with food because of the resemblance in color and size to the microbes that they eat. Because they are made of plastic, which is not biodegradable, the particles do not dissolve once they are released into the environment. They float through the water or sink to the bottom once they have absorbed surrounding pollutants.
Researchers have found them in waterways, oceans and, overwhelmingly, the Great Lakes. The 5 Gyres Institute, a group that studies the global effect of plastic pollutants, found beads within the lakes. Early testing, which looked at Lake Superior, Lake Huron and Lake Erie, shows Lake Erie had more than two times the amount sampled within some areas of the ocean. The results of the study have spurred manufacturers to act. “Most of the major manufacturers that were presented with the research of the high abundance of these particles in the Great Lakes surface water responded by voluntarily phasing out plastic particles in their products and looking for alternative formulations,” said Olga Lyandres, research manager of the Alliance for the Great Lakes, a Chicago-based environmental organization. The alliance worked with The 5 Gyres Institute on the lakes study.
“Plastic microbeads are used in personal care cleansing products because of their exfoliating properties and excellent safety profile,” said the Personal Care Products Council in a prepared statement. “However, our industry shares a common interest with other stakeholders in protecting the environment, and we take questions regarding the presence of plastic microbeads in our waterways very seriously. While we believe plastic microbeads in personal care cleansing products represent a very small contributor to the overall plastic found in the aquatic environment, our industry is demonstrating leadership on this issue by publicly announcing plans to phase out the use of these ingredients.”
The study found remnants of other plastics including pieces of plastic bags. But the amount of microbeads and the fact that they are easily identifiable allowed researchers to point to a specific cause of pollution and request that companies transition to more environmentally friendly substitutes. Although many high profile companies, such as Johnson & Johnson and Unilever, have already started phasing out production of the beads, The Alliance for the Great Lakes is lobbying for Senate Bill 2727 to hold the companies to that promise.
States surrounding the Great Lakes and some coastal states, such as New York and California, have also considered bans. Those who negotiated SB 2727 say it could serve as an example for those states because it gives the industry years to find a substitute for the beads and allows retailers to continue selling their current inventory. Scrubbing products that do not contain microbeads have various other abrasive materials, such as silica, ground nutshells, rice, sugar or salt. SB 2727 calls for a ban on products containing the beads to begin in 2017 and a ban on the sale of such products by 2018. Mark Denzler with the Illinois Manufacturers Association said a phase out takes time. “You have to change the line production and get additional products for what you’re going to use,” he says. “So, really the debates are set on timelines when manufacturers have to stop producing it, and retailers have to stop selling it. That negotiation was sort of easy to accomplish.”
Chicago Democratic Sen. Heather Steans, who sponsored the bill, said that cooperation from the manufacturers has helped the measure gain broad support. The measure passed with no opposition in the Senate. “We phased it in to make it so the companies have time to handle it appropriately, but they really worked with us and we got to an agreement. So I think we probably pass it [in the House] as it got out, unanimously, here,” she said.
Results from the testing of Lake Michigan and Lake Ontario waters will be released later this month, but those close to the research predict the findings will be similar to the other lakes. While the industry, environmentalists and lawmakers are working together to phase out the beads, those already in the waters cannot be removed because of their small size. “Well, once they are in the water, they are there to stay,” said Lyandres. “They are very difficult to capture once they are released.”
Thursday, November 07, 2013
Veto session is over, or is it?
By Jamey Dunn
Illinois lawmakers approved the spending to set up the state’s concealed carry of firearms permit today, but other issues such as pension reform, tax breaks for corporations and enhanced penalties for gun offenders will have to wait.
The House adjourned abruptly this morning after a procedural move blocked a bill to increase mandatory sentences for drug crimes. Senate Bill 1342 would increase the mandatory minimum sentence for felons or gang members caught carrying a gun without a Firearm Owners Identification (FOID) card to four years. The proposal would require those convicted of the crime to serve 85 percent of their sentence.
Sponsor Mike Zalewski, a Riverside Democrat, removed a provision that would have applied to first-time offenders and in doing so was able to get the support of the National Rifle Association. But members of the black legislative caucus opposed his bill. Chicago Democratic Rep. Kenneth Dunkin used a House rule to block the bill from being called for a vote because the budgetary impact of the measure was not made available to lawmakers through a formal process known as a note. “I filed the note on behalf of the Illinois legislative black caucus for those of us in the House and the Senate,” Dunkin said. We have expressed time and time again that we have some basic problems with this mandatory minimum — that it’s too all encompassing, it takes in way too many people unnecessarily. The collateral damage is going to be overwhelming, and it’s going to wrap up too many innocent citizens. All we simply wanted to do was to make sure that the bill went after the bad guys.”
After the notes were filed and the information was not immediately available, House Speaker Michael Madigan quickly adjourned the fall session. Harrisburg Democratic Rep. Brandon Phelps, who sponsored the state’s new concealed carry law, has been working on the bill with Zalewski. He said he was not exactly surprised that the bill did not move forward today because he said many Democrats told him they had reservations about it. “The speaker said that we’re not doing it today, more or less. ... We spent so many hours working on this and we had a deal. Now we’re not doing it today at all. So we’ve got to come back in December, hopefully we’ll call it then.” Several House members mentioned as they exited the chamber that they expect they might return in December to take up public pension legislation.
Zalewski, who has partnered with Chicago Mayor Rahm Emanuel to push for the proposal, blamed the Illinois Department of Corrections for not providing details of how the measure would affect its budget and prison population. The IDOC opposed the bill because officials said the department did not have the money or capacity to house the population in crease it would cause. “The Department of Corrections knows how much the bill costs. It’s their basis for their opposition of the bill. Yet they couldn’t walk down to the House clerk’s office and file it in time,” Zalewski said.
A spokesman for the department said the changes to the bill yesterday made it difficult for them to recalculate the impact quickly enough. “This is a very complex piece of legislation, and every time the sponsors file amendments changing provisions of the bill, there is substantial work and analysis that must be done to determine the impact of the changes,” Tom Shaer with IDOC said in an email. “Amendment 5 was just added to this bill yesterday afternoon. IDOC has had staff analyzing the impact of this amendment since that time. We have tremendous respect for everyone in this process and are obligated to furnish them with accurate information and thorough, well-researched projections.”
Members of the black caucus say they want to address the violence in a more holistic way that includes investments in education and rehabilitation programs. “There is a way to do both of these things. To make sure that the people that need to go into prison go into prison but that we also deal with the 40 percent of people who are there for nonviolent offenses, who need to be in cheaper alternative programs that give them a better chance and a shot at life. While also making sure that the folks who need to be there, and that’s felons and gang bangers, actually end up in prison — in a prison that has room for them to be there,” said Chicago Democratic Rep. Christian Mitchell. “I think that the mayor and Rep. Zalewski are trying to do the right thing, but the how really matters.” Some caucus members added that they were concerned that some of the previous felonies that would make offenders eligible for the mandatory minimum sentence were nonviolent offenses, such as shoplifting. They also said they would like to see a time limit, so that a crime that occurred a decade ago would not make someone eligible for a mandatory minimum sentence.
Zalewski said he has been working to negotiate the bill and that some who are opposed will never support the concept of mandatory minimum sentences. “I’ve negotiated on this bill for six weeks. ‘No’ is always going to be the answer for some people. You saw it today. You saw an unwillingness to have a debate about public policy and public safety. And [opponents] resorted to tricks because the votes were there. That’s what happens in this building sometimes.” But members of the black caucus disagree that the bill would have passed if called for a vote.
Meanwhile the Illinois Senate approved a supplemental spending bill worth about $50 million. The largest chunk of that, almost $34 million, is for implementation of the concealed carry licensing system. Only about $500,000 of the spending in the bill comes out of the General Revenue Fund. House Bill 209 does not include the $112 million that would be needed to give state workers back pay. In 2011, lawmakers did not appropriate the money for contractual raises for state employees, but a judge ordered the state to pay the increases with interest. House Speaker Michael Madigan has said that state agencies should work within their current budgets to find the money for the pay. Sen. Mike Jacobs, a Democrat from East Moline, voted in favor of the bill, which received broad bipartisan support. But he said that lawmakers would eventually need to approve the money for workers. “I just think it’s important that the Senate knows that we owe this money and at some point in our career, in our lives, we ought to pay it.”
With the House adjourning after less than an hour spent in session today, many issues were left without resolution. Supporters of tax break plans for Archer Daniels Midland Co. and the newly formed Office Max Inc. saw no urgency to call those measures for a vote in the Senate when it became clear that the House would not vote on them today. ADM is looking to move its headquarters from Decatur and is considering Chicago, among other options. Office Depot Inc., the product of a merger between Office Depot and Office Max, is choosing between Naperville, Office Max’s current headquarters, and Boca Raton, Fla., where Office Depot is based.
The House also did not take up a bill that passed in the Senate yesterday to restore Medicaid dental benefits to adults. Chicago Democratic Rep. Monique Davis said that she thinks that the House will likely approve that bill early next year. “I think it’s going to pass. I think it’s going to get a lot of support. We’ll get it when we first come back in January. We’ll be able to do that because that will be one of the first few days we can do that.” If lawmakers wait until January on some issues, they will need fewer votes to achieve an immediate effective date on legislation. “Don’t think because we’re not on that House floor that people aren’t working. People are working,” Davis said. Some issues may not have to wait until January. House Speaker Michael Madigan has said that he hopes lawmakers will hold a session to vote on changes to the state’s public pension systems. Legislative leaders met on the issue last week and say they feel progress was made. They sent components of a plan to the pension systems to get cost savings estimates. Those projections usually take about 10 days to produce.
