The Illinois state legislature this week is debating several versions of a tax break package aimed at incentivizing corporations to remain in Illinois. Community groups have responded with strong opposition to aspects of the current plan.
The Illinois state legislature this week is debating several versions of a tax break package aimed at incentivizing corporations to remain in Illinois. Community groups have responded with strong opposition to aspects of the current plan. According to various estimates, the package would cost taxpayers between $600 million and $800 million annually over the coming years.
The proposed legislation is essentially an omnibus package comprised of several different and unrelated tax break initiatives. At the center of discussions is an initiative to placate two major financial exchange corporations, CME Group and Chicago Board Options Exchange, who have repeatedly threatened to leave the Chicago area. The current tax break package incorporates language from a previous bill proposed last month, which would have cut in half the amount of taxes paid by the two exchanges. That bill stalled in the legislature, but now it has been repackaged into a far more expansive corporate tax break proposal.
“They’re taking the money out of our pockets and giving it to highly-profitable corporations,” said David Hatch.
Hatch is a community organizer and spokesperson for the coalition group Make Wall Street Pay Illinois, which organized protests and marched on the mayor’s office last month to oppose the previous CME and CBOE tax break bill. He thinks the new legislation will prompt even more opposition. “Read the tea leaves. Read the times. People are tired of subsidizing the rich,” he said, in reference to the Occupy movement that has spread across the country.
Speaking before an Illinois House committee on Tuesday evening, CME chairman Terry Duffy reiterated that unless his corporation receives a significant reduction in its taxes, it may have no choice but to accept an offer from another state. CME Group owns both the Chicago Mercantile Exchange and the Chicago Board of Trade. Last year, CME received $15 million in TIF development funds from the City of Chicago to renovate parts of the Board of Trade building.
The new omnibus package would also extend special tax breaks for Sears Holding Corporation, whose corporate campus in Hoffman Estates township was first developed using $250 million of local and state money back in 1989. An amendment to a state Senate bill last month would have extended Sears’ tax breaks for another 15 years. That amendment was eventually removed, largely in the face of opposition from members of local school District 300, who banded together to demand that a greater percentage of local property taxes be diverted to public schools. Now, the Sears tax break extension has turned up again, this time as a packaged deal with breaks for CME and CBOE. The new tax break package would allocate slightly more revenue to District 300 schools. But the current proposals do not go nearly far enough, says Allison Strupeck, a spokesperson for the District. She is leading a group of community members who are in Springfield this week to lobby legislators for a better deal. Members of the district are “extremely angry,” says Strupeck, because they feel that “our children’s future” should be the priority. “As the schools go, so goes the community,” she said.
Two similar versions of the tax break package were proposed in Springfield this week, including a second “compromise” proposal that community leaders argue that they had no input in. State Senate President John Cullerton (D-Chicago) hopes to get the bill passed this legislative session, which ends Thursday.
Hatch thinks state legislators are trying to pass the omnibus legislation quickly before community organizers can drum up even more opposition. “They’re sneaking this through,” said Hatch. “They’re hurrying it. They’re trying to do it in the dark. They’re hoping there’s no consequences for them to do this. And we’re hoping that’s not the case.”
In an attempt to placate community organizations, the current tax break proposals also include items directed at helping working families. Specifically, the package would raise the earned income tax credit for low- and middle-class earners from 5 percent to 15 percent. But the legislation would also include additional tax relief for businesses, including an increase in the estate tax deduction, and a sharp drop in the cost of filing fees for limited liability corporations. Budget experts have expressed skepticism about how the tax breaks will be funded. And one of the bills’ sponsors, Majority Leader Barbara Flynn Currie (D-Chicago), told the Chicago Tribune that funding was complicated by the fact there “are a lot of moving parts.”
Hatch thinks the omnibus package’s supporters are trying to use the earned income tax credit as a way to buy off the opposition. “We’ve talked to legislatures and they say, ‘Oh, that’s okay, we’re doing something for poor people.’ No, it’s not okay. We need to do something for poor people, but not for millionaires and billionaires. It’s not a trade-off,” said Hatch. “Our tax money is not a trade-off.”
The growing protests against corporate tax break legislation in Springfield are clearly taking place in the context of a larger issue: a national movement against what is perceived to be the problem of corporate greed plaguing America. For Hatch, the issues facing Illinois are one piece of this larger problem: “This is why everyone is out on the streets. People are outraged. Ordinary people are just disgusted with this.”
Yet for many, it is precisely the local aspects of the proposed legislation that have hit home, in a way that abstract notions of the “99 percent” might not. “We’re not opposed to tax breaks within reason,” says Strupeck. “We’re a district with a relatively high amount of poverty... All we’re asking is that a more fair and reasonable amount of the tax money goes into our schools.”