Illinois law makers have reached a deal on a package of bills designed to prevent financial giant CME Group Inc. from fleeing to another state, Crain's ChicagoBusiness reported Thursday afternoon.
CME met with Indianapolis officials a week ago to discuss a possible move to Indianapolis, a relocation that could bring up to 2,000 high-paying jobs to the city. Carmel also is a likely suitor for CME.
CME Group, which operates the Chicago Mercantile Exchange, the Chicago Board of Trade, NYMEX Holdings, and a majority of the Dow Jones indexes, has 2,570 employees worldwide, most of them in Chicago. In 2010, it reported more than $3 billion in revenue and more than $950 million in earnings.
According to Crain's, lawmakers on both sides of the aisle in Illinois will vote next week on a pact that will give tax incentives to CME and retail giant Sears Holding Corp. The Illinois House is scheduled to vote Monday and the Senate on Tuesday.
Late last month, the Illinois House rejected a $250 million package of tax breaks intended to keep businesses like CME and Sears from leaving the state.
Both companies have complained about recent steep increases in Illinois' corporate tax rate.
Illinois House negotiators said Thursday that they would split the package of tax-relief measures into two parts and vote on them separately, a tactic they hope will improve its chances of getting approved.
Minority Leader Tom Cross of Oswego, the top House Republican, agreed to help pass the part that offers tax relief to businesses, including Hoffman Estates-based Sears and for CME, an aide said. He is making no such promise for the other part, which would lower tax bills for families and the working poor.
The tax breaks for business would cost state government about $150 million next year and $218 million the next year, according to Cross’ office.
A tax credit for Sears would be renewed for another decade, saving the company $15 million a year. The same economic-development credit would be granted to Champion Laboratories Inc., a southern Illinois business that is moving to the Chicago suburbs, costing the state $350,000 a year.
Sears is “encouraged that [lawmakers] are returning to Springfield to consider a package that will help us remain an Illinois company,” Sears spokesman Chris Brathwaite said. “We sincerely appreciate the efforts of many members of the General Assembly over the last several months on our behalf.”
The relief for individual taxpayers would come in the form of raising the personal exemption on income taxes and then having it grow with inflation each year. It would also expand the earned-income tax credit, which lets poor families keep more of what they earn. The cost of those changes has previously been pegged at roughly $110 million a year.
The House overwhelmingly rejected the package as a whole last week. The tax credit for poor families was a major sticking point.
Some lawmakers said the state can’t afford to lose money by expanding the credit. They want to focus only on breaks for business, which they say will help the economy by creating jobs. Other lawmakers, however, insisted on even more aid to the poor, arguing that they’re struggling just as much as businesses.
Voting on the tax package in two pieces offers a couple of possible advantages.
Lawmakers may be less willing to vote “no” when facing a specific question: Do you support this particular tax incentive for businesses? Should poor families get a break on their tax bill?
“We have a better chance of passing it this way,” said Rep. John Bradley of Marion, the lead negotiator for House Democrats. “If somebody was reluctant to vote for one piece or another, they would have the option of not voting on one of the pieces.”
The other advantage is that one part could pass even if the other fails. It’s not all-or-nothing. The risk, however, is that neither will pass when the House convenes Monday.
The Senate already has approved a version of entire package. A spokesman said President John Cullerton has no objection to the idea of voting again on separate pieces when it meets Tuesday.