Having another potential shot at a legislative session soon may give those who could not get their bills passed during veto session another bite at the apple. However, knowing that they could be back at the Statehouse in the near future, lawmakers may have deflated some issues by taking urgency out of the situation. Why take the controversial vote today that can be pushed off for another month? Still, with the historic passage of same-sex marriage, approval of a supplemental appropriation bill, and both chambers passing changes to the pension system for Chicago Park District employees, this veto session was more eventful than many in recent memory.
Illinois lawmakers approved the spending to set up the state’s concealed carry of firearms permit today, but other issues such as pension reform, tax breaks for corporations and enhanced penalties for gun offenders will have to wait.
The House adjourned abruptly this morning after a procedural move blocked a bill to increase mandatory sentences for drug crimes. Senate Bill 1342 would increase the mandatory minimum sentence for felons or gang members caught carrying a gun without a Firearm Owners Identification (FOID) card to four years. The proposal would require those convicted of the crime to serve 85 percent of their sentence.
Sponsor Mike Zalewski, a Riverside Democrat, removed a provision that would have applied to first-time offenders and in doing so was able to get the support of the National Rifle Association. But members of the black legislative caucus opposed his bill. Chicago Democratic Rep. Kenneth Dunkin used a House rule to block the bill from being called for a vote because the budgetary impact of the measure was not made available to lawmakers through a formal process known as a note. “I filed the note on behalf of the Illinois legislative black caucus for those of us in the House and the Senate,” Dunkin said. We have expressed time and time again that we have some basic problems with this mandatory minimum — that it’s too all encompassing, it takes in way too many people unnecessarily. The collateral damage is going to be overwhelming, and it’s going to wrap up too many innocent citizens. All we simply wanted to do was to make sure that the bill went after the bad guys.”
After the notes were filed and the information was not immediately available, House Speaker Michael Madigan quickly adjourned the fall session. Harrisburg Democratic Rep. Brandon Phelps, who sponsored the state’s new concealed carry law, has been working on the bill with Zalewski. He said he was not exactly surprised that the bill did not move forward today because he said many Democrats told him they had reservations about it. “The speaker said that we’re not doing it today, more or less. ... We spent so many hours working on this and we had a deal. Now we’re not doing it today at all. So we’ve got to come back in December, hopefully we’ll call it then.” Several House members mentioned as they exited the chamber that they expect they might return in December to take up public pension legislation.
Zalewski, who has partnered with Chicago Mayor Rahm Emanuel to push for the proposal, blamed the Illinois Department of Corrections for not providing details of how the measure would affect its budget and prison population. The IDOC opposed the bill because officials said the department did not have the money or capacity to house the population in crease it would cause. “The Department of Corrections knows how much the bill costs. It’s their basis for their opposition of the bill. Yet they couldn’t walk down to the House clerk’s office and file it in time,” Zalewski said.
A spokesman for the department said the changes to the bill yesterday made it difficult for them to recalculate the impact quickly enough. “This is a very complex piece of legislation, and every time the sponsors file amendments changing provisions of the bill, there is substantial work and analysis that must be done to determine the impact of the changes,” Tom Shaer with IDOC said in an email. “Amendment 5 was just added to this bill yesterday afternoon. IDOC has had staff analyzing the impact of this amendment since that time. We have tremendous respect for everyone in this process and are obligated to furnish them with accurate information and thorough, well-researched projections.”
Members of the black caucus say they want to address the violence in a more holistic way that includes investments in education and rehabilitation programs. “There is a way to do both of these things. To make sure that the people that need to go into prison go into prison but that we also deal with the 40 percent of people who are there for nonviolent offenses, who need to be in cheaper alternative programs that give them a better chance and a shot at life. While also making sure that the folks who need to be there, and that’s felons and gang bangers, actually end up in prison — in a prison that has room for them to be there,” said Chicago Democratic Rep. Christian Mitchell. “I think that the mayor and Rep. Zalewski are trying to do the right thing, but the how really matters.” Some caucus members added that they were concerned that some of the previous felonies that would make offenders eligible for the mandatory minimum sentence were nonviolent offenses, such as shoplifting. They also said they would like to see a time limit, so that a crime that occurred a decade ago would not make someone eligible for a mandatory minimum sentence.
Zalewski said he has been working to negotiate the bill and that some who are opposed will never support the concept of mandatory minimum sentences. “I’ve negotiated on this bill for six weeks. ‘No’ is always going to be the answer for some people. You saw it today. You saw an unwillingness to have a debate about public policy and public safety. And [opponents] resorted to tricks because the votes were there. That’s what happens in this building sometimes.” But members of the black caucus disagree that the bill would have passed if called for a vote.
Meanwhile the Illinois Senate approved a supplemental spending bill worth about $50 million. The largest chunk of that, almost $34 million, is for implementation of the concealed carry licensing system. Only about $500,000 of the spending in the bill comes out of the General Revenue Fund. House Bill 209 does not include the $112 million that would be needed to give state workers back pay. In 2011, lawmakers did not appropriate the money for contractual raises for state employees, but a judge ordered the state to pay the increases with interest. House Speaker Michael Madigan has said that state agencies should work within their current budgets to find the money for the pay. Sen. Mike Jacobs, a Democrat from East Moline, voted in favor of the bill, which received broad bipartisan support. But he said that lawmakers would eventually need to approve the money for workers. “I just think it’s important that the Senate knows that we owe this money and at some point in our career, in our lives, we ought to pay it.”
With the House adjourning after less than an hour spent in session today, many issues were left without resolution. Supporters of tax break plans for Archer Daniels Midland Co. and the newly formed Office Max Inc. saw no urgency to call those measures for a vote in the Senate when it became clear that the House would not vote on them today. ADM is looking to move its headquarters from Decatur and is considering Chicago, among other options. Office Depot Inc., the product of a merger between Office Depot and Office Max, is choosing between Naperville, Office Max’s current headquarters, and Boca Raton, Fla., where Office Depot is based.
The House also did not take up a bill that passed in the Senate yesterday to restore Medicaid dental benefits to adults. Chicago Democratic Rep. Monique Davis said that she thinks that the House will likely approve that bill early next year. “I think it’s going to pass. I think it’s going to get a lot of support. We’ll get it when we first come back in January. We’ll be able to do that because that will be one of the first few days we can do that.” If lawmakers wait until January on some issues, they will need fewer votes to achieve an immediate effective date on legislation. “Don’t think because we’re not on that House floor that people aren’t working. People are working,” Davis said. Some issues may not have to wait until January. House Speaker Michael Madigan has said that he hopes lawmakers will hold a session to vote on changes to the state’s public pension systems. Legislative leaders met on the issue last week and say they feel progress was made. They sent components of a plan to the pension systems to get cost savings estimates. Those projections usually take about 10 days to produce.
Having another potential shot at a legislative session soon may give those who could not get their bills passed during veto session another bite at the apple. However, knowing that they could be back at the Statehouse in the near future, lawmakers may have deflated some issues by taking urgency out of the situation. Why take the controversial vote today that can be pushed off for another month? Still, with the historic passage of same-sex marriage, approval of a supplemental appropriation bill, and both chambers passing changes to the pension system for Chicago Park District employees, this veto session was more eventful than many in recent memory.
Wednesday, November 06, 2013
Thursday, October 31, 2013
New ADM tax break bill proposed
By Jamey Dunn
Whether same sex marriage or public pension reform will pass during the last week of the Illinois General Assembly's fall veto session seems to be anybody’s guess at this point. But it appears that there may be a way to move forward on a tax break for Archers Daniels Midland. ADM announced plans to move its corporate headquarters from Decatur.
The company said it was considering Chicago as the new location and then came to the General Assembly looking for a tax credit. The initial public reaction from lawmakers was less than positive. However, statehouse observers have been saying for weeks that a deal would likely be worked out in the veto session. Lawmakers are scheduled to be back in session for three days next week. The first week of the fall session wrapped up a day early after little was accomplished.
Sen. Andy Manar, a Democrat from Bunker Hill, filed legislation today to give ADM the tax credit it sought to keep its headquarters in Illinois. Manar was critical of an earlier bill. “I’ve had countless conversations with constituents, local officials and community groups who are angered by ADM’s recent announcement of their intention to move their headquarters. I would have preferred to have seen ADM first engage state and local officials to find a way to maintain employment levels in Decatur,” he said in a written statement earlier this month. “Now, only eight days later, there is legislation moving in the House of Representatives to give ADM tens of millions to potentially stay in Illinois and move to Chicago. Not so fast. Illinois is facing tough times. Decatur is facing tougher times, with the highest unemployment rate in the state. I will oppose any bill, and I will urge my colleagues to join me in opposing any bill that results in net job loss in Decatur.”
Manar’s new legislation (Senate Amendment 2 to House Bill 2536) would require ADM to replace the 100 corporate jobs that would leave Decatur by moving 100 jobs to Decatur from other states. “Throughout this process, I have said that keeping ADM in Illinois was a priority but not at the expense of taxpayers and jobs,” Manar said today. “The bill I have introduced will allow ADM to continue their long and valued partnership with Illinois, while growing and creating much-needed jobs here.” The proposal would also create a task force with the goal of creating jobs through ADM's intermodal transportation facility in Decatur. Construction of the facility was funded in part through a grant from the Illinois Department of Commerce and Economic Opportunity.
