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SPRINGFIELD, Ill. (AP) — Illinois lawmakers went home Tuesday night after hitting an impasse over a $250 million package of tax relief designed to keep several high-profile companies from leaving the state.
The Legislature could convene again when negotiators come up with a new version of the package, but there was no hint of whether that would take days or weeks or even longer. Senate President John Cullerton, D-Chicago, suggested action could be delayed until spring without any problem.
Coming up with a more palatable plan could be difficult. While the Senate approved the tax package Tuesday, it failed in the House on a stunning 8-99 vote.
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Before adjourning, both the House and Senate approved a plan to tinker with the budget so that Gov. Pat Quinn would cancel plans to close seven state facilities and lay off about 1,900 employees. The legislation, which Quinn supports, shifts money in the budget but doesn’t increase overall spending.
They also sent the governor legislation meant to curtail abuses of public pension systems. It would bar employees from earning pension credit while on leave working for unions, and also prohibit employees from “double-dipping” by getting credit from union pension systems and public systems at the same time.
The measure also attempts to cancel pension benefits for two Illinois Federation of Teachers lobbyists who qualified for teachers’ pensions by spending just a single day in the classroom as substitutes. But that could run into constitutional roadblocks.
The tax package would provide about $85 million in tax relief for financial companies CME Group Inc. and CBOE Holding Corp., both of which have threatened to leave Illinois unless they get a break. Sears Holdings Corp., which also says it might leave, would get a $15 million break each year for the next decade.
It also includes other breaks that apply to Illinois businesses in general, including a research-and-development credit and changes in the way losses can be applied to tax bills.
Families would get about $110 million in tax relief in the Senate version, which passed 36-18. The standard personal exemption on income taxes, now $2,000, would be bumped to $2,050 and then increase with the rate of inflation in future years. The state version of the earned-income tax credit for poor families would rise to 10 percent of the federal credit, up from 5 percent.
Some House members wanted to see bigger tax credits for the poor. “Everybody has gotten everything that they wanted except the EITC,” said Rep. Will Davis, D-Homewood.
The measure’s sponsor urged lawmakers to accept the package, even if it wasn’t ideal. Rejecting it could deny poor families any relief at all, warned Rep. John Bradley, D- Marion.
“Why can’t low-income individuals still get something out of this?” Bradley said.
The lopsided House vote may not reflect the proposal’s actual level of support. Lawmakers who are willing to back a contentious measure sometimes wind up voting “no” once it becomes clear the bill won’t pass.
The Senate president said the tax proposal is still alive, despite the House vote. It has made it halfway through the Legislature, Cullerton said, so backers should concentrate on building support in the House.
He noted the legislation could be approved early next year because the tax provisions don’t kick in until July, although CME officials have been pushing for a decision this fall.
“Maybe it’s going to take some time to reflect on it and pass it,” Cullerton said.
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