Legislative leaders frown on some of Pritzker’s proposed ‘corporate loophole’ closing

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In separate remote appearances as part of “Virtual Business Day” in Springfield—an attendee sent me a link to their presentations—House Speaker Emanuel “Chris” Welch seemed more willing to buck Pritzker’s plan than Senate President Don Harmon. But even Harmon suggested he wasn’t entirely comfortable with it.

Welch told the conference, sponsored by the Illinois Manufacturers’ Association and the Illinois Retail Merchants Association, that given that the state and its economy have only begun to recover from COVID-19, “It’s way too premature to talk about additional taxes on our businesses. We’re talking about creating an environment that’s going to create jobs.”

That comment came in a response to a question about replenishing the state’s unemployment trust fund, which is usually filled by taxes on employers. But when asked specifically about Pritzker’s proposal, Welch made it clear he is not yet aboard.

“(The governor’s) speech in February was a proposal….the beginning of the budget process,” Welch said. “We still have a long way to go…some of the things he mentioned we agree with. Some we don’t. Some we don’t agree with strongly.”

Harmon, who like Welch was interviewed earlier by NPR Illinois reporter Hannah Meisel with the interview shown today to attendees, was more restrained in his comments.

Business does have concerns and needs tax stability, but also depends on government programs that have to be funded, Harmon said. “I would hope that business would be eager to come to the Capitol to explain all the benefits that these (tax) expenditures generate.”

He continued, “If these success stories don’t exist, then I think that we probably should look at these expenditures to see if they’re worth changing.”

Springfield insiders say the most likely to pass on Pritzker’s list is excluding Illinois from national changes in tax law during the Trump administration that permitted accelerated depreciation, and changes in how international dividends are handled.

Less likely is capping the discount retailers get for collecting states sales taxes. More uncertain is another proposed change that would force companies that suffered losses amid the pandemic to claim them in future years, rather than right now.

Those four items are worth an estimated $73 million to $300 million a year each.

In a phone interview, IMA President Mark Denzler said the items on Pritzker’s list aren’t “loopholes” but “incentives that were passed by the General Assembly for a specific reason: to incent job creation.”

Industry groups will continue to make their case as suggested by Harmon, but given the fact that Illinois taxpayers in November rejected Pritzker’s proposed graduated income tax, and that the state is getting $7.5 billion in additional federal COVID relief help, “I don’t hear a lot of enthusiasm for raising taxes now," Denzler said.

Welch said it’s possible some of that $7.5 billion could go to shore up the unemployment fund. Harmon said he’d like additional federal help for that.

Both leaders said now is not the time to revive talk of a graduated income tax but left open that possibility in the future as the state wrestles with a continuing structural budget deficit of about $3 billion a year, mostly for rising pension liability.

via Crain’s Chicago Business

May 5, 2021 at 03:23PM

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