The bill was the product of collaboration between ADM executives, Manar and elected officials in Decatur. “We are grateful for Senator Manar’s support. We appreciate the constructive dialogue he’s led with ADM and local leaders around our shared desire to see Decatur grow and prosper,” said Victoria Podesta, ADM’s chief communications officer. “The outcome envisioned in the legislation, if realized, would be a win for Illinois, for Decatur and for ADM.”
Mitch Schaben, a spokesman for Manar, said the amount of the tax credit is still being negotiated. He said the goal is to have everything hashed out by the end of the veto session. But the proposal could still face an uphill climb. Some Democrats are less than thrilled that corporations continue to get tax breaks while education and human services suffer cuts. On the other side of the aisle, some Republicans have voiced opposition to the concept, saying that the state should reduce taxes for all businesses instead of handing out special breaks to larger, well-connected companies. Most recently, lawmakers voted in 2011 to give tax cuts to Sears and the CME Group, which owns the Chicago Mercantile Exchange and the Chicago Board of Trade. Gov. Pat Quinn signed that legislation but has since said he would not consider any tax breaks that pass before lawmakers approve changes to public employee pensions.
Whether same sex marriage or public pension reform will pass during the last week of the Illinois General Assembly's fall veto session seems to be anybody’s guess at this point. But it appears that there may be a way to move forward on a tax break for Archers Daniels Midland. ADM announced plans to move its corporate headquarters from Decatur.
The company said it was considering Chicago as the new location and then came to the General Assembly looking for a tax credit. The initial public reaction from lawmakers was less than positive. However, statehouse observers have been saying for weeks that a deal would likely be worked out in the veto session. Lawmakers are scheduled to be back in session for three days next week. The first week of the fall session wrapped up a day early after little was accomplished.
Sen. Andy Manar, a Democrat from Bunker Hill, filed legislation today to give ADM the tax credit it sought to keep its headquarters in Illinois. Manar was critical of an earlier bill. “I’ve had countless conversations with constituents, local officials and community groups who are angered by ADM’s recent announcement of their intention to move their headquarters. I would have preferred to have seen ADM first engage state and local officials to find a way to maintain employment levels in Decatur,” he said in a written statement earlier this month. “Now, only eight days later, there is legislation moving in the House of Representatives to give ADM tens of millions to potentially stay in Illinois and move to Chicago. Not so fast. Illinois is facing tough times. Decatur is facing tougher times, with the highest unemployment rate in the state. I will oppose any bill, and I will urge my colleagues to join me in opposing any bill that results in net job loss in Decatur.”
Manar’s new legislation (Senate Amendment 2 to House Bill 2536) would require ADM to replace the 100 corporate jobs that would leave Decatur by moving 100 jobs to Decatur from other states. “Throughout this process, I have said that keeping ADM in Illinois was a priority but not at the expense of taxpayers and jobs,” Manar said today. “The bill I have introduced will allow ADM to continue their long and valued partnership with Illinois, while growing and creating much-needed jobs here.” The proposal would also create a task force with the goal of creating jobs through ADM's intermodal transportation facility in Decatur. Construction of the facility was funded in part through a grant from the Illinois Department of Commerce and Economic Opportunity.
The bill was the product of collaboration between ADM executives, Manar and elected officials in Decatur. “We are grateful for Senator Manar’s support. We appreciate the constructive dialogue he’s led with ADM and local leaders around our shared desire to see Decatur grow and prosper,” said Victoria Podesta, ADM’s chief communications officer. “The outcome envisioned in the legislation, if realized, would be a win for Illinois, for Decatur and for ADM.”
Mitch Schaben, a spokesman for Manar, said the amount of the tax credit is still being negotiated. He said the goal is to have everything hashed out by the end of the veto session. But the proposal could still face an uphill climb. Some Democrats are less than thrilled that corporations continue to get tax breaks while education and human services suffer cuts. On the other side of the aisle, some Republicans have voiced opposition to the concept, saying that the state should reduce taxes for all businesses instead of handing out special breaks to larger, well-connected companies. Most recently, lawmakers voted in 2011 to give tax cuts to Sears and the CME Group, which owns the Chicago Mercantile Exchange and the Chicago Board of Trade. Gov. Pat Quinn signed that legislation but has since said he would not consider any tax breaks that pass before lawmakers approve changes to public employee pensions.
Tuesday, October 22, 2013
First week of veto session shaping up to be a bust
By Jamey Dunn
The Illinois General Assembly's fall veto session was off to an anticlimactic start today, as hearings on some of the most closely watched issues were canceled.
The House Revenue and Finance Committee did not take up a proposed tax break for Archer Daniels Midland. Committee chair Marion Democratic Rep. John Bradley had few details to share about the proposal, which supporters hope would persuade ADM to put its corporate headquarters in Chicago. ADM announced earlier this month that it plans move its headquarters out of Decatur. The company would leave most of the current jobs in Decatur, but about 100 positions would go with the transfer. “They’re under consideration at this point,” Bradley said of several tax breaks being pitched to lawmakers. OfficeMax and Office Depot are planning a merger and have approached lawmakers for a tax break. OfficeMax is based in Naperville and Office Depot is headquartered in Florida. So the two states are now in competition for the headquarters of the final merged company. The two office supply companies area seeking a tax break similar to the one ADM is looking for. In the end, a tax break omnibus bill may emerge.
However, Gov. Pat Quinn has said that he will not sign “special” tax breaks for businesses until lawmakers approve changes to the state’s public pension systems. But Bradley did not seem phased by Quinn’s statements. “We’re used to rhetoric like that coming out of the governor’s office.”
A hearing on a proposal, backed by Chicago Mayor Rahm Emanuel, to increase penalties from some gun crimes also did not occur today. The sponsor, Chicago Democratic Rep. Michael Zalewski, is reportedly in talks with the National Rifle Association. If the negotiations are productive, a compromise bill could emerge as early as tomorrow.
Several budget hearings were held today, and a picture of what Quinn’s office would like to see in a supplemental appropriation became clearer. Ben Winick with the Governor’s Office of Management and Budget told a House committee that $97 million in unexpected revenues have been transferred into the General Revenues fund, and the budget office expects an additional $262 million in sales tax revenues that were originally underestimated. However, he said that telecommunications tax receipts would likely come in $46 million shy of estimates. Still, by Quinn’s budget staff’s count, there is about $313 million in funds to potentially spread around. The governor is asking lawmakers to approve about $112 million to pay back wages to state workers. A judge ordered the state to pay the wages with interest. Quinn’s staff is urging lawmakers to pay them sooner, so less interest is piled on. Some agencies have already been able to find the money for back pay in their budgets. Senate Bill 2603 would fund back wages for the Department of Human Services, the Department of Public Health, the Department of Corrections, the Department of Juvenile Justice and the Department of Natural Resources. Other supplemental appropriations bills have not been filed, meaning that the details are likely not worked out yet. The governor’s office is also looking at spending some of the money on setup costs for the state’s licensing system for concealed carry of firearms.
Meanwhile, Quinn and several other elected officials spoke at a rally at the Statehouse for same-sex marriage. Quinn has called on lawmakers not to be distracted from pension reform by other issues, but he said today that same-sex marriage is an exception. “I think this is a civil rights issue, and anytime there is an issue about rights of people, that deserves important consideration.” Opponents to same-sex marriage are scheduled to hold a rally tomorrow. It is not clear if same-sex marriage supporters will be able to find the votes needed to pass a bill during veto session.
House Minority Leader Jim Durkin was officially sworn into his new leadership role today. His statement to Illinois Issues earlier today that veto session is "generally overhyped" seems to be proving true at this point. The House and Senate have already canceled their Thursday sessions, indicating that little is likely to happen this week. Lawmakers are scheduled to return for the last week of the veto session on November 5.
The Illinois General Assembly's fall veto session was off to an anticlimactic start today, as hearings on some of the most closely watched issues were canceled.
The House Revenue and Finance Committee did not take up a proposed tax break for Archer Daniels Midland. Committee chair Marion Democratic Rep. John Bradley had few details to share about the proposal, which supporters hope would persuade ADM to put its corporate headquarters in Chicago. ADM announced earlier this month that it plans move its headquarters out of Decatur. The company would leave most of the current jobs in Decatur, but about 100 positions would go with the transfer. “They’re under consideration at this point,” Bradley said of several tax breaks being pitched to lawmakers. OfficeMax and Office Depot are planning a merger and have approached lawmakers for a tax break. OfficeMax is based in Naperville and Office Depot is headquartered in Florida. So the two states are now in competition for the headquarters of the final merged company. The two office supply companies area seeking a tax break similar to the one ADM is looking for. In the end, a tax break omnibus bill may emerge.
However, Gov. Pat Quinn has said that he will not sign “special” tax breaks for businesses until lawmakers approve changes to the state’s public pension systems. But Bradley did not seem phased by Quinn’s statements. “We’re used to rhetoric like that coming out of the governor’s office.”
A hearing on a proposal, backed by Chicago Mayor Rahm Emanuel, to increase penalties from some gun crimes also did not occur today. The sponsor, Chicago Democratic Rep. Michael Zalewski, is reportedly in talks with the National Rifle Association. If the negotiations are productive, a compromise bill could emerge as early as tomorrow.
