Can you imagine Chicago—once known as the hog butcher of the world-- without the CME Group or Sears? Both landmarks were investigating options to relocate elsewhere, as a result of the state’s recent corporate tax increases. Illinois lawmakers debated the prospects of giving the businesses certain tax breaks.
Back in September, reports surfaced that Indiana was offering the CME Group $150 million in tax incentives to relocate the company’s headquarters to Indiana. Last week, Indianapolis mayor Greg Ballard was in Chicago to meet with officials from the CME Group. Numerous U.S. cities spent the fall courting Sears as well.
While all state politics can be colorful and questionable, Illinois has a long history of such patterns. For several weeks, the fate of the CME Group and Sears had been hotly debated, negotiated, stalled and renegotiated. One week ago, the Illinois House overwhelmingly rejected a tax break bill that would, in theory, would have kept such large companies in the state. However, it now appears there’s been a change of heart.
On Thursday, Illinois’ House Republican Leader Tom Cross reported that an agreement was reached on a tax break package to keep both Sears and CME Group in Illinois. The official vote has yet to come.
According to Crain’s Chicago Business the agreement offers $100 million in tax breaks to the two entities.
A spokesperson for Cross said, the package is divided into two bills-- one addresses changes to corporate taxes, including increasing the estate deduction from $3.5 million to $4 million by 2013. The other is meant to help low-income families through an increase to the state earned income tax credit.
“We have come to an agreement on a jobs package that will give some relief to a broad base of businesses in our state," Cross said in an emailed statement. "This package will allow businesses to plan on longer term research and development and the ability to carry their losses forward in a tough economy. It will also lessen the tax burden on our family farmers and small businesses. We must continue this broad based approach to retaining and growing jobs in Illinois.”
Of course like nearly all U.S. states, and of course the federal government, Illinois is dealing with severe budget problems and can use all the dollars it can find.
Illinois lawmakers are scheduled to reconvene in Springfield the week of Dec. 12 for a special session to address the tax break package. The House will meet on Monday, and the Senate will follow on Tuesday. The Senate approved a tax relief bill in November,, which never made it through the House.