Illinois House rejects business tax incentives

[November 30, 2011]  SPRINGFIELD (AP) -- Efforts to grant tax breaks to Illinois businesses, including some major companies that are threatening to leave the state, suffered a serious setback Tuesday as the Illinois House rejected the proposal by an overwhelming margin.

Only eight people voted for the $250 million package, while 99 opposed it.

The lopsided vote may not reflect the proposal's actual level of support. Lawmakers who are willing to back a contentious measure sometimes wind up voting "no" once it becomes clear the bill won't pass. It's still possible another version could be considered and would get more support, although reaching the 60 votes it needs would be a major task.

The House vote came shortly after the Senate approved the tax breaks by a 36-18 vote.

The package would provide about $85 million in tax relief for financial companies CME Group Inc. and CBOE Holdings Inc., both of which have threatened to leave Illinois unless they get a break. Sears Holdings Corp., which also says it might leave, would get a $15 million break each year for the next decade.

It also includes other breaks that apply to Illinois businesses in general, including a research-and-development credit, and changes in the way losses can be applied to tax bills.

Families would get about $110 million in tax relief. The standard personal exemption on income taxes, now $2,000, would be bumped to $2,050 and then increase with the rate of inflation in future years. The state version of the earned-income tax credit for poor families would rise to 10 percent of the federal credit, up from 5 percent.

Some House members wanted to see bigger tax credits for the poor. "Everybody has gotten everything that they wanted except the EITC," said Rep. Will Davis, D-Homewood.

The measure's sponsor urged lawmakers to accept the package, even if it wasn't ideal. Rejecting it could deny poor families any relief at all, warned Rep. John Bradley, D- Marion.

"Why can't low-income individuals still get something out of this?" Bradley said.

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The bill is HB1883.

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Online: http://www.ilga.gov/

[Associated Press; By DEANNA BELLANDI]

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