Several budget hearings were held today, and a picture of what Quinn’s office would like to see in a supplemental appropriation became clearer. Ben Winick with the Governor’s Office of Management and Budget told a House committee that $97 million in unexpected revenues have been transferred into the General Revenues fund, and the budget office expects an additional $262 million in sales tax revenues that were originally underestimated. However, he said that telecommunications tax receipts would likely come in $46 million shy of estimates. Still, by Quinn’s budget staff’s count, there is about $313 million in funds to potentially spread around. The governor is asking lawmakers to approve about $112 million to pay back wages to state workers. A judge ordered the state to pay the wages with interest. Quinn’s staff is urging lawmakers to pay them sooner, so less interest is piled on. Some agencies have already been able to find the money for back pay in their budgets. Senate Bill 2603 would fund back wages for the Department of Human Services, the Department of Public Health, the Department of Corrections, the Department of Juvenile Justice and the Department of Natural Resources. Other supplemental appropriations bills have not been filed, meaning that the details are likely not worked out yet. The governor’s office is also looking at spending some of the money on setup costs for the state’s licensing system for concealed carry of firearms.
Meanwhile, Quinn and several other elected officials spoke at a rally at the Statehouse for same-sex marriage. Quinn has called on lawmakers not to be distracted from pension reform by other issues, but he said today that same-sex marriage is an exception. “I think this is a civil rights issue, and anytime there is an issue about rights of people, that deserves important consideration.” Opponents to same-sex marriage are scheduled to hold a rally tomorrow. It is not clear if same-sex marriage supporters will be able to find the votes needed to pass a bill during veto session.
House Minority Leader Jim Durkin was officially sworn into his new leadership role today. His statement to Illinois Issues earlier today that veto session is "generally overhyped" seems to be proving true at this point. The House and Senate have already canceled their Thursday sessions, indicating that little is likely to happen this week. Lawmakers are scheduled to return for the last week of the veto session on November 5.
Sunday, October 20, 2013
Veto session preview
By Jamey Dunn
Our October issue has a helpful preview of the Illinois General Assembly's fall veto session. (It is only available in the print edition until Nov. 1, when it will become available online.) Many of the issues that could crop up are the same ones left unresolved at the end of the spring legislative session. But there have been some developments and changes since that story was published. Here are some things to watch for as lawmakers return to the Statehouse for veto session this week:
Public pension changes
Don’t expect much to happen this week on the most highly anticipated issue. Lawmakers working on a committee to propose changes to the state’s pension systems say they will not have legislation drafted in time for a vote in the first week of veto session. Details of a plan that they were considering went public in August. The plan would toss out the 3 percent annual compounded cost-of-living adjustment retirees currently receive. Instead, cost-of-living adjustments would be half the rate of inflation. The rates would have a base level and cap set. The change would likely result in smaller COLAs for retirees, but if inflation goes up, so will the COLAs. Employees would contribute 1 percent less to their retirement benefits. The retirement age would not change. The proposal is estimated to reduce the almost $100 billion unfunded pension liability by $18.1 billion and save the state $145 billion over 30 years.
But some Republicans say the plan would not save enough money. They want to see some tweaks made, including decreasing the base guaranteed COLA, making the cut to employee contributions smaller, increasing the retirement age and offering an optional 401(k)-style plan to employees in all the pension systems. Right now, such a plan is only offered to university employees. The Republican members of the committee had these ideas scored by actuaries to estimate their potential savings and just got the numbers back at the end of last week. “We don’t have a bill that’s written yet. I don’t see us doing anything on pensions in veto next week,” said Naperville Republican Darlene Senger.
Aurora Democratic Sen. Linda Holmes said Democrats on the committee are open to the Republicans suggestions. However, ideas such as adding a 401(k) component or changing the retirement age could be non-starters. “I don’t think that our side really wants to touch retirement age,” she said. Northbrook Democratic Rep. Elaine Nekritz said that while there will not be a lot of outward action on pensions, there will likely be a lot of behind-closed-doors meetings taking place this week among legislative leaders and members of the legislature. She says of the Republican proposals: “Personally I supported a bill that had a larger level of savings, so I don’t object to moving in that direction. But we have to find something that will meet everybody’s needs.” She said she hopes the committee will have a final plan to present to the General Assembly by the last week of veto session, which is scheduled to begin on November 5. “That is my fervent hope.” Lawmakers are not in session the last week of October. Nekritz said she thinks it is likely such a plan would get a hearing before a floor vote, but she said it might not be a procedural requirement. She said she would prefer a hearing. But she notes, “I don’t control the gavel.” Senate President John Cullerton told the Associated Press that a bill could be called in the Senate even if the committee cannot come to an agreement, but it could be harder to pass something in both chambers without a bipartisan stamp of approval from the committee.
Gov. Pat Quinn will likely talk about little else in the coming weeks as he has made pension reform his top priority. He vetoed lawmakers’ pay this summer, saying they should not get it until a bill was passed. However a judge ruled against his veto, and they started getting their checks again in September. The Illinois Supreme Court has agreed to take up the case and will likely hear arguments in the spring. Quinn is voluntarily not taking a paycheck. He says he will not take his pay until a bill is sent to his desk.
Same-sex marriage
Proponents are optimistic about passing same-sex marriage in the near future, but whether it will happen in the veto session is unclear. Some advocates say they have the votes but are not willing to indicate whom they have brought on board in the House. That makes sense because Republicans who have made their support public have faced protests and are now likely to have primary challengers. To pass as is, the bill would need 71 votes now. But if the bill’s sponsor, Chicago Democratic Rep. Greg Harris, waits until January, the deadline to file petitions to run in the primary will have passed, and the bill would only need 60 votes. He opted not to call the bill at the end of the regular session because he said he did not have the votes, and some House members wanted time to poll their constituents. Harris, as always, will not share his vote count. But he told the Chicago Tribune that now is the time to legalize same-sex marriage. “It's the right time, and it's the right thing to do” he said. “Momentum is in the direction of this vote.” Supporters and opponents have rallies at the Statehouse scheduled this week.
ADM tax breaks
Archer Daniels Midland announced earlier this month that it plans to move its headquarters from Decatur, where it has been based for more than 40 years. The company says it would keep jobs that are in Decatur now but would move about 100 positions to the new headquarters. It appears that Chicago is on ADM’s short list of potential locations for its headquarters, but ADM is seeking up to $24 million in tax breaks from state government during the next 20 years. The legislation is scheduled for a House committee hearing on Tuesday. Few lawmakers are vocally supporting the proposal, and there are plenty of critics. But if it seems that ADM might really leave the state, votes could line up behind the legislation. However, Quinn has said he will not sign legislation with tax breaks for ADM before changes to the pension systems are approved. “Our number one way to help business is to get pension reform. We need ADM and all of our big businesses to band together, put pressure on the legislature — the House and the Senate, Democrats and Republicans — to get a vote on the pension reform. That helps everybody. That helps every business. That helps every taxpayer,” Quinn told reporters in Chicago earlier this month. “I think we need to have a moratorium on any special legislation for tax breaks for corporations. We have to focus on pension reform.” But Quinn’s relationship with the legislature after he cut off their pay may be frosty enough that his opposition on any issue could potentially give it a boost.
Gun crime sentencing
Some Chicago leaders, including Mayor Rahm Emanuel, are calling for the legislature to pass tougher sentencing laws in the hopes of quelling the deadly gun violence taking place in parts of the city. The push comes after a shooting in a park injured 13 people, including a 3-year-old, last month. The National Rifle Association and prison watchdog groups oppose the measure. The watchdog groups worry that longer sentences would strain the state’s already crowded corrections system.
The NRA has illustrated its ability to stop a bill in its tracks many times in the General Assembly. So unless the sponsor, Chicago Democratic Rep. Michael Zalewski, can work out a deal with the group, it could be a tough battle. The legislation is scheduled for a House committee hearing on Tuesday.
Committee Hearings
Several issues are scheduled for “subject matter only” hearings during the veto session. That means witnesses will likely come in to testify and lawmakers can ask questions, but no committee vote is taken on legislation.
Our October issue has a helpful preview of the Illinois General Assembly's fall veto session. (It is only available in the print edition until Nov. 1, when it will become available online.) Many of the issues that could crop up are the same ones left unresolved at the end of the spring legislative session. But there have been some developments and changes since that story was published. Here are some things to watch for as lawmakers return to the Statehouse for veto session this week:
Public pension changes
Don’t expect much to happen this week on the most highly anticipated issue. Lawmakers working on a committee to propose changes to the state’s pension systems say they will not have legislation drafted in time for a vote in the first week of veto session. Details of a plan that they were considering went public in August. The plan would toss out the 3 percent annual compounded cost-of-living adjustment retirees currently receive. Instead, cost-of-living adjustments would be half the rate of inflation. The rates would have a base level and cap set. The change would likely result in smaller COLAs for retirees, but if inflation goes up, so will the COLAs. Employees would contribute 1 percent less to their retirement benefits. The retirement age would not change. The proposal is estimated to reduce the almost $100 billion unfunded pension liability by $18.1 billion and save the state $145 billion over 30 years.
But some Republicans say the plan would not save enough money. They want to see some tweaks made, including decreasing the base guaranteed COLA, making the cut to employee contributions smaller, increasing the retirement age and offering an optional 401(k)-style plan to employees in all the pension systems. Right now, such a plan is only offered to university employees. The Republican members of the committee had these ideas scored by actuaries to estimate their potential savings and just got the numbers back at the end of last week. “We don’t have a bill that’s written yet. I don’t see us doing anything on pensions in veto next week,” said Naperville Republican Darlene Senger.
