SPRINGFIELD, Ill. (CBS) — The CME Group and Sears could be closer to deciding whether they will stay in Illinois, after two key tax votes in Springfield Monday.
As CBS 2’s Susanna Song reports, the Illinois House of Representatives broke up the tax incentives package that failed earlier in the month into two bills – one addressing corporate tax breaks for the two companies, research and development credits and sunset extensions; and the other dealing with tax relief for low-income families.
The issue of corporate tax breaks dates back to January, when the Democrat-dominated General Assembly approved a $7 billion income tax increase.
Now, 11 months later, lawmakers are feeling the pressure as the Chicago-based CME Group – which operates the Chicago Mercantile Exchange and Chicago Board of Trade – and Hoffman Estates-based Sears Holdings Corp., the parent company of Sears and K-Mart – threaten to leave the state.
The only way they’ll stay, they claim, is if the state cuts them a deal.
Last week, Mayor Rahm Emanuel urged lawmakers to approve the bills and keep the companies in the state.
House Minority Leader Tom Cross (R-Oswego) agreed to help pass the deal in the House, but says the state cannot afford to keep crafting these deals.
“People are going to say ‘look, once again, the state of Illinois provided a credit to somebody, we need to go to the state of Illinois.’ We can’t keep doing that,” he says. “Because of that, we’re going to have to address issues like whether our tax rate is too high.”
Cross says lawmakers will figure out how to pay for the $250 million package later.
The new package is similar to the ill-fated deal that received just eight votes in the House last week. The estate tax exemption has been increased from $2 million to $3.5 million as of Jan 1, 2012, and to $4 million on Jan. 1, 2013.
Cross says the new incentives package for corporations will likely pass the House. State Rep. John Bradley (D-Marion), the head Democrat in the talks, couldn’t speculate on whether the House will pass tax relief for low-income families.
Meanwhile, Indianapolis and Columbus, Ohio, are two cities that have tried to lure the two companies to move to their cities, offering big financial incentives. The State of Ohio is offering $400 million to lure Sears’ corporate headquarters.
Gov. Pat Quinn said last week that the $15 million over the next 10 years that Illinois is offering to keep Sears is “more than adequate,” and there will not be a bidding war with Ohio.