Political Rewind: Tax Deal Aims at Preventing Companies From Leaving the State

Editor's Note: This article was created by aggregating news articles from Illinois Statehouse News that were written by various Illinois Statehouse News reporters.

Saving jobs focus of brewing Illinois tax deal

Illinois lawmakers have the weekend to review the framework of a tax incentive package that tries to balance help for a handful of big companies in the state with broad relief for small and family businesses.

Gov. Pat Quinn and the four legislative leaders Friday agreed on a deal, which lawmakers say they hope will keep the CME Group and Sears from leaving the state. 

Details of the tax incentive package were first reported by Rich Miller on his nonpartisan political blog Capitol Fax, and include a proposal to "decouple Illinois" from the federal bonus depreciation law. That law allows Illinois companies to write off 100 percent of the cost of equipment in one year, as opposed to over a number of years, not yet determined.

The 100 percent write-off lowers the taxable dollars from a company and, in turn, lowers the amount that Illinois can collect. 

Other key factors of the framework now heading to lawmakers include:

• A reinstatement of the net operating loss provision, which would allow companies to receive a tax deduction for money lost;
• A five-year extension for the research and development tax credit. Companies, ranging from pharmaceutical makers to equipment manufacturers can apply for the credit as they work to bring new products to the market;
• An increase in the estate tax deduction from $2 million to $5 million over two years. Family farms and other family-run businesses would benefit from the increase, as they pass their businesses to the next generation; and
• A $650 reduction in filing fees to form limited liability companies, from $750 to $100. 

Audit recommends less state-owned vehicles

Illinois state employees aren’t driving state-owned passenger vehicles enough.

“It doesn’t make sense to have as many vehicles as we do and to give so many people the free use of vehicles,” state Rep. Jack Franks, D-Woodstock, said. “The state needs to tighten its belt significantly and sell these underutilized vehicles.” 

Franks was one of three state representatives who pushed for the report released Thursday by the Illinois Auditor General’s Office on the usage of the state’s fleet of more than 16,000 passenger vehicles for fiscal 2009 and 2010. 

Factoring in the cost of insuring, storing and maintaining the vehicles, state workers must drive the passenger vehicles a minimum of 7,000 to 12,000 miles annually, depending on the vehicle, for the state to save money. 

Otherwise, the report said reimbursing state employees at 51-cents per mile for using their personal vehicles is cheaper.  

The state paid $121 million in fiscal 2010 on buying, maintaining and fueling vehicles. 

Quinn’s tough talk pushing lawmakers away

Gov. Pat Quinn made it clear Tuesday that he will not negotiate with the Legislature over gambling expansion.

“I don’t think the word negotiate is appropriate,” Quinn said at a Chicago news conference. “I have laid out a framework. They know what it is. It’s crystal clear. If the General Assembly wants to take that guideline and use it to guide their work, so be it.”

The General Assembly has approved a plan to add five new casinos and slot machines at horse racing tracks statewide.

Quinn will accept the five casinos, but not the slot machine expansion.

Quinn’s hard line on gambling is the latest example of his take it or leave it style, and legislators say that style soon could make the governor irrelevant.

Even with total Democrats in control of the statehouse, Quinn, a Democrat himself, has had a difficult time working with legislators. State Rep. Lou Lang, D-Skokie, points to the governor’s preference for bombastic public statements over one-on-one conversations with lawmakers as an example.

“There was a thought that once (Quinn) became governor … , he would grab on to the job and the gravitas that comes with it,” said Lang. “He’s tried in his way to do that, but in some issues, it’s not working too well.”

Quinn’s $376-million budget veto likely to be spent elsewhere

Gov. Pat Quinn used his veto pen in an attempt to cut $376 million from the $33.2 billion budget the Legislature sent him this spring, but lawmakers and Quinn already might have found a new way to spend the money. 

The Legislature didn’t address Quinn’s actions during the first week of its fall veto session. It now has just three scheduled session days to decide whether to try and restore the reductions, or do nothing and let them become reality.

Instead of reversing Quinn’s actions, the idea that seems to be solidifying among lawmakers involves taking a good portion of what Quinn vetoed — between $230 million and $250 million — to fund the seven facilities Quinn has targeted for closure because a lack of money, according to House Republican Leader Tom Cross, R-Oswego.

“That would keep their operations going and would keep the closures from happening,” Cross said at a news conference last week.

Time critical, questions linger for Illinois health insurance exchange

Illinois lawmakers are moving forward with legislation to create an online health insurance exchange despite not knowing who will pay its nearly $89 million price tag. 

“We want people to be able to log on, type in their information, be told, ‘This is what you qualify for,’ and then be able to buy it,” said state Rep. Frank Mautino, D-Spring Valley.

Mautino introduced legislation last week that would create the online marketplace with a governing board and framework to pay for the exchange.

Each state must have a fully operational health insurance exchange by 2014, according to the federalPatient Protection and Affordable Care Act. However, the law requires Illinois lawmakers to create an exchange by June 2012, so the state can test the exchange model by 2013.

If Illinois does not meet the 2012 deadline, the federal government will impose its own insurance exchange on the state.

Soda tax proposal bubbles up again

If every man, woman and child in Illinois were to drink 18 ounces of sugary beverages each day, state coffers could get an additional $1.4 billion. 

A new study by the Cook County Department of Public Health said Illinoisans are set to drink 6.6 billion, 12-ounce cans of soda, sports drinks and other sugary beverages in 2011.

That could mean big bucks for the state if were to enact a 2-cents per ounce tax. The tax would be levied on regular soda, diet soda and other sugar-sweetened drinks.

A standard 12-ounce can of soda would cost 24 cents more under the proposed tax. 

The study also suggested that the state and private employers would save at least $200 million in health-care costs by imposing the tax. Elissa Bassler, director of the Illinois Public Health Institute, or IPHI, said any revenue generated by the tax should be put into obesity prevention and reduction programs, instead of being absorbed in the state's "budgetary black hole."