Aurora Democratic Sen. Linda Holmes said Democrats on the committee are open to the Republicans suggestions. However, ideas such as adding a 401(k) component or changing the retirement age could be non-starters. “I don’t think that our side really wants to touch retirement age,” she said. Northbrook Democratic Rep. Elaine Nekritz said that while there will not be a lot of outward action on pensions, there will likely be a lot of behind-closed-doors meetings taking place this week among legislative leaders and members of the legislature. She says of the Republican proposals: “Personally I supported a bill that had a larger level of savings, so I don’t object to moving in that direction. But we have to find something that will meet everybody’s needs.” She said she hopes the committee will have a final plan to present to the General Assembly by the last week of veto session, which is scheduled to begin on November 5. “That is my fervent hope.” Lawmakers are not in session the last week of October. Nekritz said she thinks it is likely such a plan would get a hearing before a floor vote, but she said it might not be a procedural requirement. She said she would prefer a hearing. But she notes, “I don’t control the gavel.” Senate President John Cullerton told the Associated Press that a bill could be called in the Senate even if the committee cannot come to an agreement, but it could be harder to pass something in both chambers without a bipartisan stamp of approval from the committee.
Gov. Pat Quinn will likely talk about little else in the coming weeks as he has made pension reform his top priority. He vetoed lawmakers’ pay this summer, saying they should not get it until a bill was passed. However a judge ruled against his veto, and they started getting their checks again in September. The Illinois Supreme Court has agreed to take up the case and will likely hear arguments in the spring. Quinn is voluntarily not taking a paycheck. He says he will not take his pay until a bill is sent to his desk.
Same-sex marriage
Proponents are optimistic about passing same-sex marriage in the near future, but whether it will happen in the veto session is unclear. Some advocates say they have the votes but are not willing to indicate whom they have brought on board in the House. That makes sense because Republicans who have made their support public have faced protests and are now likely to have primary challengers. To pass as is, the bill would need 71 votes now. But if the bill’s sponsor, Chicago Democratic Rep. Greg Harris, waits until January, the deadline to file petitions to run in the primary will have passed, and the bill would only need 60 votes. He opted not to call the bill at the end of the regular session because he said he did not have the votes, and some House members wanted time to poll their constituents. Harris, as always, will not share his vote count. But he told the Chicago Tribune that now is the time to legalize same-sex marriage. “It's the right time, and it's the right thing to do” he said. “Momentum is in the direction of this vote.” Supporters and opponents have rallies at the Statehouse scheduled this week.
ADM tax breaks
Archer Daniels Midland announced earlier this month that it plans to move its headquarters from Decatur, where it has been based for more than 40 years. The company says it would keep jobs that are in Decatur now but would move about 100 positions to the new headquarters. It appears that Chicago is on ADM’s short list of potential locations for its headquarters, but ADM is seeking up to $24 million in tax breaks from state government during the next 20 years. The legislation is scheduled for a House committee hearing on Tuesday. Few lawmakers are vocally supporting the proposal, and there are plenty of critics. But if it seems that ADM might really leave the state, votes could line up behind the legislation. However, Quinn has said he will not sign legislation with tax breaks for ADM before changes to the pension systems are approved. “Our number one way to help business is to get pension reform. We need ADM and all of our big businesses to band together, put pressure on the legislature — the House and the Senate, Democrats and Republicans — to get a vote on the pension reform. That helps everybody. That helps every business. That helps every taxpayer,” Quinn told reporters in Chicago earlier this month. “I think we need to have a moratorium on any special legislation for tax breaks for corporations. We have to focus on pension reform.” But Quinn’s relationship with the legislature after he cut off their pay may be frosty enough that his opposition on any issue could potentially give it a boost.
Gun crime sentencing
Some Chicago leaders, including Mayor Rahm Emanuel, are calling for the legislature to pass tougher sentencing laws in the hopes of quelling the deadly gun violence taking place in parts of the city. The push comes after a shooting in a park injured 13 people, including a 3-year-old, last month. The National Rifle Association and prison watchdog groups oppose the measure. The watchdog groups worry that longer sentences would strain the state’s already crowded corrections system.
The NRA has illustrated its ability to stop a bill in its tracks many times in the General Assembly. So unless the sponsor, Chicago Democratic Rep. Michael Zalewski, can work out a deal with the group, it could be a tough battle. The legislation is scheduled for a House committee hearing on Tuesday.
Committee Hearings
Several issues are scheduled for “subject matter only” hearings during the veto session. That means witnesses will likely come in to testify and lawmakers can ask questions, but no committee vote is taken on legislation.
- Gambling expansion It seems unlikely that lawmakers will vote on a gaming bill during the veto session, but there is a House hearing on the topic scheduled for Wednesday. Quinn has not said that he would give a gaming bill the same treatment as an ADM tax break if it landed on his desk before pension reform. However, he has warned lawmakers in the past not get distracted by the “shiny object” of a gambling expansion when he feels they should be working to get pension changes passed. He has vetoed two gambling bills in the past and said last year that he could only approve one if it had strict regulations and the money went to education.
- Budgetary issues Several House budget committees are holding hearings on potential supplemental appropriations. It is the time of year when agencies tend to come to lawmakers looking to patch budget holes. Union leaders may also be seeking an appropriation for workers’ back pay from raises there were promised but did not receive. Quinn’s budget staff has said that workers should get the money under a new deal the state made with the unions. However, House Speaker Michael Madigan seems less than warm to the idea. Since there are no bills drafted and in committee, it seems more likely that such budget issues might be tackled in January. Quinn may also be reluctant to sign more spending unless pension changes pass. UPDATE: There is a bill for employee back pay, Senate Bill 2603. It had not been posted to an appropriations hearing as of Monday. Union officials are working to lobby lawmakers. “A circuit court judge has already ruled that the money must be paid. Now Gov. Quinn has agreed, too. But it is up to the state legislature to appropriate the funds that are needed,” says a call to action to its members from the American Federation of State County and Municipal Employees Council 31.
- Paint disposal One hearing that may lead to legislation down the road is scheduled for November 4. Lawmakers are looking to create a program to ensure that paint is properly disposed of in the state. Holmes, who sponsors the Paint Stewardship Act, said the committee is seeking input and hopes to get an end product that sellers and industry can agree to. Under such a plan, a small fee would be added to the cost of paint, and the money would be used to set up the program. Holmes cautions that the idea is still in a very early stage and could see major changes as the process continues. “What we want to do is have everyone on board with it,” she said.
- Retiree health care The Commission on Government Forecasting and Accountability is scheduled to hold a hearing on state retiree health benefits on Wednesday morning. We will have coverage on the blog.
Friday, October 18, 2013
Illinois Supreme Court strikes down ‘Amazon’ tax
By Jamey Dunn
The Illinois Supreme Court today struck down a law that requires online sellers to collect state taxes if they partner with an Internet marketer located in Illinois.
Although Illinois residents owe taxes on anything they purchase online, the U.S. Supreme Court ruled in 1992 that the state cannot make retailers collect the tax if they do not have a physical location in the state. Illinoisans are supposed to send the tax they owe on those purchases to the state. However, few residents actually send the money, and the state is missing out on revenues. In 2011, Gov. Pat Quinn signed a law that would require online retailers to collect tax on sales in the state if they worked with marketers located in Illinois. Supporters of the law argued that the online marketers are the physical location, or nexus, in the state that require sellers, such as Amazon.com, to collect the tax. For more on the law, see Illinois Issues April 2011.
After the bill was signed into law, Amazon and Overstock.com cut ties with their online marketers in Illinois. Some of those marketers, including Fat Wallet and CouponCabin, left the state after Amazon severed ties. But today, the court ruled that the marketers, who direct their users to sales on retail sites across the Internet, were unfairly targeted under the law because it does not apply to their analog advertising counterparts such as newspapers. “The Act does not require use tax collection by out-of-state retailers who enter into performance marketing contracts with ‘offline’ Illinois print publishers and over the-air broadcasters,” Illinois Supreme Court Justice Anne Burke wrote in her majority opinion. Burke wrote that this practice is prohibited by the federal Internet Tax Freedom Act (ITFA), which bans “discriminatory taxes on electronic commerce.” She goes on to write: “In short, under the Act, performance marketing over the Internet provides the basis for imposing a use tax collection obligation on an out-of-state retailer when a threshold of $10,000 in sales through the clickable link is reached. However, national, or international, performance marketing by an out-of-state retailer which appears in print or on over-the-air broadcasting in Illinois, and which reaches the same dollar threshold, will not trigger an Illinois use tax collection obligation. The relevant provisions of the Act therefore impose a discriminatory tax on electronic commerce within the meaning of the ITFA.”
One retailer who left the state after the law was signed said he feels vindicated, but he does not know if his business will return to Illinois. “We have been tracking this case closely since we were forced to move outside the state in 2011, and we are happy that the Supreme Court agreed with the Cook County Circuit Court and reached what we believe to be the correct decision,” Scott Kluth, founder and chief executive officer of CouponCabin.com, said in an email. “We have received inquiries regarding whether we intend to remain in Indiana, and we plan to review our options about moving back to Illinois in April 2014, when our lease in Indiana is up for renewal. For now, we're heads down and focused on our busiest time of the year, the fast-approaching holiday shopping season.”
All of the justices sided with Burke except Justice Lloyd Karmeier, who wrote the dissenting opinions. The court avoided the larger constitutional question of whether the tax is allowable under the Commerce Clause of the U.S. Constitution. Karmeier argued that this was a mistake because he said that the issues will likely end up in court again. “A new commerce clause challenge is certain to follow. A year from now we could therefore find ourselves in precisely the same position we are in today, facing the same commerce clause challenge brought by and against the very same litigants. The delay will have accomplished nothing. The issue has been fully briefed and argued and is ripe for a decision now. We should make one,” he wrote. Karmeier said that not requiring online retailers to collect the state taxes associated with their sales means that much of those taxes will go uncollected and local merchants, who have to collect sales tax, are at a disadvantage. “As consumers realize that they can avoid their use tax liability by turning to out-of state Internet retailers with no physical presence here, retailers and servicemen with places of business located within Illinois are placed at a competitive disadvantage because they, unlike their out-of-state Internet competitors, must include the tax in the amount they charge and then assume responsibility for remitting that tax money to the State.”
