Senate President John Cullerton said Thursday that progress is being made toward a broad deal to pair tax breaks for the city’s financial exchanges with relief for smaller businesses and individual taxpayers.
Legislative leaders, who meet privately with Gov. Pat Quinn Thursday, caution that they have to go back to rank-and-file lawmakers and see what can get enough votes to pass next week when the General Assembly is back in session for what’s supposed to be the final time this year.
“The whole goal here of course is to retain jobs in Illinois, make it more business friendly as well as provide some tax relief for individuals,” said Cullerton, D-Chicago, following the closed-door meeting.
The negotiations continue after a Cullerton-backed plan to change the way the exchanges are taxed stalled at the Capitol last week.
CME Group, which operates the Chicago Mercantile Exchange and the Chicago Board of Trade, and CBOE Holdings, parent of the Chicago Board Options Exchange, have threatened to set up shop elsewhere following this year’s major income-tax increase.
The companies argue that they are unfairly taxed because Illinois taxes are applied to all transactions, even those that originate out of state.
Changing the tax structure could save the companies more than $100 million a year, but Republicans insist the measure should be broader to help out small- and medium-sized businesses. Quinn is concerned about the loss of revenue for the state, and says everyday taxpayers also should get a break.
To that end, legislative leaders are considering a variety of suggestions, including increasing the earned income tax credit for low- and middle-income families, expanding the personal income tax exemption and re-establishing the research and development tax credit for businesses that expired in January. Those programs would be paid for by closing various corporate tax loopholes, an idea that is likely to see some resistance among lawmakers.
Senate Republican Leader Christine Radogno of Lemont said the talks are a direct result of this year’s income tax increase, which has resulted in a “poisonous businesses climate” in Illinois.
Cullerton dismissed that argument. Earlier this week, Quinn defended the tax hike, saying it was needed to prevent massive cuts to education and other areas.
In other developments, Cullerton said lawmakers haven’t given up on a major gambling expansion and he expects a vote on the matter next week. The proposal faces an uncertain future after Quinn threatened to veto the package, which includes a casino for Chicago, unless lawmakers follow a framework he laid out several weeks ago.
Quinn’s outline would not include slots at racetracks – a deal breaker for many lawmakers. Cullerton said negotiations are ongoing, and sponsors have agreed to a number of regulatory changes Quinn wanted.
“I can’t say that we’ve narrowed the differences to an agreement, but we’ve made a lot of progress,” Cullerton said.