Even with an extension that was technically a Special Session day, the 97th General Assembly of the Illinois state legislature had meager accomplishments in the Veto Session that concluded this week. The Illinois General Assembly had a lot on its plate when it ended the Veto Session just before Veterans Day. After returning and adjourning this Tuesday, the plate was still very full.
The Veto Session ended with the prospects of finally adding a casino in Chicago seeming bleak. That came true on Tuesday with no action taken on the measure.
A legislative package that was expected pass both chambers to provide tax incentives for Chicago’s CME Group and Sears Holdings, among others, did not get addressed either. As it has shown historically, the General Assembly’s geographic and political partisan bickering muddled the bill up to the point that even the sponsors were unenthused. Although it passed in the Senate 36 to 18, it died in the House by a vote of 8 for and 99 against.
Ideally the General Assembly and Governor Pat Quinn would address this issue during the spring Budget Session. But, the politicos of the Illinois Statehouse may have misplayed hits hand. Sears has supposedly received an incentive package to relocate to Ohio that quadruples the proposed Illinois $100 million incentive package. Although Sears Holdings employs 6.100 in Hoffman Estates, it has some Land of Lincoln detractors because the company has received state and local subsidies that have totaled $240 million since 1992 when it was essentially “exhibit A” of the economic development “smokestack chasing” era during former Governor Jim Thompson’s administration. The needy Illinois corporate icon may indeed leave because the Ohio offer may be too good to pass up. But, it could wait to see if other states ante up. It is doubtful that Illinois could pull together an incentive package anywhere near that level.
The big blow could come from the CME Group. Illinois’ largest income tax payer has essentially operated in Chicago for 163and is a big reason why Illinois is a global financial center. Illinois Statehouse talks with CME Group started when the Illinois corporate income tax was raised from 4.8 percent to 7.8 percent this year. Although the State cannot really afford to forgo the $100 million in income tax revenue proposed in the CME Group package, can it really afford to lose the taxes and economic impact associated with the Chicago Mercantile Exchange and the Chicago Board of Trade? The CME Group employs 2,500 and is estimated to pay 6 percent of the total state income tax collected in the state. Even if CME Group moves part of its operations to another state, it would signal that Illinois is even more primed for corporate raiding by other states than ever.
In the other big issue realm being dealt with, the General Assembly did address pension reform – sort of. Instead of sweeping reform or challenges to the legality of changing current state employee’s benefits or creating legislation preventing raiding of pension funds for other purposes, the General Assembly passed legislation targeting people that double-dip into state government and union pension funds. This is comparable to putting a bandage on a severed torso. At some point it will have to be addressed, but it wasn’t on Tuesday.
Finally, the General Assembly did agree with Governor Quinn to shift some money around to prevent the closure of some prison and mental health facilities. That’s really it. All of the pre-Veto Session hype ended with the most significant change resulting in some money being shifted around with the notable exception of Smart Grid legislation passing. That is pretty much a public policy thud because the Smart Grid legislation essentially costs the Illinois Statehouse nothing.
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