That is the argument Illinois retailers make in favor of the law. “It's disappointing that the Illinois Supreme Court did not address the constitutionality of the issue but, rather, erred in its conclusion that the act violated the Internet Tax Freedom Act. We haven't given up. There are other avenues for appeal we hope the state will take,” David Vite, president and chief executive officer of the Illinois Retail Merchants Association, said in a written statement. Vite said the ruling emphasized the need for Congress to pass a federal law addressing the issue. “Working with a hodgepodge of laws around the country is intolerable, and brick and mortar retailers continue to be at a substantial disadvantage to their online competitors.”
Senate President John Cullerton, who sponsored the Illinois law, agreed. “The ruling highlights the need for federal action to level the playing field for traditional retailers,” he said in a prepared statement. Cullerton plans to consult Attorney General Lisa Madigan to see if there is any state level legislation that could address the issues the court had with the law.
Talks at the federal level about setting a national standard have been ongoing for years but have yet to produce results. For more on the ongoing debate in Congress, see Illinois Issues June 2012.
The Illinois Supreme Court today struck down a law that requires online sellers to collect state taxes if they partner with an Internet marketer located in Illinois.
Although Illinois residents owe taxes on anything they purchase online, the U.S. Supreme Court ruled in 1992 that the state cannot make retailers collect the tax if they do not have a physical location in the state. Illinoisans are supposed to send the tax they owe on those purchases to the state. However, few residents actually send the money, and the state is missing out on revenues. In 2011, Gov. Pat Quinn signed a law that would require online retailers to collect tax on sales in the state if they worked with marketers located in Illinois. Supporters of the law argued that the online marketers are the physical location, or nexus, in the state that require sellers, such as Amazon.com, to collect the tax. For more on the law, see Illinois Issues April 2011.
After the bill was signed into law, Amazon and Overstock.com cut ties with their online marketers in Illinois. Some of those marketers, including Fat Wallet and CouponCabin, left the state after Amazon severed ties. But today, the court ruled that the marketers, who direct their users to sales on retail sites across the Internet, were unfairly targeted under the law because it does not apply to their analog advertising counterparts such as newspapers. “The Act does not require use tax collection by out-of-state retailers who enter into performance marketing contracts with ‘offline’ Illinois print publishers and over the-air broadcasters,” Illinois Supreme Court Justice Anne Burke wrote in her majority opinion. Burke wrote that this practice is prohibited by the federal Internet Tax Freedom Act (ITFA), which bans “discriminatory taxes on electronic commerce.” She goes on to write: “In short, under the Act, performance marketing over the Internet provides the basis for imposing a use tax collection obligation on an out-of-state retailer when a threshold of $10,000 in sales through the clickable link is reached. However, national, or international, performance marketing by an out-of-state retailer which appears in print or on over-the-air broadcasting in Illinois, and which reaches the same dollar threshold, will not trigger an Illinois use tax collection obligation. The relevant provisions of the Act therefore impose a discriminatory tax on electronic commerce within the meaning of the ITFA.”
One retailer who left the state after the law was signed said he feels vindicated, but he does not know if his business will return to Illinois. “We have been tracking this case closely since we were forced to move outside the state in 2011, and we are happy that the Supreme Court agreed with the Cook County Circuit Court and reached what we believe to be the correct decision,” Scott Kluth, founder and chief executive officer of CouponCabin.com, said in an email. “We have received inquiries regarding whether we intend to remain in Indiana, and we plan to review our options about moving back to Illinois in April 2014, when our lease in Indiana is up for renewal. For now, we're heads down and focused on our busiest time of the year, the fast-approaching holiday shopping season.”
All of the justices sided with Burke except Justice Lloyd Karmeier, who wrote the dissenting opinions. The court avoided the larger constitutional question of whether the tax is allowable under the Commerce Clause of the U.S. Constitution. Karmeier argued that this was a mistake because he said that the issues will likely end up in court again. “A new commerce clause challenge is certain to follow. A year from now we could therefore find ourselves in precisely the same position we are in today, facing the same commerce clause challenge brought by and against the very same litigants. The delay will have accomplished nothing. The issue has been fully briefed and argued and is ripe for a decision now. We should make one,” he wrote. Karmeier said that not requiring online retailers to collect the state taxes associated with their sales means that much of those taxes will go uncollected and local merchants, who have to collect sales tax, are at a disadvantage. “As consumers realize that they can avoid their use tax liability by turning to out-of state Internet retailers with no physical presence here, retailers and servicemen with places of business located within Illinois are placed at a competitive disadvantage because they, unlike their out-of-state Internet competitors, must include the tax in the amount they charge and then assume responsibility for remitting that tax money to the State.”
That is the argument Illinois retailers make in favor of the law. “It's disappointing that the Illinois Supreme Court did not address the constitutionality of the issue but, rather, erred in its conclusion that the act violated the Internet Tax Freedom Act. We haven't given up. There are other avenues for appeal we hope the state will take,” David Vite, president and chief executive officer of the Illinois Retail Merchants Association, said in a written statement. Vite said the ruling emphasized the need for Congress to pass a federal law addressing the issue. “Working with a hodgepodge of laws around the country is intolerable, and brick and mortar retailers continue to be at a substantial disadvantage to their online competitors.”
Senate President John Cullerton, who sponsored the Illinois law, agreed. “The ruling highlights the need for federal action to level the playing field for traditional retailers,” he said in a prepared statement. Cullerton plans to consult Attorney General Lisa Madigan to see if there is any state level legislation that could address the issues the court had with the law.
Talks at the federal level about setting a national standard have been ongoing for years but have yet to produce results. For more on the ongoing debate in Congress, see Illinois Issues June 2012.
Tuesday, October 15, 2013
Half of Illinois' fast-food workers rely on public aid
By Jamey Dunn
More than half of front-line fast food workers in Illinois are recipients of public aid.
A new report titled Fast Food. Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast-Food Industry from the University of Illinois at Urbana-Champaign and the University of California Berkley’s Labor Center found that 51 percent of the 84,000 workers in the fast food industry in the state rely on public aid programs, such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP). Illinois’ stats were similar to national finding. Across the country, 52 percent of the employees of fast food restaurants are enrolled in public assistance programs. That compares with 25 percent of the workforce as a whole. The study also says that 73 percent of those enrolled in the programs covered in the study — Medicaid, SNAP, Earned Income Tax Credits and Medicaid programs specifically for children — are employed or are part of a family that has at least one employed member.
The median pay for fast food employees across the nation is $8.69. The report notes that pay for fast food workers is usually at or near minimum wage, which is $8.25 an hour in Illinois. The median number of working hours available to fast food workers each week is 30. An estimated 87 percent of fast-food workers do not receive health care coverage through their employers.
“The combination of low wages and benefits, often coupled with part-time employment, means that many of the families of fast-food workers must rely on taxpayer-funded safety net to make ends meet,” the study says. “People working in fast-food jobs are more likely to live in or near poverty. One in five families with a member holding a fast-food job has an income below the poverty line.”
The estimated national cost for public benefits given to fast food workers is $7 billion each year. In Illinois, the cost is $368 million annually. About 60 percent of the total national cost, or $3.8 billion, comes from the 10 largest fast food companies, according to a companion report issued today by the New-York-based National Employment Law Project. Last year, those companies reported $7.4 billion in profits and paid $52.7 million to their highest-level corporate employees.
The authors of Fast Food. Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast-Food Industry say these costs should be considered when public policy choices about public aid and minimum wages are made. “Although extensive, the hidden public cost of low-wage work rarely factors into debates about state and national policy. The public benefits discussed in this report provide a vital support system for millions of the working poor. The findings of this report suggest those programs could be more effective if supplemented by measures that improve workers’ wages and benefits, either through public policy measures such as living and minimum wage laws, or through collective bargaining.”
More than half of front-line fast food workers in Illinois are recipients of public aid.
A new report titled Fast Food. Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast-Food Industry from the University of Illinois at Urbana-Champaign and the University of California Berkley’s Labor Center found that 51 percent of the 84,000 workers in the fast food industry in the state rely on public aid programs, such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP). Illinois’ stats were similar to national finding. Across the country, 52 percent of the employees of fast food restaurants are enrolled in public assistance programs. That compares with 25 percent of the workforce as a whole. The study also says that 73 percent of those enrolled in the programs covered in the study — Medicaid, SNAP, Earned Income Tax Credits and Medicaid programs specifically for children — are employed or are part of a family that has at least one employed member.
The median pay for fast food employees across the nation is $8.69. The report notes that pay for fast food workers is usually at or near minimum wage, which is $8.25 an hour in Illinois. The median number of working hours available to fast food workers each week is 30. An estimated 87 percent of fast-food workers do not receive health care coverage through their employers.
“The combination of low wages and benefits, often coupled with part-time employment, means that many of the families of fast-food workers must rely on taxpayer-funded safety net to make ends meet,” the study says. “People working in fast-food jobs are more likely to live in or near poverty. One in five families with a member holding a fast-food job has an income below the poverty line.”
The estimated national cost for public benefits given to fast food workers is $7 billion each year. In Illinois, the cost is $368 million annually. About 60 percent of the total national cost, or $3.8 billion, comes from the 10 largest fast food companies, according to a companion report issued today by the New-York-based National Employment Law Project. Last year, those companies reported $7.4 billion in profits and paid $52.7 million to their highest-level corporate employees.
The authors of Fast Food. Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast-Food Industry say these costs should be considered when public policy choices about public aid and minimum wages are made. “Although extensive, the hidden public cost of low-wage work rarely factors into debates about state and national policy. The public benefits discussed in this report provide a vital support system for millions of the working poor. The findings of this report suggest those programs could be more effective if supplemented by measures that improve workers’ wages and benefits, either through public policy measures such as living and minimum wage laws, or through collective bargaining.”
Thursday, September 05, 2013
Whitley to retire from Illinois Chamber of Commerce
By Jamey Dunn
Doug Whitley, president and chief executive officer of the Illinois Chamber of Commerce, announced today that he plans to retire from the chamber next year.
Whitley once considered a run for governor, but he said his political aspirations are behind him now. He said he had no interest in running for public office. “I am not a candidate for office. I flirted with that four years ago. I never announced. I flirted with it, that is out of my system.”
He became president and CEO of the chamber in 2001. He was a key player in the push for worker’s compensation reform and the battle against former Gov. Rod Blagojevich’s unpopular gross receipts tax proposal. While Whitley was one of many who helped spur debate over recent changes to worker's compensation rules, the chamber was neutral on the legislation that Gov. Pat Quinn signed in 2011. Whitley drew some heat and union protesters when he invited Republican Gov. Scott Walker to speak at a chamber event in Springfield last year. Walker advocated for and signed legislation limiting worker’s collective bargaining rights in his state. After Illinois' income tax rate increase in 2011, Wisconsin began running an ad campaign encouraging businesses to “Escape to Wisconsin.”
Whitley said he is proudest of his role in “restoring the reputation of the Illinois chamber as the voice for business in our state.” When he stepped into the job, the position had been open for more than a year, and he said the chamber had lost its focus. He is also proud of pushing back against Blagojevich on the receipts tax and a hike in worker’s compensation fees. Before coming to the chamber, Whitley was president of Ameritech Illinois. He also served as the director of the Illinois Department of Revenue under former Gov. Jim Edgar. He was president of the Taxpayers Federation of Illinois for 14 years and got his start in the political sphere as a legislative staffer.
Whitley will leave his post at the chamber in June 2014. “It will be good for the Illinois chamber to have a new leader with a fresh perspective when the next gubernatorial administration starts, whether Gov. Pat Quinn is re-elected or we have a new governor,” Whitley said. The chamber plans to conduct a nationwide search to find his replacement. Whitley said that the one of the biggest challenges that his replacement will face is “the failure of our elected officials to be laser-focused on the question of unemployment.”
He added, “If we had 700,000 more people working, some of the government’s budget problems would begin to take care of themselves.”
Whitley, an often outspoken observer of Illinois politics, said he will miss providing commentary on the action. He said that he does not plan to resign to a life of leisure, and he hopes to find a new job and remain in Illinois after he leaves the chamber. “I don’t play golf, and I don’t own a hammock,” he said.
Doug Whitley, president and chief executive officer of the Illinois Chamber of Commerce, announced today that he plans to retire from the chamber next year.
Whitley once considered a run for governor, but he said his political aspirations are behind him now. He said he had no interest in running for public office. “I am not a candidate for office. I flirted with that four years ago. I never announced. I flirted with it, that is out of my system.”
He became president and CEO of the chamber in 2001. He was a key player in the push for worker’s compensation reform and the battle against former Gov. Rod Blagojevich’s unpopular gross receipts tax proposal. While Whitley was one of many who helped spur debate over recent changes to worker's compensation rules, the chamber was neutral on the legislation that Gov. Pat Quinn signed in 2011. Whitley drew some heat and union protesters when he invited Republican Gov. Scott Walker to speak at a chamber event in Springfield last year. Walker advocated for and signed legislation limiting worker’s collective bargaining rights in his state. After Illinois' income tax rate increase in 2011, Wisconsin began running an ad campaign encouraging businesses to “Escape to Wisconsin.”Whitley said he is proudest of his role in “restoring the reputation of the Illinois chamber as the voice for business in our state.” When he stepped into the job, the position had been open for more than a year, and he said the chamber had lost its focus. He is also proud of pushing back against Blagojevich on the receipts tax and a hike in worker’s compensation fees. Before coming to the chamber, Whitley was president of Ameritech Illinois. He also served as the director of the Illinois Department of Revenue under former Gov. Jim Edgar. He was president of the Taxpayers Federation of Illinois for 14 years and got his start in the political sphere as a legislative staffer.
Whitley will leave his post at the chamber in June 2014. “It will be good for the Illinois chamber to have a new leader with a fresh perspective when the next gubernatorial administration starts, whether Gov. Pat Quinn is re-elected or we have a new governor,” Whitley said. The chamber plans to conduct a nationwide search to find his replacement. Whitley said that the one of the biggest challenges that his replacement will face is “the failure of our elected officials to be laser-focused on the question of unemployment.”
He added, “If we had 700,000 more people working, some of the government’s budget problems would begin to take care of themselves.”
Whitley, an often outspoken observer of Illinois politics, said he will miss providing commentary on the action. He said that he does not plan to resign to a life of leisure, and he hopes to find a new job and remain in Illinois after he leaves the chamber. “I don’t play golf, and I don’t own a hammock,” he said.
Wednesday, May 29, 2013
House votes to extend telecommunications law
By Jamey Dunn
The Illinois House voted today to make some tweaks to the state’s Telecommunications Act and extend the law until 2015.
The law is due to sunset this year. It was last rewritten in 2010, and telecommunications leaders say that it was time for some tweaks. “When it was last rewritten, just to put it into perspective... that was exactly when the first tablet, the first iPad, came out. Now look around; look at how many people have iPads and tablets. ... The pace of change is accelerating,” Paul La Schiazza, president of AT&T Illinois, told Illinois Issues earlier this year as negotiations were taking place. “It’s absolutely clear that regulation cannot keep up with how people are using these technologies and how they are communicating, so I think it’s absolutely overdue to address this again given what’s happened in the marketplace.”
AT&T was seeking rollbacks on the amount of video network capacity that they were required to build, as well as in investments in older copper wire infrastructure, which is associated with traditional land-line telephones. Senate Bill 1664 does the first but not the latter. It also would allow Internet and video service providers the same access to condos and apartments as cable providers. The bill contains the same so-called safe harbor protections that guarantee customers access to land line phones. Telecommunications companies would prefer to focus their investments in broadband and infrastructure associated with newer technologies, but sponsor Rep. Kelly Burke, an Evergreen Park Democrat, said “the industries have worked diligently” with consumer protection groups “to make sure consumers continue to be protected.” The bill also has support from unions and business groups.
Scott Musser, AARP Illinois associate state director, said his organization supports the bill because he says it would “make sure people continue to have affordable, reliable access to their land line telephones.”
The measure would also extend legislation regulating 911 emergency services for a year and create a task force that would work with the Illinois Commerce Commission on a plan to properly fund 911 services. Current funding comes from fees paid by telephone customers, but some call centers are in danger of closing. “We need to extend the 911 act. Without it, 911 as we know it goes away,” said Rep. Don Moffitt, a Republican from Gilson. Moffitt, who headed an Emergency Medical Task Force that held hearings throughout the state, said the issue came up at many of the group’s hearings. “We really need to get to the point of having funds available and increase some funding. ...We have some 911 call centers in the state of Illinois that are on the brink of shutting down,” he said. If call centers close, their duties are taken on by the Illinois State Police.
All House members in attendance today voted in favor of the bill, but some said it would not go far enough to loosen regulations on telecommunication companies as they seek to upgrade the state’s technological infrastructure. “This is a start, but beyond today we must begin immediately to go farther if we want to increase business opportunities investment in broadband and wireless. We must go further than what we’ve done today,” said Mundelein Republican Rep. Ed Sullivan Jr. “I want to put those on notice that this is only a beginning, and if you think that this is the end, you have just shut out business in the state of Illinois.”
However, Musser said other states have opted to keep safe-haven requirements in place. “What we know from other states is, in 2012 about 10 other states rejected similar proposals by AT&T, so it is certainly not the case that we’re an outlier here.” He said that right now, cell phone service is too spotty in some areas of the state to expect residents to give up land lines. “Who knows? Maybe in two years cell phone technology is better, and there is access all across the state.” But he said for now, many areas, especially in southern and western Illinois, have inadequate service.
Supporters were optimistic that the measure would help spur economic growth in the state. “The bill removes obstacles for private-sector wired-broadband investment in the state,” said Rep. Arthur Turner, a Chicago Democrat. “It creates jobs to build a network, then it creates jobs through the power of broadband. And it creates jobs in every area of our economy. ... This bill encourages more private sector investment in broadband without a tax credit, without a tax incentive and without taxpayer dollars.” The legislation now goes to the Senate. Since the measure has support from groups on all sides of the issue, it will likely sail to Gov. Pat Quinn’s Desk. Quinn supports the bill.
The Illinois House voted today to make some tweaks to the state’s Telecommunications Act and extend the law until 2015.
The law is due to sunset this year. It was last rewritten in 2010, and telecommunications leaders say that it was time for some tweaks. “When it was last rewritten, just to put it into perspective... that was exactly when the first tablet, the first iPad, came out. Now look around; look at how many people have iPads and tablets. ... The pace of change is accelerating,” Paul La Schiazza, president of AT&T Illinois, told Illinois Issues earlier this year as negotiations were taking place. “It’s absolutely clear that regulation cannot keep up with how people are using these technologies and how they are communicating, so I think it’s absolutely overdue to address this again given what’s happened in the marketplace.”
AT&T was seeking rollbacks on the amount of video network capacity that they were required to build, as well as in investments in older copper wire infrastructure, which is associated with traditional land-line telephones. Senate Bill 1664 does the first but not the latter. It also would allow Internet and video service providers the same access to condos and apartments as cable providers. The bill contains the same so-called safe harbor protections that guarantee customers access to land line phones. Telecommunications companies would prefer to focus their investments in broadband and infrastructure associated with newer technologies, but sponsor Rep. Kelly Burke, an Evergreen Park Democrat, said “the industries have worked diligently” with consumer protection groups “to make sure consumers continue to be protected.” The bill also has support from unions and business groups.
Scott Musser, AARP Illinois associate state director, said his organization supports the bill because he says it would “make sure people continue to have affordable, reliable access to their land line telephones.”
The measure would also extend legislation regulating 911 emergency services for a year and create a task force that would work with the Illinois Commerce Commission on a plan to properly fund 911 services. Current funding comes from fees paid by telephone customers, but some call centers are in danger of closing. “We need to extend the 911 act. Without it, 911 as we know it goes away,” said Rep. Don Moffitt, a Republican from Gilson. Moffitt, who headed an Emergency Medical Task Force that held hearings throughout the state, said the issue came up at many of the group’s hearings. “We really need to get to the point of having funds available and increase some funding. ...We have some 911 call centers in the state of Illinois that are on the brink of shutting down,” he said. If call centers close, their duties are taken on by the Illinois State Police.
All House members in attendance today voted in favor of the bill, but some said it would not go far enough to loosen regulations on telecommunication companies as they seek to upgrade the state’s technological infrastructure. “This is a start, but beyond today we must begin immediately to go farther if we want to increase business opportunities investment in broadband and wireless. We must go further than what we’ve done today,” said Mundelein Republican Rep. Ed Sullivan Jr. “I want to put those on notice that this is only a beginning, and if you think that this is the end, you have just shut out business in the state of Illinois.”
However, Musser said other states have opted to keep safe-haven requirements in place. “What we know from other states is, in 2012 about 10 other states rejected similar proposals by AT&T, so it is certainly not the case that we’re an outlier here.” He said that right now, cell phone service is too spotty in some areas of the state to expect residents to give up land lines. “Who knows? Maybe in two years cell phone technology is better, and there is access all across the state.” But he said for now, many areas, especially in southern and western Illinois, have inadequate service.
Supporters were optimistic that the measure would help spur economic growth in the state. “The bill removes obstacles for private-sector wired-broadband investment in the state,” said Rep. Arthur Turner, a Chicago Democrat. “It creates jobs to build a network, then it creates jobs through the power of broadband. And it creates jobs in every area of our economy. ... This bill encourages more private sector investment in broadband without a tax credit, without a tax incentive and without taxpayer dollars.” The legislation now goes to the Senate. Since the measure has support from groups on all sides of the issue, it will likely sail to Gov. Pat Quinn’s Desk. Quinn supports the bill.
Wednesday, March 06, 2013
Quinn: Close tax loopholes to pay old bills
By Meredith Colias
Gov. Pat Quinn’s proposed state budget would continue to chip away at Illinois' overdue bills, but he hopes lawmakers will agree to eliminate corporate tax breaks and use the proceeds to pay down some of the state’s current backlog.
Quinn said that under his plan, $2 billion in late bills would be paid down during the current fiscal year and the next. His budget projections estimate that the backlog, which is now more than $8 billion, would be $6.8 billion by the end of Fiscal Year 2014. He proposed further measures to make a larger dent in the backlog.
Quinn called on lawmakers to close corporate loopholes, which he estimated would bring the state $455 million per year in revenue, and place the money into a special fund to be used only to pay past obligations. “Suspending corporate loopholes like these until the bills are paid will be good for our vendors and good for our economy,” he said in his budget address. “Why should we give costly, ineffective loopholes to some of the biggest and most profitable corporations on Earth when he have bills to pay?”
Doug Whitley, of the Illinois Chamber of Commerce, opposes Quinn’s proposal. “I find it troubling that on one hand, the governor wants to improve the business climate ... [and then tells business], ‘Oh, and by the way, how about turning around and kicking in [more taxes],’” he said.
Members of the House seemed equally unreceptive. Rep. John Bradley, a Marion Democrat who chairs the House Revenue Committee, said it would be a nonstarter in the chamber. Those working on the budget in the House hope to pay down a portion of the bills in the same gradual way they have over the last two years. “We dedicated about $1.5 billion toward old bills last year, and we’re prepared and anticipate trying to do something similar to that this year. And we have to make that one of our spending priorities. But we’re living within reality.”
Republican leaders said they support making cuts and using the savings to chip away at the backlog over several years. “The only way to do this is to spend less money then we have coming in and begin to pay the bills off,” said Sen. Christine Radogno, a Lemont Republican and Senate minority leader . As far as closing loopholes, House Minority Leader Rep. Tom Cross, an Oswego Republican, said, “That’s not going to be on our table, but other ways to pay it, we’re clearly open to that.”
Rep. Ester Golar, a Chicago Democrat, said the focus should be on those who are waiting on payments from the state. “We have to pay the individuals who have not been paid,” she said. Golar said she plans to introduce a bill calling for the state to borrow money to pay down the backlog. She proposed $4 billion in borrowing at the end of the last legislative session. Quinn has backed such plans in the past but has since moved away from them after they failed to gain traction with lawmakers.
Illinois Comptroller Judy Baar Topinka’s office manages payments to vendors, and documents in quarterly financial reports how the backlog is being paid. “It’s our office’s job to patch. We use baling wire and bubblegum to hold the whole place together, and I’m now looking at the possibility of Silly Putty,” she said. Topinka said the bills needed to be prioritized. “Legally we can’t declare bankruptcy, so we’ve got to make something happen. As long as this goes on, we’re going to keep taking bad credit ratings, the costs [of borrowing] are going to go up. It has to get done now.”
Topinka said another Quinn proposal to cut 5 percent from the budget of the General Assembly and constitutional officers and redirect it to the backlog is not feasible. “We’ve already cut 10 [percent] out of our [office]. We’re at 1997 operations in our office. So it can’t be done. It can’t be done.”
Gov. Pat Quinn’s proposed state budget would continue to chip away at Illinois' overdue bills, but he hopes lawmakers will agree to eliminate corporate tax breaks and use the proceeds to pay down some of the state’s current backlog.
Quinn said that under his plan, $2 billion in late bills would be paid down during the current fiscal year and the next. His budget projections estimate that the backlog, which is now more than $8 billion, would be $6.8 billion by the end of Fiscal Year 2014. He proposed further measures to make a larger dent in the backlog.
Quinn called on lawmakers to close corporate loopholes, which he estimated would bring the state $455 million per year in revenue, and place the money into a special fund to be used only to pay past obligations. “Suspending corporate loopholes like these until the bills are paid will be good for our vendors and good for our economy,” he said in his budget address. “Why should we give costly, ineffective loopholes to some of the biggest and most profitable corporations on Earth when he have bills to pay?”
Doug Whitley, of the Illinois Chamber of Commerce, opposes Quinn’s proposal. “I find it troubling that on one hand, the governor wants to improve the business climate ... [and then tells business], ‘Oh, and by the way, how about turning around and kicking in [more taxes],’” he said.
Members of the House seemed equally unreceptive. Rep. John Bradley, a Marion Democrat who chairs the House Revenue Committee, said it would be a nonstarter in the chamber. Those working on the budget in the House hope to pay down a portion of the bills in the same gradual way they have over the last two years. “We dedicated about $1.5 billion toward old bills last year, and we’re prepared and anticipate trying to do something similar to that this year. And we have to make that one of our spending priorities. But we’re living within reality.”
Republican leaders said they support making cuts and using the savings to chip away at the backlog over several years. “The only way to do this is to spend less money then we have coming in and begin to pay the bills off,” said Sen. Christine Radogno, a Lemont Republican and Senate minority leader . As far as closing loopholes, House Minority Leader Rep. Tom Cross, an Oswego Republican, said, “That’s not going to be on our table, but other ways to pay it, we’re clearly open to that.”
Rep. Ester Golar, a Chicago Democrat, said the focus should be on those who are waiting on payments from the state. “We have to pay the individuals who have not been paid,” she said. Golar said she plans to introduce a bill calling for the state to borrow money to pay down the backlog. She proposed $4 billion in borrowing at the end of the last legislative session. Quinn has backed such plans in the past but has since moved away from them after they failed to gain traction with lawmakers.
Illinois Comptroller Judy Baar Topinka’s office manages payments to vendors, and documents in quarterly financial reports how the backlog is being paid. “It’s our office’s job to patch. We use baling wire and bubblegum to hold the whole place together, and I’m now looking at the possibility of Silly Putty,” she said. Topinka said the bills needed to be prioritized. “Legally we can’t declare bankruptcy, so we’ve got to make something happen. As long as this goes on, we’re going to keep taking bad credit ratings, the costs [of borrowing] are going to go up. It has to get done now.”
Topinka said another Quinn proposal to cut 5 percent from the budget of the General Assembly and constitutional officers and redirect it to the backlog is not feasible. “We’ve already cut 10 [percent] out of our [office]. We’re at 1997 operations in our office. So it can’t be done. It can’t be done.”
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